We all hear about the cryptocurrencies every now and then. Bitcoin is one of the most popular cryptocurrencies known for its easy and secure transactions. It has many features that make it one of the most desirable currencies that people would like to own. But what are the different ways one can trade the Bitcoins?
Following are the ways one can trade Bitcoin:
1) Buy: We can own Bitcoin by buying it from a cryptocurrency broker that owns the actual currency in Crypto wallets or we can buy it from the exchange.
2) Trade a Contract for Difference (CFD): Using an online forex broker to derivate and operate the cash margin.
3) Buy a security: Traders can use an online stockbroker to hold a share of Bitcoin that is bought through a publicly registered bitcoin-related security.
Buying the actual asset:
You can buy the actual bitcoin and become a direct possessor of the digital asset. Once you purchase the bitcoin, the virtual currency will be sent to your cryptocurrency wallet that is your bitcoin account or address along with the exchange. You can use this bitcoin for anything you desire to. Bitcoin can be used at various places to buy goods and services. You can transfer the Bitcoin to any other bitcoin wallet with the help of your private key that is used to verify the possession of the asset.
Owning Bitcoin comes with some responsibilities like safeguarding the private keys that verify the ownership of the asset. These keys are very important without which the coin holder will not be able to access any of his bitcoins. We will go through the pros and cons of owning the actual asset.
Pros of owning an actual Bitcoin:
1) If you own the actual Bitcoin with its private key you have the total control over the underlying virtual asset.
2) You can choose to make use of these coins as per your preference without requiring any verification or clearance from any third party like banks.
3) The ownership of Bitcoins is anonymous and encryption makes it difficult to trace giving you the full control over it.
4) There are multiple ways you can use the Bitcoins as selling, convert or exchange or transfer it to someone in return for goods and services.
5) If you do not want to use the Bitcoins immediately you can keep them in cold storage wallets without any risk of theft.
Cons of owning an actual Bitcoin:
1) Bitcoin comes with their own set of private keys and it is the coin holder’s responsibility to safeguard them. Without these keys, the coin holder will not be able to access the Bitcoin.
2) If the private key is lost the coin holder can lose the actual Bitcoin asset.
3) Holding actual Bitcoin can require a little bit of technical knowledge to carry out the transactions.
4) If you decide to store the private keys in the exchange you bought the Bitcoin at, there is a possibility of it to be hacked and can result in stealing your Bitcoins.
5) Not all third-party wallets are safe and can be prone to malware, phishing causing your Bitcoins to be stolen.