What Is Cryptocurrency Exchange?
The exchange is a middle authority which is facilitating the entire trade of cryptocurrencies under one roof. As banks help in circulation of money similarly Exchanges help in circulation of Cryptocurrencies. Against these services provided by the exchanges, they charge their brokerage (as per financial regulations of the country).
Professional web portals which enact as a trading interface for buyers and sellers to trade on cryptocurrencies. These websites are professional, trade-oriented, user-friendly platforms and they charge their brokerage for the services they provide. Cryptocurrency exchange is a platform where buyers and sellers meet other. In exchange cryptocurrency trade is done against traditional currencies like USD, EURO etc. or other cryptocurrencies. Based on the verified account anyone can trade. A unique ID is provided linked to an electronic wallet. The bank account is not required to trade upon as electronic wallet serves the purpose for it.
What are the different Types of Cryptocurrency exchanges globally?
As a pattern, it is observed that there are three kinds of platforms are practically working in the industry.
- Brokers – Small websites for open trade or individuals working live in the market as foreign exchange dealers have their own set prices.
- Direct Platforms – Direct person to person trading where individuals from the different part of the world can interact. These exchanges have fixed trading rates based on the demand and supply factor of cryptocurrency.
- Electronic Trading Platforms – Electronic Portals or websites which enacts as a user-friendly platform.
What could be considered the Features of an Ideal Cryptocurrency Exchange?
Following could be treated as the traits of an ideal cryptocurrency exchange. And if all the features could be established in an exchange then may be the best exchange could be formulated. Let us check out the traits:
- Transparency in Fee taken by exchange – Exchange should have transparent payment norms related to the exchange fee charged from clients
- Reputation Check – Always check the reputation of the exchange, one can fetch valuable information from social media platform regarding the reputation of the exchange. Exchanges have their word of mouth which reflects their reputation.
- Changed Exchange Rates – Sometimes at different exchanges there is the difference of trading rates that prevail. Often it has variation range of 3% to 10%
- Geographical restrictions (if any) – One should check the facilities offered by the exchange should have universal application
- Verification process – it includes a close watch on the identity of a person although at the time remaining anonymous is permissible. This identity check is maintained in order to prevent any illegal activities or scams.
- Neat and clean payment methods and policies – online as well as offline both methods of payments are allowed. But offline payments would definitely be more time consuming as compared to online payment mode.
Are Cryptocurrency Exchanges limited in number?
- No, there are a huge number of cryptocurrency exchanges available today worldwide, however, all exchanges may not be equal. Still, there is a huge range to choose from. These exchanges may vary depending upon the following attributes:
- How accessible are they?
- How secure are they?
- How much User-friendly they are?
- What fees do they charge?
Is there any best exchange in the list of exchanges?
We cannot commit to which exchange would be the best, as the rank could probably change from time to time. Down below are mentioned top five cryptocurrency exchanges which are operating in the entire world.
- Shape shift
Let us observe them one by one. To begin with the first exchange, it is Shape Shift.
1) Shape Shift
A range of cryptocurrencies can be exchanged on this leading exchange in the whole world. Coins including
- Zcash etc could be traded well through this medium of exchange.
There isn’t any need to create or sign up an account if you are trading on this exchange. And thus it is best for those who don’t want to get involved in such tedious task.
- Straightforward exchange can be initiated here.
- If you also want to trade on this exchange then make sure you possess either Bitcoins or some other crypto coins which may be supported on this exchange, as
- No cash payments are acceptable.
- Fiat money including credit cards & debit cards doesn’t work on this exchange.
As every coin has two faces – heads and tails, similarly, each exchange has certain advantages and certain disadvantages too. Let’s give a look at plus and minus of Shape Shift Exchange.
- The exchange is really friendly for the beginners
- It is fast
- Works on reasonable fees
- Has a good reputation in cryptocurrency market
- Good numbers of coins are available for exchange
- Payment options available are very limited
- Fiat money is not accepted
- The mobile application can be marked as average.
