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Cryptocurrencies can be independently excavated, obtained for free in airdrop or giveaway, buy from a miner or a person you know personally or from a type broker Cantor. However, most often cryptocurrencies are bought on stock exchanges. Cryptocurrency market this is the basic place of trading them. It is also there that their prices are determined.
The article is a fragment free training - Cryptocurrencies - how to start and survive? A course for everyone!
Cryptocurrency exchange - what is it?
The stock market is cryptocurrency trading platformTrading operating without brokers. We individually issue an offer to sell / buy a given cryptocurrency or we can use the offer / sale offer issued by another investor. In this way the stock exchange connects those who want a given value in a given number and price to sell with those who want to buy it. Our funds go to the seller, and its cryptocurrencies to our stock exchange account.
Cryptocurrency market, unlike traditional exchanges, 24 operates an hour a day, 7 days a week. Creating an account on it is very easy and it is like setting up a facebook or e-mail account. Anyone, from the position of a home chair, can invest in any cryptocurrency listed on any stock exchange in the world. In this way, we can invest in a Singaporean start-up or an American project ... in a few simple clicks. We can transfer the purchased cryptocurrencies and sell them on any exchangeon which they are listed at any time, regardless of public holiday and time in the time zone. It is a global, pro-investor market. It opens up investment opportunities for ordinary people who - due to the degree of hermeticity or the level of the entry threshold - have not invested in traditional stocks or other securities so far.
Cryptocurrency exchange - types
Cryptocurrency exchanges can be divided into those which they support traditional currencies like the dollar, euro, Polish zloty, and stock exchanges allowing only for the crypto-crypto trade.
The first type of cryptocurrency market operates in accordance with international regulations on counteracting money laundering and financing of terrorism. After creating an account, it requires verification the user, usually by providing personal information about the account holder, sending a scan of his documents, and taking a selfie. Then the user of such an exchange can make a bank transfer or use a payment card to fund his account. Then he can buy cryptocurrencies and trade on the stock exchange. The recommended exchanges are American Coinbase, Polish Bitbay and/ or Coindeal.
The second most common type of cryptocurrency market allows you to set up an anonymous account. However, you can not top it with dollars or zlotys. Overflows with bitcoin, ethereum or other cryptocurrency, and then buy the selected other altcoiny. It also trades in pairs with stable coins that replace dollars (e.g. TUSD). The recommended stock exchanges of this type are Binance and Huobi.
In addition, the cryptocurrency exchanges are divided into CEX and DEX. CEX are centralized stock exchanges, while DEX are decentralized exchanges
Centralized cryptocurrency exchange - CEX
The most popular are centralized stock exchanges. The company opens a trading platform. We deposit our money there fiat and / or cryptocurrencies. They are stored on wallets and stock accounts, which creates a danger for our funds.
As shown by numerous examples, cryptocurrency exchanges they are exposed to numerous hacker attacksmany of which have succeeded. Client funds are deducted. The losses of the stock exchange reach even several hundred million dollars. these attacks can bring the stock exchange into bankruptcyand stolen funds may never be returned to its clients.
Regardless of the hacker attack, each cryptocurrency exchange may go bankrupt. No solvency the stock exchange also results in the inability to accumulate funds on such an exchange. Besides, the stock exchange may turn out to be a scam. The stock exchange website may just stop working one day… and that's how we saw our funds. All of this is possible in an unregulated wild cryptocurrency market.
Except that, an exchange owner may suspend our account or freeze funds. By using such an exchange, we are at the mercy of the management. The centralized cryptocurrency exchange may also have technical problems or problems with the operation of servers in the conditions of high user activity. It happens that the trading platform has many hours of inactivity or hangs up during high price movements of cryptocurrencies. Prices will go down, and you will not be able to log in to the stock exchange due to overloading servers.
Centralized cryptocurrency market has many advantages. Using it is very convenient and the turnover is large, which favors trade flow and causes low spreads. No wonder that most investors currently use this type of stock exchange. These types of exchanges are also the largest and they are the largest.
