At present, the market cap of crypto currency is over 1 trillion dollars. There are more than 300 million crypto users in the world. Only from USA its number about more than 15 million, and it is continuously increasing. if you also want to become a new investor of crypto currency, or want to trade crypto, then first of all, get to know about what is crypto exchange and how it works?
What is crypo exchange?
Crypto exchange is an online business, in which you can buy all types of cryptocurrency with fiat money (paper currency), and then you can resell the same cryptocurrency and convert it into paper currency. This exchange company works like a brokerage. It charges a few percentages (around0.1%) as commission on each of your transactions. In the USA, you can do a crypto exchange with the help of net banking.
Types of Crypto Exchanges
There are mainly three types of crypto exchanges, in which you have been provided with the facility to trade differently.
1.Centralized Crypto Exchange CEX
It is like a traditional stock exchange. In this buyer and seller come together, but the deal between the two is done by the third person. Here centralized means that you are giving the control of your money in the hands of some third. In simple language, if you want to buy any crypto currency here, then first you have to deposit the money with the broker. After that he will contact any other seller who will be selling crypto currency of the same value at present. All CEXs work like this. Transactions in this are quite unsafe. But it provides you a good platform for trading. Names of some centralized crypto exchanges are as follows
2.Decentralized Crypto Exchange DEX
This exchange is completely different from the first exchange CEX. In this you do not need any broker. In this, all the transactions take place between the buyer and the seller. For example, if you want to buy crypto currency in it, then you can buy directly from any other seller. It is quite safe for exchange trade. There is no broker fee to be paid here. But its user interface is not that great. Some decentralized crypto exchanges are like this,
- WAVES DEX
- BISQ DEX
3.Hybrid Crypto Exchange HEX
It is going to be the best crypto exchange of the future. Here you can trade crypto currency in both the ways. With its help, you can buy crypto currency with the help of a broker or you can directly contact with any seller. This exchange also provides security along with excellent trade facility. Some hybrid crypto exchanges are QRREX, Binance etc.
Choosing a Crypto Exchange
By now we have understood almost all the terms of crypto exchange. But now the question will definitely be here that how to choose it and who is the best crypto exchange. There are a few things we need to keep in mind before selecting any crypto exchange.
- Choose a crypto exchange that provides you with the facility of a mobile app. With its help, you can trade from anywhere.
- Before the election, definitely check the crypto currency in which you want to trade.
- What are the most reliable crypto exchanges out there? He definitely demands kyc from you, so keep this thing in mind while choosing.
- Before making a choice, do research about that exchange company and choose a good user rating as well.
- For security, major crypto exchanges keep all user funds on hold in cold storage. So that he can save her from the hacker.
- While selecting a crypto exchange, be sure to check about its payment method, security, fees, customer support.