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What is Bitcoin? | A Beginner’s Guide

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Bitcoin Beginners Guide

If you’re someone who is looking to learn more about Bitcoin but is unsure where to start, this page is for you. In our comprehensive guide to Bitcoin, we’ll give you all the information you need to know to start investing in Bitcoin, while addressing any potential questions you may have along the way. Topics to be covered in this article include:

By the end of this guide, you’ll feel more-than-prepared to jump into the exciting world of Bitcoin. Let’s get started!

Bitcoin is the world’s first cryptocurrency. A cryptocurrency, otherwise known as a virtual currency, is simply an encrypted piece of data that can be used to buy goods and services. Bitcoins are not something that can be touched physically, instead they are bits of code that exist only in the digital realm.

Created in the wake of the 2008 financial crisis, Bitcoin was designed to provide an alternative to traditional currencies and financial institutions. What makes Bitcoin different from previous attempts at digital currencies — and consequently so valuable — is the ingenious network and security systems on which the platform is built.

Bitcoin is different in several ways:

  • Bitcoin is Decentralized – Bitcoin has no central issuing authority. In other words, no single entity controls the supply of Bitcoin in circulation. The value of your Bitcoin will never be jeopardized by the decisions of bank higher-ups or The Federal Reserve. Instead, Bitcoin is controlled entirely by its users. Even the network on which Bitcoin runs is peer-to-peer and community-managed.
  • Bitcoin Allows for Direct Transactions – Bitcoin transactions require no intermediaries. If you want to pay me with Bitcoin in exchange for a good or service, you pay me directly and no one else is involved. This comes with several benefits including increased anonymity and security.
  • Bitcoin Offers Relative Anonymity – Bitcoin transactions are carried out using randomly generated alphanumeric addresses and keys which are not traceable to your identity. We’ll get into more of the specifics of How Bitcoin Transactions Work in a later section of the guide.

The Blockchain: Decentralized Record-Keeping

Bitcoin works because of a brilliant piece of technology called the blockchain. The blockchain is a public ledger that records any and all Bitcoin transactions. The ledger is maintained by a peer-to-peer network of nodes running Bitcoin software. As Bitcoin transactions occur, they are combined in a group with other transactions into a unit called a “block”. The blocks are processed, verified, and added to the blockchain using advanced cryptographic methods that are extremely secure and resistant to data modification.

Once they are added to the chain, the blocks are broadcast to other nodes in the network. Each node maintains its own copy of the blockchain and verifies each transaction along the way. The chain is unalterable and available to everyone, making fraud a near-impossibility.

Mining

The actual processing carried out by these nodes is called “mining”. Volunteers, known as miners, use extremely high powered computers to verify incoming transactions, collect them into blocks, and add them to the blockchain.

In order to be accepted by the network, each block requires what’s called a proof-of-work. Miners are essentially given an extremely difficult puzzle with a single numeric answer. The answer could be any number and the puzzles get more and more difficult as time goes on.

There is no specific system to determine the answer, so miners simply have to use extremely powerful computers to guess, one-by-one, until they find the correct value.

On average, the number of guesses computers make before finding the correct answer is upwards of 200.5 QUINTILLION. This is an incredibly time and energy intensive process, even for the most powerful computers.

So why do Bitcoin miners bother spending all this time and energy trying to add blocks to the blockchain? It’s pretty simple; miners are rewarded with new Bitcoin for every block they successfully add. As of right now, the reward for adding a single block to the blockchain is 12.5 Bitcoins (~$137,000 at the time of writing). This incentivizes the miners to carry out the heavy-lifting which keeps the Bitcoin network running smoothly.

Clearly there is a lot of money to be made in the mining process. That being said, it requires a truly extraordinary amount of computing power to be able to compete with the biggest mining organizations, and is therefore not pursued by the average Bitcoin user.

A look inside one of the world's largest Bitcoin mining operations.

A look inside one of the world’s largest Bitcoin mining operations. – Al Jazeera

Now that you have a solid understanding of what Bitcoin is and how the technology works, it’s time to tell you how you go about buying and storing it. In short, you buy from Bitcoin Exchanges, and you store with Bitcoin Wallets.

