Modern Economic Nonsense — The Bitcoin reserve is coming
Digital currency Bitcoin has been around for almost 12 years. After all this time, we’re still wondering when the first Bitcoin exchange will go live. The wait for an exchange isn’t as long as it was back in 2014. Back then, there were only a handful of digital currency exchanges that supported BTC trading. Thanks to blockchain technology advancements and more regulated markets, the landscape has changed massively over the last few years. In late 2017 alone, we launched several new platforms catering to traders and investors. With regulated security standards and the latest security technology available today, it’s only a matter of time before an exchange becomes operational on a mass scale.
Bitcoin Deposits on Exchanges
There are more and more people showing interest in Bitcoin, the demand for trading platforms has also increased exponentially. This will lead to the launch of a number of new exchanges over the past few years. In fact, we’ve witnessed the launch of over a dozen new exchanges in 2017 alone. As a result, there are over 100 registered exchanges in the world. The world of cryptocurrency trading is still in its nascent stages. A lot of things are yet to become standardized. One such aspect that needs to be standardized is the way exchange platforms deal with deposits of Bitcoin. This can be done in a different way, depending on the platform you choose to trade on.
Bitcoin Withdrawals from Exchanges
A withdrawal of funds from an exchange is extremely easy. Simply find the desired trading pair in the platform’s trading view and send the required amount of Bitcoin to the address provided in the trading view. Now, a lot of people prefer trading altcoins with Bitcoin. In fact, a lot of investors use Bitcoin as a trading pair with various altcoins. Luckily, most exchanges currently allow investors to withdraw a maximum of Bitcoin. Withdrawals can be done by exchanging other digital assets for Bitcoin, bank transfer, or credit card.
Bitcoin Security
We’ve discussed the importance of security in this article. At the same time, you should know that security is a priority for all exchanges out there. Every single exchange follows stringent security protocols to protect their users. This is how all exchanges ensure that each user’s funds are kept safe. Some of the security protocols that all exchanges follow include strict KYC and AML policies, a robust security infrastructure, and multi-factor authentication. All four major exchanges in the world (Bitfinex, Coinbase, Gemini, and Coinbase Pro) have recently been victim to security breaches. All four exchanges have subsequently strengthened their security protocols to protect users’ funds.
Bitcoin reserve
Bitcoin is a digital currency that relies on blockchain technology. Blockchain is a decentralized ledger that records all cryptocurrency transactions. Although blockchain technology is pretty secure, it can still be compromised by cybercriminals. All major digital currency exchanges store a small portion of their users’ funds in what’s known as a Bitcoin reserve. This reserve is a safety measure to protect users’ funds in case of a hack or cyberattack on the exchange. This reserve provides protection against the loss of funds during times of disruption or outage. All Bitcoin exchanges that store a reserve also issue a unilateral guarantee that the reserve will not decrease over time. This means that every single Bitcoin exchange will maintain the same reserve ratio over time.
Future usage of Bitcoin
As we’ve seen, there are many benefits that come with trading Bitcoin on an exchange. But we need to be aware that exchange can be dangerous to keep all your assets in and it is better to store into your wallet. However, we do have some good news. The first exchange to offer Bitcoin trading will be Coinbase followed by Gemini. Both Coinbase and Gemini have announced that they will support trading of different cryptocurrencies. Other exchanges are expected to launch trading of non-crypto assets. We’ll be sure to keep an eye out for these exchanges and let you know when they go live.
Conclusion
As you can see, there are many benefits associated with trading Bitcoin on an exchange. With regulated security standards and the latest security technology available today, it’s only a matter of time before an exchange becomes operational on a mass scale. The wait for an exchange isn’t as long as it was back in 2014. Back then, there were only a handful of digital currency exchanges that supported BTC trading. All thanks to advancements in blockchain technology and more regulated markets, the landscape has changed massively over the last few years. Bitcoin deposits on exchanges, Bitcoin withdrawals, and future usage of Bitcoin - a lot has changed in the world of Bitcoin since we last wrote about it in 2017. If you’ve been curious about Bitcoin since it first came out, you’ve come to the right place. With regulated security standards and the latest security technology available today, it’s only a matter of time before an exchange becomes operational on a mass scale.
Reminder: I am not your financial advisor.
Buy me a coffee here if you want to support my writings.