Before we begin, let’s review the basics:A cryptocurrency exchange is a website that allows an individual to buy, sell or exchange cryptocurrencies for other digital currency or conventional currency like US dollars or Euro. If you are looking to trade professionally and have access to a number of trading tools, you will likely be required to use an exchange that asks for you to verify your ID and open an account. However, if you are looking to make the occasional trade, there are platforms that you can use that do not require you to open up an account.
What are the 3 types of exchanges?
- Brokers: These are websites that anyone can visit to purchase cryptocurrencies at a designated price set by the broker.
- Direct Trading: These platforms offer person to person trading. What does this mean? An individual will be able to exchange currencies with people from different counties. Keep in mind direct trading exchanges do not have a fixed market price; each seller decides what their own exchange rate will be.
- Trading Platforms: These are websites that link buyers and sellers to one another and take a fee for each transaction
What should you look for before joining a cryptocurrency exchange?Similar to most things, it is crucial that you do a little research before you start trading on an exchange. Here are a few things you should check out before diving into the world of cryptocurrency trading.
- Fees: Generally speaking, most exchanges have fee-related information available on their websites. Before one joins the site, make you sure feel comfortable dealing with transaction, deposit, and withdrawal fees.
- Reputation: If you want to learn more about a particular exchange, the best way to search through reviews from individual users as well as trustworthy industry websites.
- Payment: Different exchanges will ask for different methods of payment. For instance, some offer credit & debit card payment options, while others offer PayPal and wire transfers.
The Top 7 Cryptocurrency Exchange Sites in the World