Bitcoin Exchanges

The easiest way to buy Bitcoin is on a Bitcoin exchange. Bitcoin exchanges are platforms on which you can buy, sell, or trade Bitcoin in exchange for traditional currencies or other cryptocurrencies. There are dozens of cryptocurrency exchanges out there and users should conduct a reasonable amount of research before choosing which one is best for them.

Here’s a quick breakdown of our top exchange recommendations:

  • Coinbase – One of the oldest and most trusted exchanges, Coinbase is an all-around excellent platform, particularly if you’re new to cryptocurrency. Its website is slick and intuitive, making it incredibly easy to buy 4 of the most popular cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Coinbase also offers very flexible payment options and charges low fees compared to many other exchanges. Users can purchase the above cryptos using credit cards, debit cards, and bank transfers.

Coinbase Buy Bitcoin

  • Gemini – Founded in New York in 2015, Gemini is a relatively young exchange but has quickly garnered a reputation for itself as one of the best. It offers some more sophisticated trading technology compared to Coinbase but still remains pretty user-friendly. One of Gemini’s big selling points is its very low fees, averaging around 0.25% or less. Gemini allows users to buy either Bitcoin or Ether using ACH bank transfers and bank wires. Credit and debit cards are not supported.
  • GDAX – GDAX is another excellent option for more sophisticated cryptocurrency trading. Owned by the same company as Coinbase, the platform is extremely secure and has a solid industry reputation. Like Gemini, GDAX charges low fees averaging around 0.25% or less and accepts ACH bank transfers or bank wires.

For a more in-depth look at the various Bitcoin exchanges, take a look at our guide to the Best Bitcoin, Ethereum, and Altcoin Exchanges.

But there’s one more important thing to consider before buying Bitcoin or any other cryptocurrency: how are you going to store it?

A Bitcoin wallet is essentially a safe for your Bitcoin; it’s a secure place to keep your virtual currency in-between transactions. Your wallet does not literally store your Bitcoin inside it. Rather, your wallet stores the mathematical keys and addresses that allow you to spend and receive your Bitcoin.

Private Keys and Bitcoin Addresses

Your private key is a random string of alphanumeric characters stored in your Bitcoin wallet that’s used to sign the transactions you send. Think of it is a password that allows you to send your Bitcoin.

As the name suggests, it’s extremely important to keep your private key secret. Anyone with knowledge of your private key would be able to send your Bitcoin wherever they pleased. Protecting your private key is the primary purpose of a Bitcoin wallet.

Bitcoin wallets also store your Bitcoin addresses. A Bitcoin address is another long string of alphanumeric characters but is used for receiving Bitcoin rather than sending it. Your Bitcoin address is cryptographically derived from your private key, and any Bitcoin sent to your address is only accessible by a wallet containing your private key.

While addresses are related to your private key, there is no way to determine your private key simply by looking at the address. This means that it is completely safe to tell others your Bitcoin address. In fact, it’s a necessary step for someone to send you Bitcoin.

Wallet Types

Now that we understand what Bitcoin wallets do, we can talk about choosing the one that’s right for you. Generally speaking, security is the most important consideration when choosing a Bitcoin wallet. That being said, other factors like ease of access and convenience are also worth thinking about.

Here’s a quick rundown of the 5 different types of wallets:

