If you are an individual and if your desire is to own cryptocurrency, there are two methods. Either mining or purchasing using fiat currencies. If you are an individual, it is preferable to use the second method; purchasing crypto assets with your fiat currency. However, this expectation can be fulfilled with standard payment methods such as bank transfers, credit cards, or PayPal. Otherwise, it is easy to purchase cryptocurrency from a cryptocurrency exchange.
What is a Cryptocurre Exchange?
A crypto exchange is a platform that facilitates crypto trading. It enables users to trade cryptocurrency with other assets such as fiat and digital currencies. In simple terms, crypto exchanges act as an intermediary who makes commission and trading fees. For instance, a user is capable of trading bitcoins from US dollars or vice-versa. Otherwise, the user can trade any other cryptocurrency such as Ethereum with Bitcoin. According to the nature of the exchanges, they can be either centralized or decentralized.
Most of the cryptocurrency exchanges in use are centralized exchanges. These kinds of exchanges act as a middleman between the buyer and seller. Coinbase, Gemini, Kraken are some famous and well-known exchanges. Because of their centralized nature, they are more reliable. One of its top advantages is its user-friendliness. The trading can be done easily by logging into their accounts which are created under the exchange platform. However, these types of exchanges are disclosed to hacking threats and they also have a higher transaction fee.
Decentralized cryptocurrency exchanges, which are often known as DEXes, operate P2P transactions without the involvement of a third party. Because there is no middleman, it has the ability to mitigate hacking threats to a significant level and the anonymity is high. However, DEXes does not support the users to exchange fiat currency with cryptocurrency. Furthermore, it suffers from high complexity and liquidity. AirSwap, Blocknet, and Barterdex are some better examples of decentralized cryptocurrency exchanges.
- The above discussion is neither financial advice nor financial recommendation. It is a basic study on cryptocurrency which is done based on resource sources. Therefore, our team accepts no responsibility or liability for any predictions/decisions you make in the industry.