Economic education on bitcoins – part III


There are a number of these internet-based wallets to choose from and they have different features, costs and reputation for review and consideration. Do you need a trading tool? Do you need currency exchange services? Do you need a “cold” shelter? Do you want multi-factor authentication? All you need is someone who offers you this.

After creating an account and wallet, how to get bitcoin? There are two obvious answers. First, if you already had money in one currency and you want to convert it to another currency, you can exchange it. Second, just as you sell goods or labor for your local currency, you can sell goods or labor for bitcoin. I explored both of these options.

Bitcoin exchanges operate similarly to traditional currency exchanges. There are competing firms that have different appetites for different currencies and they adjust their exchange rates accordingly. There are some cash register windows that you can visit in person, and there are even automated ones such as ATMs that accept currency, credit cards or bitcoin, and issue currency or bitcoin. I prefer to make my transactions online, so I researched various online exchanges. On each of them, to buy bitcoin, you have to create and top up an account and then place an order to buy or sell bitcoin – and there is a spread like securities. In this respect it is similar to a traditional brokerage account, but without SIPC insurance. If the exchange is hacked, the shutters themselves are either otherwise compromised, your deposits may be temporarily unavailable or lost forever. This has already happened to several bitcoin exchanges that have reinforced my previous mental thought about reassessing my risks when my balances become significant.

Next, I updated my business sites to show that we accept bitcoin. I figured I would be able to avoid paying and distributing requests-requests if I could just get someone to pay for my goods or services at a spot price. A few years later, without earning a single bitcoin, I returned to my exchange research.

If you’re unfamiliar with Level II stock quotes or “depth” charts, these are basically two lists. One list calculates and ranks by price all unpaid “buy” orders for a certain capital, showing the number of prices demanded at different levels; the rest similarly occupy sales orders. When someone places an “market” order to buy ABC, outstanding “sell” orders of ABC match in price. So if someone sells 100 shares of ABC for $ 30 and someone sells 500 shares for $ 31, all 100 of the $ 30 will be consumed before one share of $ 31 is sold on that exchange. Bitcoin exchanges work the same way.