Bitcoin is the largest digital currency in the market. Found in 2009, Bitcoin's current value is around $2200 per one unit. Bitcoin is a software code that is encrypted and is created by the Bitcoin algorithms. The software is mined and verified by millions of miners worldwide. The digitally created currency can be used to buy real life goods such as coffee, flight ticekts, online shopping, and so on.
Extensive software and hardware are needed for Bitcoin mining and verification. Modern Application Specific Integrated Circuits (ASIC) are significantly reducing the electricity bills when compared to the earlier processing units.
For every user, a public key and a private key are allotted which can be stored in different wallets. The private key and any hardware used to store/process bitcoin are so crucial and the Bitcoin cannot be recovered if they are lost.
Bitcoin is mostly transaction based currency where every transaction is verified and confirmed by multiple users. A ledger book called Blockchain keeps a record of all the transactions. The miners are rewarded with Bitcoin for verifying the transactions.
Bitcoins are often bought through different exchanges. Bitcoin Exchanges faciliate buying, selling, and trading of Bitcoins for common users. Orders are processed on a First-in-First-Out or on a Pro-rated basis.
Bitcoin exchanges have order matching engines that process the orders based on the time and the volume. Market order, Limit order, Stop order, and so on are possible through the Bitcoin exchanges. The orders are processed and updated in the order book.
Order books from different exchanges can be compared to see the the current orders and offers.
Wallets are available in the exchanges to store Bitcoins. Once the order is processed, the Bitcoin is credited or debited from the wallet along with the transaction fees.
Bitcoin Exchanges allow placing orders via the digital platforms and smart phone applications.
Bitcoin orders are processed through out the day worldwide and are not limited to day only.
Bitcoin mathcing is guided by different algorithms and calculations. The transactions are also verified and confirmed by the network.
If there is a buy order, the Order Matching Engine checks for same price or lower. For a sell order, higher price or same price is matched. If there is a market order, the highest selling price or lowest buying price is matched.
Records are updated after a transaction is marked complete. All Bitcoin users have their ledger automatically updated based on the completed transaction.
Bitcoin is a peer-to-peer transaction system and is a must for an investor's portfolio. Bitcoin matching fundamentals are essential to know how your transactions are processd.
Bitcoin users must secure the public key, private key, and any hardware associated with the Bitcoins. Frequent backups and storing the keys in a secure place is crucial. All Bitcoin transactions are irreversible and lost money cannot be retrieved.
The exchanges have control over the Bitcoins and if they are hacked, your Bitcoin are lost. It is suggested to keep a minimum amont in the wallets and withdraw the Bitcoin if you are not planning to spend.
Exchanges insist on having multi factor authentication for security. Check for the peak periods of the day and change your investing strategy. Bitcoin trading is an important activity and if you are investing in Bitcoin, it is suggested to monitor frequently.