  • Online – Online wallets are accessible through a web browser. The main advantage of online wallets is that you can easily access them anywhere with an internet connection. The major downside is that your private keys are stored on the website’s servers, which means you have to trust them completely to protect your Bitcoin. We recommend only storing small amounts of Bitcoin on online wallets.
  • Desktop – Desktop wallets are software programs that you install onto your computer which store your private keys. These wallets are typically more secure than web-based ones because your keys are not stored online. That being said, your computer is still susceptible to viruses or other malware that might have the potential to steal your Bitcoin, so they still are not ideal for large amounts of Bitcoin.
  • Mobile – Mobile wallets are apps installed onto your phone or tablet. There are two categories of mobile wallets: either they store your private keys locally on the device (similar to a desktop wallet) or they store your private keys online (like a web-based wallet). Mobile wallets offer the convenience of being able to use your Bitcoin on the go, but they also suffer from the same security risks as online or desktop wallets.
  • Hardware – Hardware wallets are physical devices that store your private keys offline in “cold storage”. Most of these devices are small and plug into your computer via USB whenever you need to access your Bitcoin. These hardware devices are immune to viruses and are generally considered to be the most secure wallets available. The only real downside of hardware wallets is that you have to pay for the physical hardware, though recent wallets like the Ledger Nano S are very affordable.
  • Paper – Finally, paper wallets are an alternative method of offline cold storage. They are physical pieces of paper with your public and private keys written on them. Paper wallets are generally inferior to hardware wallets, as they are both less convenient and less secure.
Hardware Wallets Trezor, Ledger, KeepKey

Hardware Wallets Trezor, Ledger Nano S, KeepKey

For a more in-depth description of the different types of wallets available, check out our guide to the Best Bitcoin Wallets.

Once you’ve gotten your wallet set up and your Bitcoin safely stored, you’re prepared to start making transactions with Bitcoin. If all of this seemed complicated, don’t worry. Actually using Bitcoin is quite simple.

The vast majority of Bitcoin transactions happen online. Paying with Bitcoin online is as simple as entering the seller’s address as well as the amount of Bitcoin you are sending. Receiving Bitcoin is similarly painless. Simply give the other party your address and they can send you the agreed-upon amount.

Bitcoin is also becoming increasingly accepted as a payment option in brick and mortar stores. This generally requires using a wallet with a mobile app to send Bitcoin to the store’s address. Stores that accept Bitcoin will often have a QR code that you can scan as a quick and easy way to pay using Bitcoin.

One important detail to note is that all Bitcoin transactions are final. If you want a refund for a purchase you made using Bitcoin, you’re out of luck.

  • Security – As a result of the blockchain and the advanced cryptography used in the transaction process, the Bitcoin system is very secure. The relative anonymity offered by Bitcoin is an additional security bonus as it makes problems like identity theft impossible.
  • Decentralization – As mentioned early on in the article, Bitcoin is totally decentralized and is therefore not subject to the whims of politicians and bank executives.
  • Internationality Bitcoin is a truly international currency. Making international transactions with Bitcoin is incredibly easy, and cryptocurrencies like Bitcoin could become increasingly valuable as we continue moving toward a more globalized economy.
  • Bitcoin may be the future – Cryptocurrency is growing at a truly unprecedented rate. Many influential people in the tech and finance world have heralded it as the coming of a new age. Its future remains uncertain but Bitcoin could be a real game-changer.
  • Market share – Bitcoin has a huge share of the cryptocurrency market. It was the first cryptocurrency and it has by far the most name-recognition among people not-yet-involved in the cryptocurrency world, making it the undeniable top-dog. If you’re going to invest in any cryptocurrency, Bitcoin is the most obvious choice.

  • Volatility – Bitcoin has famously experienced some extremely dramatic swings in value over the course of its lifetime. Overall the value has grown unbelievably, but there still remains some fear that Bitcoin is a bubble waiting to burst. Even if it isn’t, Bitcoin’s value fluctuates 5% or more on most days. Obviously the trend has been upward so far and there’s reason to be optimistic about the future, but the ride will probably be a bumpy one. As with many other types of investments, only invest what you can afford to lose.  
  • Legal uncertainty – Bitcoin’s legal and regulatory status in many countries remains pretty up in the air.
  • Limited retail options – While the list of retailers that accept Bitcoin is consistently growing, businesses have been fairly slow to adopt the technology. This should theoretically become less of an issue as Bitcoin becomes better-established.
  • Scams and Hacks – Scams are commonplace in the cryptocurrency world. Ponzi schemes promising unbelievable GUARANTEED returns have tempted many people, and have resulted in the loss of a lot of money. Just remember: if it sounds too good to be true, it probably is. Hacks are less common but are still a concern. Some well-known exchanges have been hacked over the course of Bitcoin’s lifetime, and stolen money can be difficult or impossible to get back. That being said, modern exchanges have learned from the failures of their predecessors and are more secure than ever before.
  • Possibly inferior to other cryptos – Finally, in spite of its status as the most valuable cryptocurrency in the world, many would argue that Bitcoin is inferior to other cryptocurrencies. Its decentralized nature means that Bitcoin is very slow-moving. There is no central organization behind it to help it adapt and make changes. Instead, any restructuring of the network or the system requires majority consensus of the miners. Other cryptos use newer technology and might benefit from having more centralized models. Bitcoin led the world into the cryptocurrency revolution, but it’s possible that it may not be the coin to deliver on the concept’s full potential.

