What is Cryptocurrency Exchange

What is Cryptocurrency Exchange

What is Cryptocurrency Exchange

Schedule

  • Cryptocurrency Exchange - What is it?
  • How Cryptocurrency Exchange Work
  • Popular Cryptocurrency Exchange Platforms
  • Coinbase
  • Binance.US
  • Crypto.Com
  • KuCoin
  • Kraken
  • What to Consider When Choosing a Cryptocurrency Exchange Site
  • Fees
  • Security
  • Number of Cryptocurrencies
  • Availability of Trading Types
  • Liquidity
  • Easy to Use Website
  • Crypto Storage
  • Conclusion

The wide range of crypto coins and fluctuations in prices has contributed to the idea of cryptocurrency exchange. They are digital market platforms where you buy or trade various types of cryptocurrencies. Unlike FIAT currencies that can be exchanged in any bank, cryptocurrencies are traded on these websites. And this means that you need to create an account at a cryptocurrency trading site once you have decided which crypto coin you want to buy. This article provides more information about cryptocurrency exchange, how it works, and key factors to consider when sourcing for the best platform.

Cryptocurrency Exchange - What is it?

A cryptocurrency exchange is a platform designed to allow the trading of traditional FIAT with digital cryptocurrencies. Basically, they act as intermediaries between buyers and sellers at a commission. And the reason why so many people are shifting to cryptocurrency exchange is that they offer anonymous transactions. Moreover, these platforms employ the latest encryption (cryptography) to ensure that all transactions are safe. Finally, please note that a cryptocurrency exchange can be an online platform that trades transferred money and modern currencies or a land-based shop that trades digital and FIAT currencies.

How Cryptocurrency Exchange Work

As earlier mentioned, cryptocurrency exchange platforms act as intermediaries between a buyer and a seller. They work by providing a portal that allows not just to trade but also to speculate crypto prices. A crypto trading platform can be centralized or decentralized. The difference between them is that a centralized exchange platform is under the management of one corporation, while a decentralized platform allows users to join a network and certify transactions. In the latter case, the crypto exchange platform helps in accountability and transparency.

Popular Cryptocurrency Exchange Platforms

The internet is flooded with many crypto exchange platforms. We’ve saved you the time of testing each one of them by bringing you the most reputable sites in the market. Please make sure that these exchange platforms are legal in your region before you start using them. They include:

Coinbase

Key Features
Beginner-friendly and easy trading process;
Five-star reviews and security rating;
The education program rewards free cryptocurrencies
Offers 60-odd tradable cryptocurrencies

Binance.US

Key Features
Relatively low trading and spot costs
Massive selection of crypto coins
Highly secured with the latest technologies

Crypto.Com

Key Features
Offer discounts on trading fees and exclusive benefits
Users enjoy limited margin trading
Has a high cybersecurity rating
More than 70 crypto coins to choose from

KuCoin

Key Features
Low fee on a wide range of cryptos
Reduces trading fee by 20%
Features automated and margin-based trading features

Kraken

Key Features
Supports more than 50 cryptocurrencies
Has advanced trading features like margin
Enjoys high cybersecurity rating
Excellent customer support service

What to Consider When Choosing a Cryptocurrency Exchange Site

Picking the best crypto exchange platform can be a challenging process, especially if you are a beginner. Several important features must be put into consideration, including fees, security and others. Let’s find other important factors that you must keep in mind:

Fees

The Crypto exchange fee is the first thing you should consider. Platforms that offer easier means of trading often offer higher trading fees. Some exchange platforms have fixed fees, while others are the percentage of your trade.

Security

Hackers have become a nightmare to cryptocurrency exchange operators. Make sure you pick a trading site that uses cryptography technology and other advanced security systems.

Number of Cryptocurrencies

Consider the number of crypto coins you can trade on the platform. We recommend choosing a site with a wide selection of cryptocurrencies like Bitcoin, Ethereum, Litecoin, Altcoin and others.

Availability of Trading Types

A good website should offer advanced customers different trading types such as limited orders that help in stopping slippage when it sets a hard price.

Liquidity

The platform you select allows customers to sell their holdings whenever they want. Platforms with large trade volumes offer the best liquidity. The best exchange platforms with high trade volume are Binance and Coinbase.

Easy to Use Website

If you are a newbie, you should consider a platform with an easy to use interface. Moreover, the website should have educational tools to help you get started without any difficulty.

Crypto Storage

Many beginners prefer exchange platforms that allow you to store your crypto in your online account. On the other hand, advanced traders go for platforms that allow them to keep funds in their wallets. This has been caused by the increased hacking cases in the past.

Conclusion

Cryptocurrencies have proven to be more secure, fast and efficient compared to traditional fiat currencies. The availability of exchange platforms has made it simple for people to transfer, store and convert their cryptocurrencies. As we have highlighted, you must keep in mind several elements when sourcing for a crypto exchange platform, including fee, variety, and safety.

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