How Transaction Is Carried Out

If you want to start trading on exchange you have to verify your identity by going through a set of the authentication process. After you have verified your identity and authentication is over you will be provided with an account in which you have to put some money before you start trading Bitcoins. Here is full article about Bitcoin. The mode of payment for depositing money is different for each exchange.

  • You can transfer directly from your other bank account to this account
  • You can make use of bank wires to deposit money
  • Use your debit or credit cards for deposition.
  • You can make drafts in bank of the desired amount and deposit that.
  • Buy gift cards and deposit them.

At any point of time traders are allowed to withdraw money from this account. They are provided with different options to withdraw money from the exchange like

  • Standard transferring to your bank account
  • Using Paypal to transfer money
  • Some offer delivery of cash as well
  • Bank wire transfer
  • Transferring to your credit card

When you deposit or withdraw money from your account you are supposed to pay some fees. As mentioned above there are different modes that you can use to deposit and withdraw depending on which you are supposed to pay some price. The more probability there is of getting a chargeback from the opted payment mode, the fees are high. Chargeback is less for bank drafts and bank wires and more for PayPal and credit or debit card.

So far we know that you have transaction fee to perform trading and you have to pay fees to withdraw and transfer money. These are not the only charges that you need to pay, there is also another fee known as currency conversion fees. This fee depends on the type of currency that Bitcoin exchange is accepting. Suppose the exchange is dealing only with US currency but you transfer Singapore dollars, the bank will take some fee and convert your currency from US dollars to Singapore dollars. You can avoid paying this fee by doing a transaction with the same currency type.

The terms that usually people get confused with are Bitcoin exchange and Bitcoin wallet. Bitcoin exchange is a marketplace where you can perform trading of Bitcoins and on the other hand Bitcoin wallet is a place where you store your Bitcoins safely which is a digital form of storage. Technically this is a place where keys are generated which is used by the users to access the Bitcoins.