Bitcoin Exchange

 

What is a Bitcoin exchange?

Bitcoin exchanges are places where you can trade Bitcoins for other kinds of currency. Typically, you make a deposit to your account, and then you trade through the system. Your account is credited with the currency you traded for.

 

How are prices calculated?

Prices are determined by trends, in a sense. Supply and demand is a huge factor in the pricing of Bitcoin. When mining becomes more difficult, there’s more scarcity. When there’s more scarcity, there’s more demand. More demand means a higher price. Remember that while speculation is possible, it isn’t always correct.

 

How can I stay safe when using exchanges?

There are a few things you should know before using exchanges. First and foremost, don’t ever rely on exchanges as a place to store large amounts of money. Second, you should always know who the owner of an exchange is, and be absolutely sure that you can get assistance or refunds if something happens to your money. Lastly, try to find reviews and a history of the site. If anything looks suspect, try researching a different exchange to use.

 

Can exchanges scam people??

This has happened before, but it’s rare because there are many different exchanges and for an exchange to manipulate prices there would have to be quite a few scammers in collusion and possessing a great deal of power. If an influx of people use an exchange and are all new to Bitcoin, they might not realize if the exchange tinkers with the price. To be safe, you should always take a look at exchange rates from different resources and compare, especially if this is your first time on an exchange. This thread from the BitcoinTalk forum is a good resource for researching what Bitcoin-related services have been subject to scams.

 

Buying/Selling Bitcoins offline

There are various online resources for finding people in your local area who are buying and selling Bitcoins. You can establish a meet-up and trade with the people you meet online. Bitcoin ATMs are also coming out, but are only in a select few locations and are still relatively new (and so unforeseen accidents could still happen with this young technology).

 

So where can I find all these exchanges and resources?

The Bitcoin Wiki is an excellent resource for getting started with exchanges. You can check more info about exchanges here.