Libraryback to all articles
Did You Know You Can Trade Binary Options with Bitcoins?
You can now take advantage of the web’s easiest method for bitcoin trading using binary options – which isn’t just an indication of how far the world has really come, it’s also amazing in terms of the sheer possibilities and doors this opens up!
At this point you now might be wondering what bitcoins are and what binary options are. In which case, the whole concept might be a little lost on you… Read on and we’ll make sense of it.
What Are Bitcoins?
Bitcoins are an exciting new form of currency which are just about as science fiction in concept as anything you might have read about in any novel or seen in any film.
Basically, this is a ‘digital currency’ which allows you to pay for things online and to pretty much ‘create’ money out of nothing. How is this possible? How can something that has no intrinsic value and no finite quantity possibly be used as a currency? Dollars are of course tied to gold, which is valuable because it’s limited.
So how does bitcoin work? It’s actually one of several forms of online currency but it’s also the most popular – with pubs even cropping up around Silicon Valley where you can order drinks using the bitcoin.
The way it works is like a big ledger that is shared by lots of users. When you get paid for something or pay someone using bitcoin, your transaction is recorded onto the ledger which is highly encrypted so that it needs to be ‘solved’ using complex math equations.
Computers will then compete in order to solve that equation and thereby confirm the transaction. This ensures that not just anyone can claim they’re using bitcoins and send you imaginary money. When a computer manages to solve the algorithms, the owner of that system then is awarded with more bitcoins. This process is called ‘mining’ and it allows anyone with enough raw computing power to earn money from the system.
All this is carried out over a peer-to-peer system that works similarly to file sharing platforms like BitTorrent and chat software like Skype. Due to the way that the algorithms and system have been set up, it becomes increasingly difficult to mine the bitcoins and there is a limit to the total amount that can ever be mined – which is 21m. This actually protects the bitcoins in circulation by preventing banks from issuing new bitcoins etc.
You don’t really need to wrap your head around it – just know that it’s a smart system set up by some very clever people that completely removes the need for a centralized bank. What’s more, is that bitcoins can be handled completely via algorithm. This means that in theory, you could write a piece of software that would play the stock market entirely independently of you – without you ever having to inject more cash. It could even acquire more funds when needed by mining for them!
But we’re getting a little ahead of ourselves…
What is Binary Options Trading?
So what is binary options trading? This is another financial concept that might seem a little abstract on the surface but has some very real world benefits for those able to wrap their heads around it.
Basically, binary options trading is a form of trading on the stock market that allows you to buy and sell ‘options’ rather than the shares themselves. In other words – instead of getting an amount of money back from your investment based on how much the value of the stocks rose or fell, you’re instead getting a pre-agreed amount of money if the stock meets certain criteria. No longer are there shades of grey, it is ‘binary’ in that you either get a pay out, or you don’t.
You do this by ‘calling’ and ‘putting’. Calling means that you estimate that the value of the stock is going to go up. As long as the stock is the same or higher than the ‘strike price’ you will receive a pre-agreed pay-out. If it’s not, then you don’t earn anything. A ‘put’ meanwhile is the right to sell an underlying commodity at strike price. What this means is that you’re predicting that the value of the share will fall and that you’ll thus be making a profit by selling it at that price.
Ultimately, you are predicting whether the value will go up or down by a certain set period and that is the only information you need to give. If you use binary options trading using an app then, this becomes as simple as just hitting ‘call’ or ‘put’ as each option is flashed up in front of you. That means you can make money very quickly and without needing to learn huge amounts of financial jargon!
Put it Together and What Do You Get?
With Binary Uno, it’s now actually possible to trade binary options using bitcoins. That means you can deposit bitcoins in your account and then trade on currencies, commodities and indices just as you would do with cash. This means you could make money from trading without having to spend any actual dollars – something that a lot of people would find very helpful. In the future, it could allow for completely automated ‘algo-businesses’ that would make money entirely via software.
At the same time though, Binary Uno also allows you to trade bitcoin options – in other words you can predict whether the value of bitcoin will go up or down. This is a fascinating option for those who like to stay up-to-date with the latest technologies and development and certainly shows just how much the web is changing our lives. For an age we’ve been trading on the value of national currencies but now for the very first time we’re trading on the value of an entirely digital trading system.