Thus, using the CEX exchange, let's try not to keep our money on them (in cryptocurrencies and fiats) at a time when we do not intend to use a given exchange. Our funds will be much safer as stable coiny and cryptocurrencies on our own portfolio, to which we have private keys. As always, the most recommended are hardware and paper portfolios.
Decentralized cryptocurrency exchange - DEX
The decentralized cryptocurrency market is based on blockchain technology. This is the most common application written on a smart platform adapted for this purpose, such as Ethereum. There is no institution to entrust here. The transaction takes place in a blockchain network, not on a platform stored on any server dependent on someone. Trading on such a stock exchange, we exchange cryptocurrencies with our contractor. For example, we buy a token by paying ETH. ETH from our portfolio goes to the wallet of our partner, and the token from his wallet to ours.
Such exchanges have been functioning for some time, but still they have not gained the investors' interest.
Examples of such exchanges are new Binance DEX and IDEX.
The best cryptocurrency exchanges - opinions
Like cryptocurrencies, the cryptocurrency market can be ranked in rankingu. The criterion for such a classification may be the number of trading pairs, the type of exchange or simply the volume of the daily turnover.
Unfortunately, in order to promote and encourage investors to trade, exchanges often lie to the size of the registered turnover or manipulate it using bots. It is supposed to give the impression of greater liquidity and greater prestige of a given exchange.
In recent months, institutions monitoring traffic in the blockchain network and real trading on cryptocurrency exchanges have been established. According to numerous observations, the largest crypto-currency exchanges belong to the largest stock exchanges:
Binance - considered by many to be the best stock exchange in the world; offers many attractive currency pairs, low commissions, very high liquidity, attractive interface and good customer service; does not require account verification; according to the trading volume, it is by far the largest stock exchange in the world;
How to set up an account and trade on Binance? See our comprehensive guide
Coinbase - one of the oldesta fully regulated US cryptocurrency exchange; ranks second in the world in terms of trading volume; it offers little altcoinów, but it gives you the option to buy bitcoin or ethereum for euro, including card payment;
How easy to buy your first bitcoin on Coinbase and get cryptocurrencies for free? See our guide
Upbit - a cryptocurrency exchange aimed mainly at investors from South Korea
Bitfinex - a cryptocurrency exchange related to the USDT stable coin, having problems with American law; accused of lack of audits and reprinting of tether, as well as problems with payment of funds;
OKEx - formerly aimed mainly at Chinese investors; currently incorporated in Belize; most of the volume is studded with artificial, lack of liquidity in the altcoin market;
Creak - Coinbase equivalent with a slightly smaller turnover;
Liquid - cryptocurrency exchanges targeted at players from Japan
HitBTC - has many interesting altcoins on offer, but is famous for very high fees for withdrawing cryptocurrencies and for users' accounts frozen for many weeks under the pretext of having to verify the origin of funds
KuCoin - altcoin exchange, created in the likeness of Binance; lower turnover than on Binance, but many interesting cryptocurrency pairs;
Bitstamp - an equivalent of Coinbase and Kraken
Huobi - relatively high turnover and selection of altcoins, friendly and professional interface;
BitBay - much smaller volume of trading than in the case of the aforementioned competition, but it is the largest exchange offering the purchase of many cryptocurrencies for PLN, a convenient way to deposit and withdraw funds; see our guide on how to do it
On what stock exchange to buy a given cryptocurrency?
This type of information can sometimes be found on the official website of a given cryptocurrency project. However, the choice of exchanges can be large, so it is worth checking what options we have and which are the most convenient for us.
We are entering the site CoinMarketCap and we search for the cryptocurrency that interests us.
We go to the Markets tab. There you will find information on what exchanges and in which currency pairs you can buy a given cryptocurrency. Pairs are ranked by trading volume for the last 24 hours. In the case of lesser-known exchanges, it should be borne in mind that these figures may be heavily inflated.
