What are crypto exchanges? First of all, they are an important part of the world of cryptocurrency. Most crypto trading takes place through such platforms. They are not only places designed to trade digital assets, but also inform about the current exchange rate or volume. Therefore, it is worth knowing more about it.
Crypto exchange – what is it?
Crypto exchanges are a natural consequence of the crypto, which as assets need a place where their investors can trade or exchange them. On the cryptocurrency market, by far the largest volume of exchange occurs on such platforms.
It is on the exchanges that you can exchange FIAT currencies for crypto. The offers are different. On the CoinCasso platform you can buy Bitcoin, Ethereum or Tether. An alternative but much more expensive option for the exchanges is the crypto exchange.
Exchanges and their role in the market
The most important role of stock exchange is to provide market participants with a cryptocurrencies platform that enables them to buy and sell digital assets. Important in their functionality is the ability to view offers to buy and sell digital currencies. Therefore, each user can control their transactions and their quantity.
However, the function of the exchanges is not only based on crypto trading intermediation. Their role is much greater and has a big impact on the whole market. Currently, more and more entities are developing their platforms by adding various functionalities to them. Exchanges offer access to new tokens or cryptoes, and in addition, they can be used for IEOs – a fundraising system that works similarly to the standard ICO, but is carried out on the platform. Some companies also try to educate their users and their exchanges are educational in nature. Such solutions make the cryptocurrency exchange platforms suitable not only for advanced investors but also for beginner market participants.
Often companies release their own to tokens, which allows traders to reduce buying or selling commissions on the exchange. In addition, the number of platforms that issue their own stablecoins – crypto with a fixed rate, which are linked to the value of a specific FIAT currency – is growing.
Centralised or decentralised stock exchange?
Definitely, most of the stock exchange platforms are covertly based on the idea of centralised exchanges. This trend is slowly changing because the number of decentralized platforms is increasing as the market develops. It is worth noting that some centralised exchanges are also developing their decentralised counterparts. Nevertheless, decentralised stock exchanges are still only a kind of experiment.
The major advantages of centralised exchanges are greater liquidity, faster transactions and the possibility of multiple users operating simultaneously. Transactions are controlled by the stock exchange owner. This management system makes such trading platforms vulnerable to hacker attacks. Security in the world of cryptocurrencies is a priority, so decentralised exchanges have been established. This is what distinguishes decentralized platforms, which are designed to protect all user funds. Decentralized exchanges are not controlled by a single entity or company. However, the main problem with this type of solution is the relatively low blockchain speed. In addition, it is difficult to operate.
However, more and more platforms are trying to combine these two solutions. CoinCasso is one of the first hybrid stock exchanges in the world to use the functionality of both centralized and decentralized platforms. Therefore, it is worthwhile to follow how fast the crypto market is developing.
How to choose the exchange?
It is worth checking the costs of a given stock exchange, which are related to the commission charged and security issues. It is important that the platform contains elements that will help protect all user resources. That is why it is worthwhile to pay attention whether the exchange uses 2FA technology or KYC verification. The offer of available crypto pairs is important for all traders.
In stock exchange research it is worth to look at the entity behind a given platform. You can use social media for this purpose, because it is worthwhile to find out whether the persons managing the platform are open and whether they engage in the Internet, e.g. on Twitter or LinkedIn.
Nowadays crypto exchanges are much more important than you might think. The popularity of cryptocurrencies makes trading platforms more important. It is important to choose a crypto stock exchange based on your own preferences and the appropriate safeguards for your funds.