Summary

Bitcoin used the innovative technology of the blockchain to completely reimagine what financial systems look like. No longer do people have to rely on banks or credit unions to store and protect their money. Instead, Bitcoin offers its users unprecedented control of their funds in a format that is secure, convenient, and confidential.

The technology is still very new and not without its problems. That being said, most of the disadvantages described above simply stem from how revolutionary Bitcoin is. Many issues like the constant value fluctuations, legal uncertainty, and limited retail options should become less problematic as Bitcoin becomes better-established.

All this gives reason to think that Bitcoin’s future is looking bright.

The post What is Bitcoin? | A Beginner’s Guide appeared first on UNHASHED.

Source: https://unhashed.com/cryptocurrency-coin-guides/bitcoin/

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Grayscale Buys Another $186 Million in Bitcoin: Approaching $6B Crypto Assets Under Management

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Grayscale has enlarged its Bitcoin Trust, as 17,100 BTC were added to Grayscale’s funds at current prices, as the investment is worth approximately $186 million.

grayscale_sep28
Grayscale BTC Trust. Data by Bybt

Crypto AUM Approaches $6 Billion

The total assets under management (AUM) for all Grayscale Investments crypto funds totaled $5.8 billion according to its last market report for the week ending September 25.

The Bitcoin Trust, or GBTC, is by far the largest fund, containing 82.75% of the total investment, or $4.8 billion. Following that is the Ethereum Trust, which has almost $784 million invested, or 13.5% of the total.

The rest is divided into smaller funds for Bitcoin Cash, Ethereum Classic, Litecoin, XRP, Zcash, and a couple more.

Grayscale buys shares for its investors so that they do not have any direct exposure to the underlying asset. Its BTC shares are currently trading at $11.23, and the Bitcoin holdings per share are up almost 46% so far this year.

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The move signifies continued institutional interest in Bitcoin and crypto assets despite having corrected almost 20% since its peak this year. Grayscale also stated that there would be a huge wealth transfer over the next quarter-century, and the younger generation is interested in Bitcoin and crypto;

“$68 trillion will be transferred from older generations to younger generations over the next 25 years. It’s time to pay attention to the behaviors of the next generation of investors.”

Bitcoin Closes Bullish on The Weekly Candle

The weekend has seen Bitcoin grind slowly higher again in an attempt to reclaim the psychological $11K price level.

Analyst Josh Rager has observed the weekly candle close, adding that Bitcoin has up-trended for the third week in a row and remains bullish.

A retest of the monthly high is also a sign that there are more buyers than sellers at the moment though the next level is critical, and BTC must hold the $11k zone to register further gains.

The $150 million KuCoin hack did not cause any significant sell-off over the weekend, which is a testament to how resilient cryptocurrency markets have become to such incidents.

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Source: https://cryptopotato.com/grayscale-buys-another-186-million-in-bitcoin-approaching-6b-crypto-assets-under-management/

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Almost 2 Million Test ETH Currently Staked on Ethereum 2.0’s Medalla Testnet

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Validator participation in Ethereum 2.0’s Medalla testnet is on the rise. And with the growing number of them, the number of staked test ETH is about to close in on a new high of Almost two million test ETH tokens, that are now staked on Medalla.

This comes amid the launch of the Optimism Layer for Ethereum and DeFi TVL clocking $11 billion.

