The world “cryptocurrency” is not new to society anymore. Every year more and more people get engaged in trading activity. However, successful trading requires a thorough study of all the industry’s peculiarities and credible and convenient services.
A crypto exchange is a platform where traders and investors conduct transactions with digital assets and receive income. There are many different crypto exchange websites on the Internet, offering other conditions for traders, various tools, levels of security, number of digital assets, etc. Such platforms are divided into two groups:
- Decentralized crypto exchanges.
But before going into details of these groups let’s see if tax efficient crypto exists?
Centralized platforms operate as traditional financial institutions. They have a central government responsible for the safety of users’ funds and taking measures to track and identify illegal transactions. If suspicious activity is detected on an exchange, the government suspends the account and clears up the situation.
Before working with the exchange’s tools, every user passes KYC (“know-your-client” verification). This process can take a couple of days, and it implies that the user provides his documents to the exchange’s office for checking. All these measures aim to provide a high level of protection for users’ funds. Centralized exchanges store clients’ assets on their servers and protect them against hacker attacks.
Centralized crypto exchanges offer a wide array of digital assets and tools for trading. For example, the WhiteBIT exchange provides over 400 crypto pairs and pairs with fiat currencies. It offers a complete set of trading instruments:
- trading with leverage;
- trading bots;
Crypto exchanges charge fees for transactions, on average, 0,1%.
Decentralized crypto platforms offer the same features of swapping coins but through another mechanism. Users’ assets are not kept on an exchange; they just move between users’ wallets. Thus, decentralized platforms play the role of intermediaries between traders. They also charge fees for transactions, but they don’t guarantee safety. As a rule, experienced traders have accounts on both types of exchanges.
So we answered the question “What is crypto exchange?” and now let’s find out how it works.
- First and foremost, enter the exchange website.
- Then create an account, and pass KYC.
- Deposit money to your account and place an order to buy a cryptocurrency you need.
- Pay the fee, and you will receive the necessary assets to your account.
That’s how centralized exchanges work, though every platform has its peculiarities.