What is crypto exchange?
Crypto exchange is a trading platform where you buy, sell and exchange cryptocurrencies. The most common way to buy crypto is by using online exchanges. Online exchanges enables you to trade fiat currency to/ from crypto currency or one crypto currency for another.
How do I registering with an exchange?
In order to use an exchange you would need to register and open a personal account and go through the verification process. The wallet provided by an exchange is used to receive and send your coins. On the exchange wallet you don’t have your private key. If anything happens with this exchange your account you will not be able to get to your assets and you might lose everything. Therefore it is smart to immediately transfer coins out of your exchange-provided wallet and into a more secure wallet that you own.
The 3 different types of exchanges
While each has its own method of doing things, exchanges generally fall into one of three different categories:
These exchanges have the most in common with regular currency exchanges. They provide a fixed price for the currencies that they trade in and they guarantee that your order will go through. They are the simplest to use but often have the highest fees.
Similar to Forex trading platforms, these exchanges allow users to buy and sell currencies from and to each other. They also usually have charting software, to assist users in better analyzing the history of the price of a coin, and to help predict where it’s going to go. The price of the coin is set by the market. Trading platforms usually have lower fees.
Acting almost like middlemen, these exchanges allow users to trade currencies but, unlike trading platforms, the users set their own prices and do not have a fixed market rate.
How to chose an exchange?
There are many different exchanges to choose from. Some might not be available in your country. Exchanges sometimes have purchase limits. It’s always important to keep your goals in mind when choosing an exchange. Exchanges accept all sorts of payment methods, from credit and debit cards to bank transfers, but not all exchanges accept all the various payment options.
How much it cost to trade on an exchange?
For every trade exchanges charges you a transaction fee. Transaction fees vary from exchange to exchange. It’s important that you read through and understand how much money you’ll be charged when you deposit, withdraw and exchange. At certain times the price difference can be huge. Buying asset cheep on one exchange and selling it on other is called arbitrage trading. Eventually the price evens out.