Ethereum 2.0 Medalla Testnet: The Numbers Say It All

As per the latest update, validators have staked a little close to 2 million Goerli test tokens on the Ethereum 2.0 Medalla test net. Active validators are just above 62,000, with network participation ranging between 72 percent to 80 percent in the last 24 hours.

staked eth against validators
Close to 2 Million Test ETH Staked by More than 62,000 Validators, Source: Beaconcha

As of now, close to two million test ETH tokens are eligible for voting whereas only little more than 1.5 million Ethers have actually voted to validate Medalla.

According to the last update on test ETH staking, around 38,000 participants had plugged in more than 1.1 million Goerli Ethereum tokens. Since then validator participation has gone up to 63.2% in a month’s time.

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ETH Layer 2 Testnet Launched To Give an ‘Optimistic Shape’ To Scaling

As seen above folks are actively working to make Ethereum 2.0 a roaring success. But besides Medalla, Plasma Group developers have been hard at work to reduce the activity load on the Ethereum main net.

Dubbed as ‘Optimism Layer 2,’ the test net will find deployment over the currently trending projects to test Ethereum’s scaling capabilities.

In its entirety, Optimism is OVM, a fully-featured Ethereum Virtual Machine (EVM) compliant execution environment. It’s objective is to work off the root chain to process data and transactions faster.

Optimism is the only generic L2 solution for Ethereum. This means that it does not need to include specific functionality to support existing L1 protocols.

DeFi protocol Synthetix will take the beginning shot at trialing Optimism. And in the process will offer 200,000 SNX in rewards to their users for participating. Synthetix said that currently, the test net is open to the public, but is not available for public contract deployment.

Total Value Locked In DeFi Clocks $11 Billion

Speaking about defi, recent data points to a resurgence in USD deposits in decentralized finance protocols. As per the latest numbers, the total value locked (TVL) has topped $11.13 billion.

defi tvl
Total USD Value Locked in Defi Tops $11.13 BIllion, Source: DeFi Pulse

The recent rise in activity comes after decentralized exchange Uniswap clocked around $2.3 billion in liquidity, an all-time high for the Ethereum based DEX. This has made it the top DeFi project with an almost 19% dominance.

DeFi lending projects Maker and Aave are also closely trailing behind Uniswap with $1.95 billion and $1.53 billion in USD deposits.

But the current star of the ecosystem is dForce which is designed to be an ecosystem that offers a full-stack solution for DeFi. The project has experienced a near 150% infusion of funds which parabolically pumped its TVL number from $104 million to $257 million in the last 24 hours.

Despite the explosive trend in the DeFi market, ETH has portrayed a lackluster price action. The token is trading sideways $357 a coin.

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Source: https://cryptopotato.com/almost-2-million-test-eth-currently-staked-on-ethereum-2-0s-medalla-testnet/

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Huobi Guide & Exchange Review: How to Trade Options, Futures, and Perpetual Swaps

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Founded all the way back in 2013, Huobi Group is one of the leading blockchain companies in the industry.

It’s safe to say that the company has come a long way since then and it’s currently offering a variety of services for its wide user base. Employing people globally, Huobi offers a myriad of crypto-related services, including digital asset trading, wallet, mining pool, incubation, research, proprietary investment, and so forth.

Cryptocurrency trading has surged in interest throughout the past few years and exchanges such as Huobi have worked hard to expand their offerings. Derivatives products, apart from traditional spot trading, have exploded in interest, and Huobi is doing its best to accommodate.

Among its popular trading products are the futures, perpetual swaps, and options platforms. In this guide, we will take a closer look at how these tools operate and provide a step-by-step explanation of how to use them.

Quick Navigation:

Huobi Futures

UI/UX 10.0
Security 9.2
Coin Variety 10.0
Liquidity 10.0

Pros

  • Simplified trading interface with a variety of features, veteran exchange
  • One stop shop for trading futures, options, and perpetual swaps
  • An abundance of trading pairs to choose from

Cons

  • Limited assets for perpetual swap trading
  • Verification is mandatory for Huobi Futures

How to Register on Huobi?

