By: Favour Right.
Image credit: Google.
In this article about the best cryptocurrency exchange, I’m going to lead you to know the best one you can use to sell, buy and exchange your coins for profit, couldn’t you mind reading on?. I know you could.
These exchanges are mostly accepted worldwide and they are trustworthy.
Let’s dive in.
WHAT IS CRYPTOCURRENCY EXCHANGE.
A cryptocurrency exchange is a medium or platform in which buying, selling and trading of cryptocurrency assets are facilitated. cryptocurrency exchange stands as the middle man for the seller and buyer who used peer-to-peer options and also get a commission when trading using their platform.
Although cryptocurrency exchange is used to trade cryptocurrencies like Bitcoin and altcoin, it can also be used as the platform for trading fiat and digital currency while acting as an intermediary between a buyer and a seller and making money through commissions transactions fees.
when you are using a cryptocurrency exchange, you will be enabled to trade or exchange like $100 for Bitcoin of equivalent value and vice versa. also for Bitcoin of the equivalent value for Ethereum of equivalent value and vice versa.
This form of trading is not limited to Fiat – Bitcoin- Ethereum only, another cryptocurrency can also undergo the same exchanging or swapping if only the exchange platform has listed it on their platform.
However, cryptocurrency exchange offers high-risk trading like spot trade ( buying a coin or token at a lower price and selling it immediately at a higher price for the sake of profit-making), and future trade which is riskier than a spot trade.
Future trade is likely the same as spot trading but this one you don’t own any cryptocurrency any longer. you buy/long that is getting that the coin will go higher in price or you sell/short meaning that the coin will go down in price from the current value. this is risky because if you are not an expert at reading candle patterns and also good in technical analysis, you may likely be volatile which resulted in the loss of all your assets that you use to trade.
TYPES OF CRYPTOCURRENCY EXCHANGE.
There are two types of cryptocurrency exchange that you can use to sell, buy and trade your coins, Fiat or digital currency for profit.
1) CENTRALIZED EXCHANGE(CEX).
Centralized cryptocurrency exchange stands as the third party between the seller and buyer for a commission or fee. A centralized cryptocurrency exchange is owned and operated by a business company and the management help to increase reliability, user experience, user-friendliness and make trading easier for its users.
Most cryptocurrency traders make use of centralized exchange for trading and it accounts for more than 95% of daily cryptocurrency transactions.
MERITS OF CENTRALIZED CRYPTOCURRENCY EXCHANGE.
1) USER-FRIENDLY.
Beginners who are novices at the things of cryptocurrency or trading can use centralized cryptocurrency exchange to climb up the ladder of experience. centralized exchange offers beginners friendly tools for trading and investing in cryptocurrency.
As opposed to using crypto wallets and peer-to-peer trading which can be complex, users of centralized exchange can log into their account, view their account balance, and make transactions through applications and websites.
2) SAFE.
A centralized cryptocurrency exchange is safe for the trading of spots and futures and also the buying and selling of coins. users are restricted from doing wrong or scamming because the exchange company has set up rules and regulations for users.
DEMERITS OF CENTRALIZED CRYPTOCURRENCY EXCHANGE.
1) HACKING.
Centralized exchange used cloud computing to operate and it’s owned by companies that are responsible for the holding of their customers.
Hackers are targeting centralized exchange because they hold a large amount of Bitcoin and other altcoin assets.
2) GAS FEE.
One reason that centralized cryptocurrency exchange is a red flag for many users is because of its high transaction fee.
EXAMPLES OF CENTRALIZED CRYPTOCURRENCY EXCHANGE.
1) Binance
2)Huobi Global
3)Coinbase (Pro)
4)Bitfinex
5)Bitstamp
6)KuCoin
7)FTX
2) DECENTRALIZED CRYPTOCURRENCY EXCHANGE ( DEX).
A decentralized cryptocurrency exchange is likely the same as a centralized exchange but it doesn’t need a third party or an Intermediary system. This type of exchange is most secure than centralized exchange because it is built on blockchain but does not do with the transaction of Fiat for coins or vice versa.
MERITS OF DECENTRALIZED CRYPTOCURRENCY EXCHANGE.
1)MORE SECURE.
A decentralized cryptocurrency exchange is more secure than the other type of exchange since it’s built on blockchain technology.
Blockchain technology makes it difficult for the system to be open for hackers and traders prefer because of the security.
2) ANONYMOUS
Decentralized cryptocurrency exchange makes its users unknown and anonymous. Traders don’t need to undergo a KYC or any form of verification compared to a centralized exchange.
DEMERITS OF DECENTRALIZED CRYPTOCURRENCY EXCHANGE.
1) LACK OF GOOD USER EXPERIENCE.
Since traders did not verify their identity with the platform, it’s required that you own your keys or phase or you may lose your coins forever and they are not newbie-friendly.
2) NO TRADING OF FIAT.
Decentralized exchanges do not allow for the trading of fiat currencies for digital ones, making them less convenient for users that do not already hold cryptocurrencies.
TYPE OF DECENTRALIZED CRYPTOCURRENCY EXCHANGE.
1)Uniswap (V2)
2) Tokenlon
3) 0x Protocol
4) Venus
5)Sushiswap
6)1inch Exchange
7) PancakeSwap
CONCLUSION.
I hope that you have learned something or two from reading this article about cryptocurrency exchange and the different types of it.
Did you get value?.
Did you have one that you may add up to this article?.
Feel free to comment on the post.
