Help You to Learn More about the Cryptocurrency Exchange
Cryptocurrencies and the technology they’re built on are transforming our world today. Cryptocurrency exchanges are an important part. However; many people still don’t understand exactly how they work. Or even how traders are making money from them. So just what is an exchange and why are they important?
Here’s an informative take on the subject from our friends at Cryptocurrencyfacts.com:
There are general there are the following types of exchanges:
NOTE: The terms used below are somewhat semantical. The important thing to note is the different styles of exchange, not the exact words used to describe them.
1. “Traditional” Cryptocurrency Exchanges: These are the exchanges that are like the traditional stock exchanges where buyers and sellers trade based on the current market price of cryptocurrencies (with the exchange playing the middle-man). These type of trading platforms generally charge a fee for each transaction. Some of these types of exchanges deal only in cryptocurrency, others allow users to trade fiat currencies like the U.S. dollar for cryptocurrencies like Bitcoin. Coinbase’s GDAX is an example of this type of exchange, as is Kraken. Of exchanges, there are those run by third parties (they have a middle man who can do support and correct some problems) and decentralized exchanges and peer-to-peer exchanges (exchanges without a middleman). EtherDelta is an example of this type of peer-to-peer exchange.
2. Cryptocurrency Brokers: These are website-based exchanges that are like the currency exchange at an airport. They allow customers to buy and sell cryptocurrencies at a price set by the broker (generally at the market price plus a small premium). Coinbase is an example of this type of exchange. Shapeshift provides a similar service as well (it lets you swap on type of token for another). This is the simplest solution for new users, since it is simple and easy, you’ll pay slightly higher prices than you do on the exchanges.