Understanding a Cryptocurrency exchange
- What is a cryptocurrency Exchange
- Types of Crypto Exchanges
A platform where investors or customers can buy, sell and trade in digital currencies such as bitcoin, ethereum, dogecoin,litecoin and many more are called crypto exchanges. In recent times the sudden spike in cryptocurrencies investment around the globe, the first question that comes to everyone’s minds is where to buy, sell and trade ? The answer to this is Cryptocurrency exchange. A good exchange makes it easy for investors to buy and sell cryptocurrencies with features such as security and low trading fees..
With cryptocurrencies being the hot and trending topic for quite some time and with the number of digital currencies and newly formed exchanges coming into the market, it is difficult for the customers or investors to choose the best for them.
EXPLAINING A CRYPTOCURRENCY EXCHANGE AND ITS TYPE
For every investor or customer who wants to trade in cryptocurrencies, a cryptocurrency exchange is required. To be more specific above which exchange is best for investors, one needs to know about how the crypto exchanges work.
The crypto exchanges are then categorized into two categories:
- Centralized Crypto Exchange
- Decentralized Crypto Exchange
Centralized Crypto Exchange – In centralized crypto exchanges the transaction is monitored and secured by third parties on customer’s behalf. These transactions are not trackable by the blockchain system. The user or customer information is verified by these exchanges before they use the services.
Decentralized Crypto Exchange– A decentralized crypto exchange (DEX) is not much different from a centralized crypto exchange. The thing which makes DEX different is, it functions without third-party intervention. They do not rely on any third party tool. The data is stored on the blockchain.
With numerous crypto exchanges developing, it becomes very tough to settle on the proper one. However, the customer should be extremely careful concerning which exchange they are selecting. One should take care concerning the options, client service provided, and whether or not the cryptocurrency they’re inquisitive about is offered at the actual exchange or not. These factors must be considered in selecting a crypto exchange for yourself.
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Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investmenting.
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