The world of decentralised finance and the increased deployment of cryptocurrencies has grown at an exponential rate since its creation.
In 2009, an anonymous developer, or group of developers, by the name Satoshi Nakamoto started Bitcoin (BTC). It was an attempt to undermine financial institutions and decentralise finance, cutting out the need for banks or centralised institutions in financial transactions and handing over more control and ownership to the individuals spending their money.
Financial trading has evolved to a state where anyone can start trading with potentially very little knowledge of the industry and its nuances. At first, the buying of cryptocurrencies, unlike the traditional stocks and forex markets, had to be done on an exchange. The exchange provides information on how many (or how much) of a particular crypto coin you can purchase and how much it is worth.
In recent years, it has become even easier to buy coins. There have been a number of fintech companies with exchanges who have developed sites and apps that are easily accessible and understandable, even for amateur traders to buy BTC using multiple methods of payment including credit cards, debit cards, and PayPal.
Furthermore, cryptocurrencies are largely traded via CFDs (or Contract for Difference). Essentially, trading via CFDs allows the user to analyse relevant data, speculate on the price movements of assets and choose whether to buy or sell that asset without actually owning the asset. So how does this affect cryptos?
What is Cryptocurrency?
A cryptocurrency is a decentralised digital currency. It is based on blockchain technology which is a ledger that is continuously updated and monitored by a network of computers around the globe, this makes it nearly impossible to counterfeit and it is not controlled by any central financial authority.
The computers utilising the blockchain technology secure the network through solving complex mathematical computations and must be verified by each of the systems in the network in order for any transaction to be processed successfully which adds an extra layer of security to the systems.
These virtual coins are quickly being adopted into everyday life and more retailers are accepting BTC as a form of payment as well as traditional methods. This can be seen with major organisations and retailers accepting BTC payments such as: eBay, Starbucks and Amazon. This mass implementation of cryptocurrencies like BTC will only serve to drive up the value and further expand the uses of the coin. And with so many options to spend bitcoin today, cryptocurrencies are definitely the watchout factor in the near future.
Pros and Cons of Buying Bitcoin with a Credit Card?
In order to buy BTC or any other cryptocurrency you must first acquire a digital wallet to hold your coins (tokens) before you can trade or spend them. This is easy to set up and pretty straight forward. The process of purchasing BTC is made significantly easier as it is done without cash and without the need to go through third party sites. Another advantage of specifically purchasing with a credit card is you can enjoy the benefits and rewards offered by the provider.
When buying BTC with a credit card, you can also enjoy high speed transfers. Bank transfers can often take up to several days, this difference in speed can provide greater security for users as there is less chance for fraudulent activities. Cons of buying BTC with your credit card are you can overspend, although this also applies to the general use of your card, it can seem a lot easier to spend the money and go over the agreed limit of your credit card provider.
There is also the risk of your card information being stolen if you don’t end up using a trustworthy exchange which requires a lot of patience and research. Another disadvantage when buying BTC with your credit card is the market is extremely volatile and you may go into debt very quickly because of the market fluctuations.
A look to the Future
The crypto market has an extremely volatile nature, with prices varying dramatically. While this can be seen as a negative, there is also the opportunity for traders who have done their due diligence researching the various coins and market trends to turn a quick profit and potentially have a stake in the future of global currency. Buying BTC has never been easier using any traditional method available. But it’s important to conduct as much research as possible in order to feel confident in investing your money in cryptocurrencies, whichever payment method you are using