If you are interested in reading Captain Altcoin’s review of Cex.io exchange, you need to know some necessary information on crypto trade. A cryptocurrency exchange is also known as digital currency exchange. It is the exchange of one cryptocurrency for another cryptocurrency or fiat currency. Cryptocurrency exchanges are online platforms on which these transactions can be carried out. Exchanges can be of two types: some people prefer traditional exchange modes of payments for cryptocurrency while others strictly operate online. They exchange digital currency and electronically transferred money. After the exchange, the transfer can be done directly to a user’s cryptocurrency wallet. There are about 250 listed cryptocurrency exchanges. Examples of the main exchanges include OKEX, HitBTC, and DigiFinex. Here are some basic terms that will help you understand cryptocurrency exchanges better.
Centralized Cryptocurrency Exchanges
These are online platforms used to buy and sell various types of cryptocurrencies. The term centralized is used because a third party is used to assist in carrying out transactions. Centralized exchanges charge a fee for every transaction and deal with exchange rates that are fixed depending on current cryptocurrency market prices. Most of the cryptocurrency trade is carried out on centralized exchanges mainly because there is a higher volume of trade on these platforms, and they also offer high liquidity.
Decentralized Cryptocurrency Exchanges
Decentralized exchanges omit the need of a middle man. They facilitate direct or peer-to-peer trading of cryptocurrencies. There are no fixed exchange rates, and this allows sellers to set their prices. Buyers then find sellers and a transaction is carried out. Many find them safer since they are less prone to security issues compared to centralized exchanges. However, they are considered much slower compared to centralized platforms and suffer low trading volumes.
Brokers facilitate the trade of cryptocurrencies at a certain price. This is usually a small fee above the market price. The exchange now involves three people: the buyer, the seller and the broker who is represented by an exchange website. They are easier to use and generally faster too. This is the reason the costs are a little bit higher than centralized exchanges. Examples include Coinbase.
Cryptocurrency is not considered as legal tender yet. Furthermore, clear rules and regulations regarding their use and transfer have not been established in all countries. Some countries view blockchain technology and cryptocurrency as a threat while others are determined to embrace it. Exchanges are bound to specific legal rules that protect the buyer and seller. They also have security measures that ensure the safety of transactions. As long as you are doing the right thing, and you are on a legalized exchange, then you should carry out your transaction without any problem.