Before anything else, however, you’d first have to register for an account. The process is fairly simple. There’s no mandatory Know-Your-Customer (KYC) procedure for spot trading, but if you want to start using the derivatives platforms, the ID verification is obligatory.

This is how the registration screen looks like:

Huobi_1

All that is needed here is an email address that has to be verified through a verification code later on.

Once you have your account opened, it’s highly recommended to take a few additional security steps. First, it’s important to enable the Two-Factor Authentication (2FA), using the Google Authenticator app.

In addition, Huobi has taken a few extra steps that protect your account in the event of it being hacked such as email verification codes, phone verification codes, a designated fund password to ensure fiat asset security, and so forth.

If you want to trade on the derivatives platform, you’d have to go through an additional ID verification step which requires you to input your names, a government-issued passport, driving license or ID number, and upload a picture of it.

We’ve completed all the steps and, in our experience, the process was seamless and the KYC took no more than a few minutes to be completed and approved by Huobi’s team.

How to Deposit and Withdraw Funds?

Now that you have your account set up, it’s time to load it with some funds. Depositing is fairly straightforward and users can choose between a myriad of cryptocurrencies, including Bitcoin, ETH, USDT, and many others.

From the top navigation bar, you need to hover over “Balances” and choose the account you wish to fund. Regardless of where you deposit initially, you can easily transfer the funds between the accounts – it’s instant.

Huobi_2

After you select the cryptocurrency you want to deposit, all you need to do is click on the “deposit” button, which will pull up this screen. In this case, we’ve deposited the stablecoin USDT.

Huobi_3

In any case, regardless of the cryptocurrency you deposit, make sure to correctly select the transaction network (when applicable) – in our case, we used USDT on Ethereum’s ERC-20 standard.

From here, you can make quick, zero-fees transfers between the different internal accounts and fund your derivatives one. All you need to do is open the account, select the currency that you want to transfer, specify the amount, and confirm the operation:

Huobi_4

Once this is done, you are ready to begin using the offered derivatives products. Let’s have a look at all of them.

How to Trade Bitcoin Options on Huobi?

Options contracts are one of the most popular derivatives, used constantly in traditional finance. Lately, there’s a huge demand for cryptocurrency options as well. However, keep in mind, derivatives and options are not recommended for beginners as they carry more risk.

Huobi Futures has a dedicated options platform where currently users can trade both Bitcoin and Ethereum options. In this guide, we will focus on Bitcoin.

By definition, an options contract represents an agreement between two parties to facilitate a transaction on the underlying asset (in this case – Bitcoin/USDT index), at a preset price (known as the Strike Price), prior to the expiration date.

Purchasing a CALL option means that the buyer has the right to buy BTC corresponding to the contract face value at the strike price. On the other hand, a PUT option means that the buyer has the right to sell BTC under the same conditions.

In the below example, we will show how you can buy a CALL contract on Bitcoin and all the necessary details. First, when you land on the Huobi Options trading platform, that’s what you will see: Huobi_5

In the top left corner is where you select the type of Bitcoin options contract you want to trade with. For this example, we’ve used the Weekly BTC contract with a strike price of $8,500 and expiry on September 18th, and a leverage level of 5x.

Below is the board where you can monitor the prices for the different contracts based on their strike price factor.

As can be seen in this example, our contract costs around $2,400 to buy (bid). Huobi uses a system where traders can open positions based on contracts, where one BTC options contract equals 0.001 BTC or about $10 at current rates, as of writing this guide.

The par-value for a contract of ETH option equals 0.01 ETH, or about $3 at current rates. Unlike other margin exchanges, users can join options trading on Huobi with fairly low entry barriers.

Now, let’s see how to open a CALL position, as we assume the price of Bitcoin will close above the strike price of $8,500 on September 18th.

Huobi_6

From the order menu, we’ve selected a price that we want to buy the contract at – it’s $2414 and the number of Contracts that we want to purchase, in this case, it’s the maximum amount of 25 contracts, which is about $250.