- Ether and US Bitcoins can be exchanged on Gemini, which is a completely licensed and regulated exchange. Bank and Gemini are quite similar in terms of the regulatory standards & capital needed. This exchange was founded by two gentlemen, Cameron Winklevoss & Tyler. The huge range of cryptocurrencies available worldwide cannot be exchanged here. Only 3 currencies of the world can be traded on this platform which are:
- BTC i.e. Bitcoin
- ETH i.e. Ether
- US Dollars
The best part of the exchange is that all withdrawals and currency deposits remain free of cost. The full availability of the exchange is only for:
- The United Kingdom
- Hong Kong
- South Korea
- The 42 US States
Let us now look at the plus and minus of this exchange.
- The analytical work is superb
- There is security as well as compliance
- The liquidity is very high
- The design is friendly for the users (i.e. it is user-friendly)
- The availability of exchange is limited to certain part of the world
- A limited number of currencies can be exchanged
- The customer support provided counts to be average
This exchange is one of the most popular exchanges in the whole world. It has a huge customer trust and millions of users in the entire world. The purchasing, storing, utilizing and trading the cryptocurrencies on this exchange is quite easy and secure. The purchase of
can be initiated by the user just through the click on mobile phone i.e. iPhone and Android phones. A digital wallet is available with them which aids in this exchange through GDAX i.e. Global Digital Asset Exchange subsidiary. If any currency is transferred from coinbase to GDAX or vice-a-versa then no charges would be applicable for this funds transfer.
- There is an insurance cover by Coinbase on the stored currency
- The fees charged is very nominal
- The reputation of the exchange is good
- The exchange is not just user-friendly rather beginner-friendly too
- It is secure
- The countries covered under this exchange are limited
- Only technical traders suit to GDAX
- The payment modes are limited
This exchange gives a liberty to securely exchange more than a century of various Bitcoin cryptocurrencies in pairs available worldwide. The exchange was formed in the year 2014 and is considered as the leading exchanges out of the whole range.
- The fee charged would vary from taker party to maker party.
- For makers it is low and for takers, it is comparatively on the higher side.
- Only transaction fee is chargeable.
- No withdrawal fee is applicable.
“Chatbox” of this platform is a unique and genuine feature. This area is all time full of tips for users’ help and other necessary information.
- The trading fee charged is quite low
- The volume of trade is quite high
- The account creation is very fast
- There are a lot of features
- It is a user-friendly exchange
- Fiat money is not accepted
- Customer service is quite slow
This exchange is the one which allows to sell and to purchase bitcoins. And in return, one can get either cryptocurrencies or even fiat money. No central authority is required if you are making an exchange using this platform it could be considered as the peer-to-peer exchange, and thus it is completely decentralized in nature. Only the partner entering into the exchange share their personal data and no one else is allowed to do so. It is the best exchange for those who wish to remain unknown. Bitsquare offers a secure network for exchange.
- Best for traders who can be considered advanced
- It is private and secure exchange
- Nominal fee charges
- Has a good reputation
- It is open source with global availability
- A huge number of cryptocurrencies are available for exchange.
- The customer support service is ranked average
- It is not for the beginners
- The payment modes are limited
All Cryptocurrencies need a platform where they can be exchanged against some other currency forms. These exchanges have certain typical features that we have already read in detail above, and based on which there exists different types of exchanges. More importantly, we have studied some top exchanges which are helping the users globally in initiating their sales and purchases of bitcoins, ethereum, litecoin, fiat money, and several mother cryptocurrencies.
Before concluding the essay we would like to throw some light on the fact that a wallet for cryptocurrencies is an entirely different concept as compared with cryptocurrency exchange and both should not be confused. Exchange basically is a platform for buying and selling whereas wallet is a service for storing coin digitally and securely. The uses and functions of wallets must be clarified and correctly utilized.
Choosing the correct gateway for successfully completing an exchange is quite necessary for each buyer and seller of cryptocurrencies.