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Cryptocurrency exchange is a platform where you can buy and sell crypto for fiat currency (regular money) or another virtual currency. The function of the exchange is not limited to exchanging money for cryptocurrency , popular and large trading platforms offer a wide range of functionality. On exchanges, you can put virtual assets on deposit, earning interest, lend crypto to lending , earn money on arbitrage (trade at several rates at once, earning profit from the difference in the price of the asset), transfer crypto to other wallets.
How does the exchange differ from the exchange ?
A cryptocurrency exchange has a number of fundamental differences from an exchange . The main one of them is the course. The exchange has a fixed exchange rate that is set daily. The price of the asset on the crypto exchange is set by the participants of the transactions themselves. Using the services of the exchanger , you purchase a digital asset from the exchanger , on the crypto exchange you interact with other investors and traders, buying or selling the asset, as in the marketplace . Purchase or sale offers after their creation fall into the “glass” (a list of proposed deals), and the user can choose a suitable deal.
The exchanger earns on the exchange rate difference, and also charges users commissions for services. Cryptocurrency the exchanger buys on various platforms in order to sell to customers at a higher price. The exchange earns commissions from transactions, the exchange of assets takes place between users of the platform, and the platform only acts as an intermediary.
Centralized and decentralized exchanges
When deciding which cryptocurrency exchange to choose , you need to understand their differences. There are centralized and decentralized platforms. Centralized exchanges have access to user funds, their structure resembles traditional banks. To start trading on the centralized crypto exchange , the user must make a deposit from a bank card or through a payment system. The feature and advantage of centralized crypto exchanges is the ability to buy virtual currency for fiat , that is, ordinary money. Cryptocurrencies are exchanged on decentralized platforms .
Users of centralized exchanges undergo verification and must provide their personal data to the platform. The most popular centralized exchange is Binance , it is easy and convenient to use, offers many functions and options for earning.
Cryptocurrency is exchanged between users on decentralized exchanges . The exchange is carried out at the expense of a smart contract – this is a special blockchain program that guarantees the security of the transaction. Users of decentralized exchanges do not need to make a deposit in advance, it is enough to link their cryptocurrency wallet and exchange crypto directly. The feature of smart contracts allows the exchange of virtual currency only within one blockchain chain. This means that you cannot exchange Bitcoin for Ethereum , as these cryptocurrencies are created in different blockchains . Most decentralized platforms work on the Ethereum blockchain .
to choose for cryptocurrency trading, pay attention to the availability of technical support. Decentralized exchanges do not have technical support for users, but only communities. If a problem occurs, users cannot ask for help from stock exchange specialists, only community members will help them solve the problem .
What cryptocurrency exchange choose a newbie?
Choose a cryptocurrency exchange based on reviews , the number of audiences, and reputation. Large trading platforms are more reliable and safer, offer a wide range of functions and advantageous conditions.
When choosing a cryptocurrency exchange , pay attention to the following criteria:
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the size of the commission for services;
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the size of the minimum deposit and the amount for withdrawal;
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the need for verification after account registration;
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a set of tools for analyzing and creating profitable deals;
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popularity, community size;
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reputation
It is important not only to register on a reliable platform, but also to learn how to trade crypto effectively, making an investment portfolio correctly. Take a training course in Crypto Crew and join our community to develop your trading skills ! We will tell you which exchange to choose for cryptocurrency in 2022 in order to successfully start trading .
Author: admin_cryptocrew
