What is a cryptocurrency exchange
In order to be part of the new digital economy, you need a cryptocurrency exchange. Find out what it is, how they work, the types there are and how to choose the best one according to your needs.
What is a crypto exchange?
An exchange is a clearinghouse where users can exchange one currency for another. The most common example is the places where you exchange one currency (such as the Mexican peso) for another (US dollar, euro, etc.). Within the crypto world, this is no different.
A cryptocurrency exchange is just that, an exchange center where you can exchange fiat money for Crypto. In other words, it is an online exchange where you can get Bitcoin, Ethereum or MMXN in exchange for physical money.
Cryptocurrency exchanges are a relatively new thing, but they have evolved at a fast pace. After Bitcoin officially appeared in January 2009, the first known exchange was developed: Bitcoinmarket.
From here (and after the Bitcoinmarket hack), other crypto exchanges began to appear ,developing little by little until they became what they are today.
How cryptocurrency exchanges work
Cryptocurrency exchanges work in a very similar way to the physical exchange houses that you can find in any airport. These are its main features:
- Exchanges allow you to buy crypto with fiat money or using other digital currencies.
- Some allow trading with shares or financial titles accepted by the community.
- The price generally follows the supply and demand market depending on the cryptocurrency you want to trade, and it even changes every second.
- Many exchanges have tools for technical and fundamental analysis and indicators such as charts.
- Do you want to buy cryptocurrencies? Exchanges are the perfect place to do it and their main function.
- Likewise, you can exchange cryptocurrencies for money with the sales function, available on exchanges such as TruBit Pro.
Types of cryptocurrency exchanges
Although all digital currency exchanges have similar characteristics, there are some types that have different capabilities and objectives depending on the type of user you are. We explain them below:
In this category are most of the exchanges and services known by users, such as TruBit Pro. They are platforms focused on the purchase and sale of crypto assets, which follow traditional market prices. They are regulated platforms and they have to follow processes to make transactions more secure, such as KYC or the anti-money laundering policy.
Traditional exchanges have as their main business the commissions they charge for their services or for the common use of the platform, although there are cases such as the TruBit ecosystem that allows these transactions to be carried out without commissions by using the same network. In any case, commissions vary from 0 to 0.2 percent.
Many people believe that Crypto Brokers and exchanges are the same thing, but there is a very marked difference between them: the type of operations they carry out. Brokers are usually more focused on buying and selling crypto using crypto.
Another of the main differences is that cryptocurrency brokers set their own price for buying and selling, so they can be more expensive (or cheaper) than traditional exchanges.
OTC platforms (Over-The-Counter)
They are also very similar to traditional cryptocurrency exchanges, since it is a point between buyers or sellers. But, it is fully focused on direct negotiation between the parties, so the price will be according to them and can vary a lot.
Of course, the new OTC cryptocurrency platforms offer a high degree of privacy but without losing the ability to negotiate a price outside the market. Even the KYC processes can be more complete than on other platforms.
It is the solution that professionals in finance put in place, which allows you to buy access to cryptocurrencies through a fund. It is one of the easiest ways to buy and sell your digital coins, since you don't even need a wallet to store them. Many consider this as a trade and as an investment portfolio, so it has its advantages and disadvantages.
One of the main disadvantages of the funds is that there is no privacy when making transactions, since you only have to meet the requirements to enter these investment funds. It can even become somewhat insecure, because your cryptocurrencies are not under your control and you can lose them.
Decentralized cryptocurrency exchange
They are considered to be the direct evolution of traditional currency exchanges, since their function and uses are very similar between the two. As its name indicates, they are decentralized options, so there is no intermediary on the platform, being the most private option on the entire list.
How to choose the best cryptocurrency exchange
Do you want the best cryptocurrency exchange? Although there are several options on the market, the service you choose should have some of the basic features and functions that every crypto user needs to carry out their day-to-day operations. We list a few:
- Easy to use: Do you want to start investing in cryptocurrencies? Although exchanges have tools designed for advanced users, some products like TruBit Pro offer an easy-to-use interface and have great features such as: invest, profit, trade, hold, buy and even pay with crypto.
- Security– A secure cryptocurrency exchange is paramount, because your money is what is there. At TruBit we have world-class security protocols, developed by the best cybersecurity experts.
- Customer support when you need it: There will always be doubts and questions when using a crypto exchange, so the service you choose should have an expert customer support department. We have personalized attention 24/7 and in your language.
- Learning: companies must have a place for users to be informed and updated within the crypto world. TruBit Academia is the ideal option for all users, whether they are basic or more advanced.
- Designed for Latin America: the Latin American market and users have different needs, and there must be some exclusive functions for them. TruBit is the most complete exchange in LATAM, and is designed by and for people throughout the region.
- Earn more by investing! Can you imagine earning with cryptocurrencies? The exchange you choose must have a product similar to TruBit Gana+, which allows you to earn with the highest interest in the market.
- What is a cryptocurrency exchange
- What is a crypto exchange?
- How cryptocurrency exchanges work
- Types of cryptocurrency exchanges
- Traditional exchanges
- Cryptocurrency Brokers
- OTC platforms (Over-The-Counter)
- Cryptocurrency funds
- Decentralized cryptocurrency exchange
- How to choose the best cryptocurrency exchange