What is exchange service?
A crypto exchange is a platform for buying and selling cryptocurrencies. In addition to trading services, crypto exchanges also offer price discovery through trading activity, as well as storage for crypto. Before crypto exchanges, people were only able to acquire crypto through mining or by organizing transactions in various online and offline forums. Today, there are hundreds of crypto exchanges offering an array of digital assets and varying levels of security and associated fees. It’s up to you to find the exchange and digital assets that suit your particular needs, price range, and security expectations.
How Crypto Exchanges Work
Crypto exchanges match buyers with sellers. As with a traditional bank account, if you want to buy and sell on most crypto exchanges, you first need to register. Once you complete the Know-Your-Customer (KYC) process and have been authenticated, your account is opened, and you can transfer funds (fiat or digital currency) onto the platform, which you can then use to make purchases.
Choosing a Crypto Exchange
Crypto exchanges, both centralized and decentralized, are relatively new (Bitcoin Market, started on March 17, 2010, was the first crypto exchange) so it's important to do research before picking one to use. Because cryptocurrencies are volatile and some crypto exchanges to date have succumbed to hacking, it’s critical to consider a variety of factors when selecting an exchange, including but not limited to:
- Deposit/withdrawal limits
- Payment methods
- Regional restrictions and regulations
- Verification requirements
It’s up to you to find the crypto exchange and digital assets that suit your particular needs, price range, tolerance for risk, and security expectations. It’s also important to be aware that some crypto exchanges are mobile-only, some require powerful, specialized computers, and that each has varying levels of security and associated fees.