Everything You Need to Know About Crypto Exchanges

Crypto Exchange

In simplest terms, a crypto exchange is a platform where traders can buy, sell and even convert their investments into different cryptocurrencies. Today, the scale at what the cryptocurrencies are, crypto exchanges have become a staunch part of popular culture. While some exchanges offer transactions at higher speeds, others offer amazing prices and specialised products.

Such platforms actively work as an intermediary between the buyers and sellers, thus enabling people to earn commissions and pay the transaction fees. Let’s suppose if you have to exchange $100 for a Bitcoin of the equivalent value, you can do it with a well-rated crypto exchange platform. The same applies to the assets that are traded on the platform.

Centralised Vs. Decentralised Exchanges

A centralised cryptocurrency exchange works as a third party between the buyer and seller. And, since they are being operated by a company, you can rest assured about the veracity of the exchanges. Around 99% of all crypto transactions go through a centralised exchange. For instance, if you have heard of Coin Culture – Best Crypto Exchange in Australia, you will know it is a centralised platform and the first choice for many cryptocurrency investors. Here are a few examples of cryptocurrency exchanges that you must know:

  • Kraken
  • GDAX
  • Coinbase
  • Gemini

On the contrary, decentralised cryptocurrency exchange enables the users to sift through peer-to-peer transactions. This means they don’t need a third party or an intermediary to record the transaction. And due to some major issues associated with centralised exchanges, some users prefer decentralised exchanges. However, one must know that the decentralised exchanges do not endorse the trading of fiat currencies, which have become a staunch part of the culture. Here are a few examples of decentralised cryptocurrency exchanges:

  • Io
  • Blocknet
  • AirSwap
  • Barterdex

What Are The Benefits of Centralised Cryptocurrency Exchanges?

●      User Friendly

Centralised exchanges offer beginners easy ways to invest in this currency. Therefore, making the overall experience friendly and versatile. On the contrary, when you use crypto wallets, the process can be complex and hard to understand. And very often, investors complain about having difficulty checking out their account balances.

●      Reliable

With centralised exchanges, you have an additional layer of security and reliability. Especially when trading and transactions are concerned, you don’t have to worry about anything. And one is exposed to a high level of comfort that is seldom a part of the industry.

What Are The Disadvantages of Centralised Cryptocurrency Exchanges?

●      Hacking Risk

A centralised exchange is held by a company that will be held responsible for the customer’s holdings. After all, the large exchanges can hold as much as billions of dollars, thus, making them the first hit for the hackers. If you have heard of Mt. Gox, you must have heard that they had a theft incident of 850000 Bitcoins that led to immediate suspension.

●      Transaction Fees

Unlike peer to peer transactions, a centralised exchange entails a high transaction fee for its service and convenience. This can be very high if the trading volume is highly liquid.

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