Bitcoins As A Payment Option For Bitcoin Forex Brokers
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Bitcoin is a cryptocurrency that is being traded in the global financial markets ever since it came into existence in 2011. The unprecedented popularity and anticipation of the world’s first electronic cryptocurrency had sparked immense volatility, which took the value of a single Bitcoin to around $1200 within three years of its inception. Bitcoin had paved the way for numerous investors to accrue millions of dollars in profits, while it has also led several others to financial ruin. Presently, Bitcoin is trading at a reasonable level, and it does seem that the cryptocurrency has started experiencing more liquidity that inadvertently reduces the amount of volatility and unexpected price fluctuations.
Bitcoin Forex brokers started accepting BTC as a valid form of payment back in 2013 and have also enabled traders to trade bitcoins against other currencies such as the Euro and the US Dollar. The concept of bitcoins is relatively new, and there are only a few Forex brokers in the world that accept bitcoins. Normally, it is easier to fund a Forex trading account using other payment options, but traders usually prefer bitcoins if they do not wish to disclose their bank or card information to their brokers.
Bitcoin Controversies & The Mode Of Payment
Bitcoin is rumored to be founded by a person called Satoshi Nakamoto, who is considered to be a single person or a group of programmers. Bitcoin is an entirely decentralized currency, and no single Government or financial institution has any control over the cryptocurrency in any manner. The lack of control and the relative anonymity of bitcoins have received flak from several quarters of the world that has deemed bitcoin to have hurt Governments’ ability to track the flow of money to counter terrorism and financial crimes. According to a recent study, bitcoins are used extensively by anti-social elements, hackers, terrorists, and even financial companies to transact massive amounts of money through the darknet.
Bitcoin was designed as a decentralized currency that can be used to make payments through an online platform. Bitcoins are generated according to sophisticated algorithms that are developed by leading programmers using highly powerful computing software and elaborate server network. Bitcoin production has a specified limit of 21 million bitcoins, which is anticipated to be achieved by the year 2040.
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How Does Bitcoin Work?
Bitcoin can be converted to different currencies through exchange houses that are situated in various parts of the world. Although Bitcoin is not regulated by any agency, bitcoin exchange houses are required to be regulated and authorized by a country’s regulatory authority. This has led to numerous companies setting up an online exchange house that facilitates the exchange of bitcoins for other currencies. The downside to online exchange houses is that there are more scam brokers than genuine companies, which leads to an unfavorable deal for a majority of online users. The US Government has expressly warned bitcoin exchange houses situated in the US to follow all regulatory guidelines, and to ensure that they adhere to strict anti-money laundering rules stipulated by the Government. Nevertheless, several leading financial experts in the developed economies of the world have rendered support for bitcoins and has labeled the cryptocurrency as one of the most exciting new concepts in the global financial markets.
Every Bitcoin account holder gets a Private Key that should be retained and kept safe for all future transactions. The Private Key is the only identifying document that links a user to his bitcoin account. If a user loses his Private Key, he will no longer be able to access his account and claim ownership of his bitcoins. All transactions are recorded through a Blockchain, which tracks a transaction and its associated units through a public ledger. Every transaction must be digitally signed using the Private Key to be valid, and the transaction is completed within milliseconds. Users can denominate any amount of bitcoins for transactions, which also include fractions, due to the inherently high value of a single bitcoin.
Funding a bitcoin account is a complicated process, as a user cannot get bitcoins through conventional payment methods. The primary way of getting bitcoins is through Mining, the process of creating bitcoins by solving complex algorithmic problems using high-speed and resource-intensive computers. The process of mining is considered to be time-consuming and requires computers with large computing powers; therefore, the average user will find it hard to mine for a single bitcoin using meager resources.
Users can buy bitcoins through exchange houses, which allow users to purchase bitcoins according to the prevailing market rate. The price of a bitcoin fluctuates according to the demand and supply, and bitcoin exchange companies usually add a markup spread for buying and selling bitcoins against major currencies. Some online payment processors such as NETELLER also allows their users to buy and sell bitcoins using the money available in their e-wallets, which is also an excellent way of using bitcoins for paying.
What Are The Advantages Of Bitcoin Forex Brokers & Where Can I Find One?
Bitcoin has the lowest penetration among Forex broker when compared to the other online payment platforms, but Bitcoin offers the most secure and anonymous payment option that cannot be matched by any of the existing payment processors. Several e-wallets also require users to verify their identity through credit cards, bank transfers, or through other identifying documents, but bitcoin account holders get access to their bitcoins without undergoing any identification procedure. Here is a list of Forex brokers that allow bitcoin payments as well as the ability to trade bitcoins through their cryptocurrency trading accounts.
Creating a new bitcoin account for funding a Forex account is a tedious and complicated process, especially since Forex brokers require a trader to submit a multitude of identifying documents for verification purposes. Unless a trader wishes to trade the markets without making a withdrawal, the anonymity aspect of bitcoin rarely works in the context of Forex trading. Every Forex regulatory agency requires its brokers to get a full range of information from their clients before allowing them to trade the FX markets. Therefore, it makes sense to choose a Forex broker that accepts bitcoins only if you have bitcoins available in your account and wish to fund your trading account using your bitcoins.