In short, a crypto exchange is just simply a platform that allows you to purchase and sell different cryptocurrencies, these platforms also allow you to see the change of different cryptocurrency prices and to store the coins you just purchased.
You also have the ability to exchange/trade cryptocurrency’s with each other, for example you can convert Bitcoin to Ethereum and vice versa, although do note you may need to pay a mining fee and sometimes an exchange fee. Essentially it is similar to just converting normal currency like converting the US dollar to the Euro where a conversion fee is usually applied.
Different Types of Crypto Exchanges
Although you can purchase and sell cryptocurrency at most online platforms learning the type of crypto exchanges that are available will give you an idea on what type of exchange might work for you the best.
- Crypto Brokers – You can visit any online crypto broker if you want to buy a crypto asset, you will be purchasing the asset set by the brokers price. This is normally done when purchasing a large amount of crypto.
- Online Crypto Exchange – These are essentially just the online platforms that allow you to purchase and sell crypto, however when depositing or withdrawing money straight to your bank fees may apply
- Decentralized Crypto Exchanges – When crypto was first created the vision was that no authority like the government should be able to control or regulate the movement of how cryptos move. It is also open source for developers and others to create new technological changes as crypto starts to become adopted more. All this relies on is peer-to-peer trading and transaction which is harder to setup and requires more work for the exchange to setup.
- Centralized Crypto Exchanges – Unlike the decentralized system an exchange operator ensures that customers deposits and withdraws are going smoothly, this allows the trading eco system to run smoothly as you can easily add your bank details and start purchasing crypto within a few minutes. Do note that fees are usually added on as customers don’t need to worry about any setup as you’re just purchasing.
If you’re just purchasing crypto with the goal of growing your portfolio steadily the centralized Crypto Exchanges like Binance will be the best option for you, if you start buying a ton of crypto then going through a broker that has your best interests at heart will be the best for you. And if you want to remain anonymous or use cryptocurrency as it was intended than a decentralized exchange is the way to go for you.
What is The Signing up Process for Crypto Exchanges?
It is quite straightforward you sign up with you email, name, password and you are able to creatre an account however you will need to complete a verification process with you license if you do not want to be hit with any deposit or withdrawal limits.
When choosing a crypto exchange here are some quick things to look for:
- Associated fees with buying or selling crypto
- Types of payment methods to deposit crypto
- Types of Withdraw locations
- Reputation of the exchange
- Uptime of the exchange
There’s a lot of exchanges to choose from, choose the one that looks the best to you and remember to do your own due diligence before depositing any money to any of these exchanges.