Are bitcoin trading platforms safe?
Do you want to know are bitcoin trading platforms safe? There is no simple answer to this question, but there are some things you need to keep in mind if you want to trade bitcoin. There are two major kinds of bitcoin exchanges, centralized, and decentralized.
If you choose to use a centralized bitcoin exchange, you will have to send your bitcoin to the exchange's wallet, so you will lose control over the private key that creates ownership of the bitcoin.
When you do this, you may lose your bitcoin if the exchange has a problem, as was the case with Mt. GOX.
Decentralized exchanges eliminate the risk of counterparty risk, as all transactions are done on a peer-to-peer basis. On the downside, decentralized bitcoin exchanges may not offer the same liquidity as a centralized exchange, and also may not offer leverage.
You will have to decide if you want to take on the risk of using a centralized exchange, and also understand that you may lose some or all of your bitcoin if the exchange has problems.
One big advantage that centralized bitcoin exchanges have is futures contracts, which allow you to trade with leverage. This may be one of the biggest reasons to use a centralized exchange, and take on counterparty risk.
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