As soon as we hit the Buy Call button, our Limit order will be placed and when the Mark price of the contract reaches it, the order will be executed and we will have 25 Contracts ($10 each) giving us the right to buy Bitcoin at $8,500 (strike price) when the contract expires on September 18th.

If the price of Bitcoin is above $8,500, we will realize a profit, if it’s below that, we will lose the options premium.

Below is our open position – we managed to get in at a price of $2,459 – and we got 24 contracts open. Below the order box is where you can track your positions and their performance. Huobi_7

If you want to close the position, you can specify the price at which you want to close and the overall amount of your position that you want to close.

Now, in this example, we’ve only shown how to buy a CALL option for Bitcoin, but users can also buy PUT options and they can sell contracts as well. For detailed information on how to do those operations, you can check the official guide.

How to Trade Bitcoin Futures on Huobi?

Moving on, Bitcoin futures are also available on Huobi. Here, users can buy these contracts and speculate on whether or not the price of Bitcoin will be above or below the current price on a pre-set date.

Huobi_8
Huobi Futures interface

From the left pane, users can choose from a verity of the over 60 cryptocurrencies and the available futures contracts. For Bitcoin, Huobi offers weekly, bi-weekly, quarterly, and bi-quarterly contracts, and supports leverage up to 125x.

Basically, if you believe that the price of Bitcoin will be higher than the current price at the expiration date of a given contract, you should open a long (buy) position. If you think it’s going to be lower, you should open a short (sell) position.

How to Trade Bitcoin Perpetual Swaps

Perpetual swaps are probably the most popular cryptocurrency derivative instrument. They are like traditional futures with the exception that they don’t have an expiry date. In other words, traders can open and close them whenever they want to.

Huobi_9
Huobi Perpetual Swaps

It’s worth noting that Huobi even offers USDT/USD perpetual swaps with leverage of 1X -1000X, becoming the industry pioneer in USDT derivatives.

Besides, for the non-stablecoins,  traders can use perpetual swaps with extremely high leverage of up to 125X for BTC swaps and 75X for other swaps. In other words, you can open a position worth 125 times the amount you have in your account.

Huobi Futures offers different leverages such as 1x, 3x,5x,20x, 125x, and even 1000x. Users can choose freely according to their needs.

While this brings opportunities for big profits, please be aware that it’s also extremely risky as the slightest movement in the opposite direction of your position can liquidate your position, causing you to lose your capital. Using high leverage is definitely not recommended for inexperienced traders.

Customer Support

Huobi’s overall customer support is very satisfying. From our test experience, the team is very responsive and easy to communicate with.

Elsewhere, the KYC verification process is particularly quick. After we submitted the documents needed for the identity verification, the team took no more than a few minutes to have them checked and approved the account for trading.

Security: Is it Safe to Trade on Huobi Futures?

Huobi is one of the largest cryptocurrency exchanges in the world. It’s an established company with thousands of employees. While it’s never recommended to keep a large amount of crypto in an exchange, Huobi is regarded as being very safe to use.

The team has also added a myriad of additional security features that users can opt in to further protect their accounts. Of course, you should also beware of scam artists and phishing attacks.

Trading Fees on Huobi

When it comes to the trading fees, Huobi has various fees on its platforms, so let’s have a look at a detailed breakdown for individual traders:

  • Futures Trading Fees

Huobi_10

  • Huobi Perpetual Swaps Trading Fees

Huobi_11

  • Huobi Options Trading Fees

Huobi_12

It’s also worth mentioning that Huobi Futures also provides VIP Sharing Program and Market Maker Program to lower big user’s switching costs to Huobi. For example, Huobi options maker fee rebate is as high as 0.003 USDT per contract.

Conclusion

In general, Huobi is one of the most reputable exchanges out there and they live up to the statements. The customer support is quick and easy to communicate with, the exchange offers a range of different tools to accommodate the needs of various traders.

Their Bitcoin Options trading platform is convenient, rather intuitive, and easy to work with. There’s a range of different contracts with various leverage options and expiration dates.

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Click here to start trading on BitMEX and receive 10% discount on fees for 6 months.


Source: https://cryptopotato.com/huobi-guide-review-how-to-trade-options-futures/

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