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CRYPTOCURRENCY

South Africans can earn money using Bitcoin

South Africans can earn money using Bitcoin
The Siliconreview
23 August, 2021

The cryptocurrency market is booming nowadays as Bitcoin is heading for new highs, according to major investors. The digital coin was first launched in 2009 and slowly grew from zero to over $60000. Bitcoin is traded as a digital currency in the form of data, and you cannot hold the asset physically in your hand like gold or other instruments. It also does not have any influence from governments and banks as it comes under a decentralized authority. Bitcoins are produced and stored in a ledger system which is called a blockchain.

Advantages of Bitcoin Trading

Some of the advantages of trading bitcoin can be listed as follows:

  • Volatility. There is a good amount of volatility that is available to traders while trading bitcoin. The digital asset can increase or decrease its price movement, which provides profitable opportunities.
  • Transparency. All the transactions that occur in Bitcoin are made public and are trackable. Therefore it is quite impossible to cheat the system.
  • Costs. The transaction costs that incur while transferring your coins are considerably less. There are also no taxations on the digital instrument.
  • It is pretty easy to send and receive bitcoin using simple trading applications on your smartphone or desktop trading platform. You don’t have to go to a bank or ATM to perform complex transactions etc.

Disadvantages of Bitcoin Trading

There are a few drawbacks to bitcoin trading as well that are listed as follows:

  • Bitcoin exchanges are prone to hackers. There have been several instances in the past where brokers were subjected to hackers resulting in huge loss of funds.
  • A minority of businesses and merchants currently accept cryptocurrency. The outlook may improve in the future, but it may take much time before that happens.

It is possible to lose your bitcoins if the wallet or the hard drive containing the coins gets corrupted.

How can you trade Bitcoins?

Trading bitcoin is relatively easy and can be performed in a few simple steps. At first, traders will have to open an account through a regulated broker. Signing up is easy and will require a few minutes of your time. Some brokers need customers to verify their credentials due to their KYC policies in Bitcoin trading South Africa. After verification, traders can proceed to deposit funds using the available methods. As soon as the money shows up in your account, you can start trading.

Important Terminologies in Trading Cryptos

There are a few essential terminologies that may differ from other markets that traders should know about Bitcoin.

Wallet

A bitcoin wallet is used to store the cryptocurrency and is protected with the help of a private key. It is a type of digital household that traders can use to receive their cryptos and send them. These wallets are considered a safer option in regards to online ones.

Mining

Bitcoin mining is a good way to earn passive income with an average amount of investment. It requires a GPU Or an ASIC with enough mining power. The hardware solves the complex mining puzzle, which maintains the ledger of transactions, and in reward, the trader receives a portion of the cryptocurrency. There are farms that contain hundreds and thousands of miners involved in the function of mining 24/7/365.

Strategy and Algorithms

A solid strategy that has proper risk management is vital in terms of trading cryptocurrencies. Nowadays, various algorithms are being developed to trade Bitcoin and other digital assets. These robots or expert advisors might be semi, or fully automated and are capable of high-frequency trading, which is impossible with manual execution.

Brokers

Brokers and cryptocurrency exchanges are used for trading bitcoin and other digital instruments. It is vital to select the proper brokerage to ensure that you are not cheated. Taking a note of deposit/withdrawal methods, spreads and regulation are also essential. There are many brokers in Bitcoin trading South Africa that traders can choose from.