What is Cryptocurrency Exchange
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Cryptocurrency exchange is a platform where you can buy and sell cryptocurrencies in exchange for fiat money or other cryptocurrencies.
In simple words, crypto exchanges provide service for buying, selling and exchanging cryptocurrencies.
The world of crypto exchanges is extremely exciting, million of transitions are happening each day. people buying, selling and exchanging cryptocurrencies either for fiat money or for other cryptocurrenies.
If you are interested to invest in cryptos, you should have some information about exchanges so you will not waste your time on the wrong exchange.
What You Should Know About Cryptocurrency Exchanges
- Fiat to Crypto: This type of exchange service helps you to buy cryptocurrencies in exchange for Fiat money ex: Dollars, Euros, Pounds, Yen etc. You can use your credit card, debit card, online banking system or any other method of payment to buy crypto on this type of exchanges. Coinbase is one example of this type of exchange. You can buy BTC, BCH, LTC and ETH and many more currencies in coinbase exchange.
- Crypto to Crypto: This type of exchange service helps you to exchange cryptocurrencies like BTC, ETH, BCH with other cryptocurrencies. This service is for the people who already have one type of cryptocurreny and want exchange to another type ex: bitcoin to ethereum. Biannace is one of the famous examples of crypto-to-crypto exchange.
- Methods of Payment: Not all the cryptocurrencies exchanges accept all type of payment methods. you should check on the exchange website what type payment methods they are accepting. payment methods may include credit cards, debit cards, cash, PayPal etc.
- Crypto Pairs: As all the exchange don't accept all type of payment methods, the same way all the exchange don't list all type of cryptocurrencies in their exchanges. You should check if the crypto you are wishing to buy has listed in the exchange.
Type of Cryptocurrency Exchanges
1. Centralized Cryptocurrency Exchange (CEX)This type of crypto exchange plays the role of middleman between buyer and seller. It run by a central organization, which provides services to buy and sell cryptocurrency either fiat-to-crypto or crypto-to-crypto. The exchange will charge you a certain amount of fees on any transaction you make. If you want to know the step by step process how to use centralized exchange to buy crypto you can check How to Buy Cryptocurrency Through Exchange .
How a Centralized Crypto Exchange Works?
- You deposit some amount in your crypto exchange account.
- The exchange holds your money like a bank or trusted middleman.
- You search and watch the prices of the available cryptocurrencies.
- You select the cryptocurrency you want to buy.
- You put the amount how much you want to buy.
- You place the order.
- And that’s! The cryptocurrency will be transferred to your crypto wallet