Cryptocurrencies are all the rage currently. But how do you buy and sell them? For that, there are platforms known as a crypto exchange. But there are several crypto exchanges out there, each with its special services and products. Of course, you can also find crypto exchanges that only sell and buy digital assets. Keep in mind your risk tolerance and financial goals when making the final decision on a crypto exchange. But here is a quick overview of the various types of crypto exchange.
Some security brokers who are not exactly cryptocurrency exchanges can be an intermediary between investors and cryptocurrency markets. Online brokers can be visited anytime. However, then you have to buy the cryptocurrencies at the price determined by the online broker.
Orthodox Cryptocurrency Exchange:
On these platforms, digital assets are bought and sold at the daily price of the market. However, fees are often charged for transactions. Some exchanges only deal with cryptocurrencies while others also let fiat currencies like the dollar be exchanged.
Centralized Crypto Exchange:
A third party known as the exchange operator looks after such exchanges. They ensure that trading and sign-up are smooth. It is easy and quick to have your debit card or bank account linked in such exchanges. However, this exchange operator comes with extra fees apart from the purchase of the asset. Several centralized exchanges let investors sell and buy digital assets using both crypto and fiat currencies.
Decentralized Crypto Exchange:
Cryptocurrency and blockchain had the main belief that no central authority should oversee the usage and movement of currency. DEX, or a decentralized cryptocurrency exchange, does not have any oversight by third parties. It also depends on trading between peers while being open source. Since a central server is absent, there is nothing that can be hacked. As a result, DEXs have better safety theoretically than centralized exchanges. However, it is not easily accessible by those who lack a moderate amount of technological skills. One must also know cryptocurrencies intimately to make proper use of them.
The Working Behind A Crypto Exchange
Cryptocurrency exchanges match sellers and buyers. Similar to a normal bank account, you have to register first before you can sell and buy on cryptocurrency exchanges. Once your KYC process has been completed and authentication has been done, your account will officially open. After that, funds (digital currency or fiat) can be transferred onto the exchange. These can be used for making purchases.
How To Choose The Crypto Exchange
All cryptocurrency exchanges, decentralized and otherwise, are quite new. The first one was the Bitcoin Market which started on 17th March 2010. So, always research thoroughly before choosing one. Cryptocurrencies have a volatile nature and several exchanges have fallen prey to hacking. So consider these factors when choosing it: Verification requirements; Reputation; Regional regulations and restrictions; payment methods; fees; and withdrawal/deposit limits.
As such, we would like to recommend YouHodler, an easy-to-use centralized crypto exchange. YouHodler crypto exchange staff has at least 15 years of expertise. Moreover, its crypto wallet is among the best in security using Ledger Vault. All customers are VIPs for the customer support as well, so you will never be lost.