An Economics Education by Bitcoin – III

Some of these web-based Bitcoin wallets are available to choose from, and have different features, costs, and reputations to review and consider. Do you need trading tools? Do you need currency exchange services? Do you need “cold” vault storage? Do you want multi-factor authentication? All you need is someone to offer it to you.

Once you’ve created your account and wallet, how do you get Bitcoins? There are two obvious answers. First, if you already have money in one currency and want to convert it to another currency, you can exchange it. Second, in the same way that you sell goods or labor with your local currency, you sell goods or labor for Bitcoin. I explored these two options.

Bitcoin exchanges work in the same way as conventional currency exchanges. There are competing companies that are eager to acquire different currencies and adjust their exchange rates. There are ATM windows that you can visit in person, and there are also automated ones, such as ATMs that accept currency, credit cards or Bitcoin, and those that distribute currency or Bitcoin. I prefer to do my transactions online, so I researched different online exchanges. Every time you buy Bitcoin, you have to create and fund an account and then you have to apply to buy or sell Bitcoin – and there’s an expansion, similar to securities. In this respect, mediation is similar to a traditional account, but without SIPC insurance. If the exchange is hacked, shut down, or otherwise compromised, your deposits may be temporarily unavailable or permanently lost. That’s already happened with a couple of Bitcoin exchanges, which has strengthened my previous mental notes to re-evaluate my risks if my balances become significant.

I then updated the business websites to indicate that we have accepted Bitcoin. I thought I could avoid the spread of fees and the question of supply if someone got to pay for my goods or services at the current price. A few years later, since I didn’t win a single Bitcoin, I went back to the exchange exam.

II. If you are unfamiliar with business stock budgets or “depth” charts, they are basically two lists. A list sorts by price all the “purchase” requests for the specified new equity, showing the quantity requested at various price levels; it also “sells” orders. When someone makes a “market” request to buy ABC, ABC’s excellent “sell” requests match the price order. Thus, if someone sells 100 shares of ABC for $ 30 and someone else sells 500 shares for $ 31, all $ 100 shares of $ 30 will be consumed in exchange for selling only one $ 31 share. Bitcoin exchanges work the same way.