Bitcoin is the first, most popular and most valuable decentralised digital currency, designed for peer-to-peer transactions without the mediation of traditional financial institutions.
Over the past 10 years, bitcoin has forced governments, financial institutions and businesses to rethink the idea of money, especially in the digital economy. Many business owners are now looking to the growing popularity of cryptocurrencies to understand its potential impact on their cash flow in the short to medium term. If you're interested in getting started with cryptocurrency, this article is a comprehensive guide on how to buy and sell bitcoins in the UK in 2020.
How to buy and sell bitcoins in the UK
Cryptocurrency exchanges are popular, and they do a commendable job of promoting the idea that cryptocurrency is the future of money. Cryptocurrency exchanges typically come as centralised, peer-to-peer or decentralised exchanges.
Centralised https://exnessgroup.org/ exchanges allow people to include their buy or sell orders in the order book, and the exchange's matching mechanism aggregates the transactions for execution. For example, if you want to buy 1 BTC for £10,000, you will place a buy order and the matching mechanism will look for another order to sell 1 BTC for £10,000 to facilitate your trade. If you buy cryptocurrency on an exchange, it is in your interest to withdraw the tokens into a wallet you own and control to protect them from theft by hacking .
Peer-to-peer exchanges allow people to post offers to buy and sell the amount of cryptocurrency they want to buy/sell and the price at which they are willing to complete the transaction. Other users on the exchange respond to the offers, negotiate where applicable, agree on a method of escrow and payment time before proceeding to independently complete the transaction.
Secure storage of cryptocurrencies requires an understanding of technical concepts such as private keys, public keys, hot and cold storage among other concepts. The long list of crypto hacks and the fact that stolen cryptocurrencies are virtually unrecoverable are reasons why storage services are so important.
Many small business owners who are starting to incorporate cryptocurrencies into their operations probably do not have the technical knowledge or experience regarding best practices for storing their bitcoins or protecting their wallets. Consequently, many small business owners tend to avoid exploring cryptocurrency options because they don't want to risk losing their funds through an exchange hack.
Fortunately, cryptocurrency storage companies use the best security measures to store and protect the cryptocurrencies in their care. In addition, cryptocurrency storage services are usually insured to ensure that users receive some respite from the unlikely consequences of hacking or theft.
Crypto brokers
If you're buying or selling large volumes of bitcoins or any other cryptocurrency, you'll probably be better off placing a trade through a broker rather than making a transaction on a cryptocurrency exchange. Crypto brokers are part of a dealer network that brings together people who own large pools of cryptocurrency in over-the-counter trading.
Buying and selling cryptocurrencies through a brokerage ensures that trading is done in a single transaction to allow for faster settlement. Moreover, using a brokerage reduces the risk that you will inadvertently move the market through a whale of a transaction.
Coinbase
Coinbase is the world's most popular bitcoin exchange, as it provides a platform for more than 30 million users in more than 30 countries to buy and sell bitcoins. Founded in 2012, it has raised £168 million from the world's leading investors and its users have sold more than £116 billion worth of cryptocurrencies.
Another factor that makes Coinbase the most popular, apart from its age, is that it allows users to buy bitcoins via debit cards , bank transfers, SEPA transfers and other payment methods. It also boasts high liquidity and purchase limits because of its large user base and huge transaction volumes. However, the main disadvantage of Coinbase is that it can take up to 5 days to settle if you buy bitcoins using debit cards.
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