What Are Crypto Exchanges and How To Use One? – LIFESTYLE BY PS icon

What Are Crypto Exchanges and How To Use One?

For the people who are not educated or not knowledgeable enough on cryptocurrency, learning about crypto exchange platforms is vital. 

Crypto exchange includes online website services where you can store your cryptocurrency. You can also use it to transfer your non-digital currency or traditional money to buy in or sell different cryptocurrencies. Of course, you can also exchange numerous kinds of cryptocurrency on an exchange. 

To understand this and to know more about how it works, let us define and see the kinds of exchanges that are going on in the market today.

Forms of exchanges  

What you may be familiar with is the traditional form of exchange which is the stock exchange, wherein they use a centralized middleman to help buyers and sellers conduct their transactions and handle their assets.  

  • Centralized Exchange 

The same is true when dealing with digital currency. They have centralized exchanges that act as intermediaries during trades and most often act as your custodians where they store and protect your funds.

  • Decentralized Exchange 

The other type is a decentralized exchange which is the trademark for cryptocurrency. This is much more preferred by buyers nowadays because they do not have to deal with any third party and any commissions fee. This is also preferred because of its transparency through a peer-to-peer approach.

  • Hybrid Exchange 

The next form is called Hybrid Exchange where it is the combination of centralized and decentralized exchanges which offers faster transaction and can provide real-time service access.

Using crypto exchanges 

Dealing with crypto exchange is more or less like dealing or using an online brokerage where you have to deposit or cash in paper money to buy or purchase digital currency. One of the first things to do before entering into an exchange is to have a digital wallet where users can deposit their digital coins. It can be in the form of a cold wallet or cold storage and hot wallet which is connected to the internet. Since exchanges are and can be made through the use of trading arenas or trading platforms, the next step that you should do is to look for a reliable trading platform. 

Trading Platforms 

Look for signs of legitimacy like an associated physical address to avoid falling into fraud and scams. Cryptoner, a trusted crypto site that publishes guides and news, advises crypto users to choose a platform with at least a two-step verification process. Aside from that, a user-friendly application will help the users who are just beginning to trade in cryptocurrencies not get confused. 

You should also look for a platform that offers a wide variety of cryptocurrencies that you can choose from. Also, in other countries, certain fees may apply for many platforms, especially if you are converting cryptocurrency to another cryptocurrency. 

Final Words 

No matter what type of exchange you enter into, it is important to note and look at how well that platform is going to protect your interests, and by this, we mean your investment. Since it is your fund that is at stake here, it is also a best practice to be educated well on the exchange that you choose. It does not matter if it takes you hours just choosing the right fit for you as long as you feel safe once you begin your crypto transactions.