Cryptocurrency Exchange allows other businesses and customers to trade cryptocurrencies in exchange of other important assets listed in the exchange. It can be in the form of cash or any other digital exchange. Every exchange has different features and advantages and according to them the exchanges are chosen. Here we will see the four major exchanges and some of the other details related to crypto trading exchanges.
Classification of the Crypto Exchanges
One of the most important things to understand here is that, we are not recommending you any sort of particular exchange. We are just comparing them on the basis of their advantages and disadvantages as well. The final choice is actually up to you.
The four major types of crypto exchanges are:
The distinction between all the crypto exchanges gets done on the basis of two factors that are compliance with regulation and the entity that controls the fund during process of trading. Hair we have an analysis of each type of exchange and also provide some examples so that it can become easier for you to understand.
It is one of the most common the largest crypto exchange in the world belongs to this. There are several platforms that are centralized. This platform is having a centralized operator that is responsible for the up gradation, security, functionality and also the representative can easily handle the public relations on their behalf. It also runs on the Centralized Crypto Exchanges software and it is having only one central server that helps in running all the operations.
- These are having the biggest liquidity and volume among all the others.
- There are some Centralized Cryptocurrency Exchange Solutions that can easily receive the deposits in fiat currency.
- There is a large variety of crypto currencies that can easily get treated in the centralized exchanges.
- The users do not have any real control over the coins that are restored in crypto exchanges wallet.
- It takes a lot of time in completing the withdrawal procedure.
As compared to the centralized exchanges, these exchanges are completely opposite. No single entity can control these exchanges. It’s basically a set of smart contracts and it allows the users having a trustless token exchanges. Even there are users consider White Label Exchange Platform for getting right suggestions regarding the Decentralized exchanges.
- In this, the users can easily get full control over all the funds
- Only the user will have the access to close the opened trades.
- There are several other unpopular tokens available that can be used for trading.
- The best part is that no one can hack it is protected by the security of the blockchain.
- There is very low liquidity.
- In order to place order or cancel order it is necessary to pay a particular amount of fees. Yes, in this every action needs an amount.
- The user can only trade inside a particular blockchain
- Since, it is a smart contract hence if you did something wrong then you will lose all your funds
- There is no fiat here.
Shapeshift, Godex, Changelly and others are a few popular types of this exchange available. Even with the White Label Crypto Exchange Software, one can get more details about the same. It is a very simple way to exchange any cryptocurrency for other. Here the best part is, you do not trade with any another trader you simply trade with the service itself. It is fast and simple.
- It is fast and instant.
- There is no requirement of holding the funds of the users.
- It is having a lot of coins and tokens.
- The price is quite higher as compared to other crypto exchanges.
- Some certain pairs are not available because it sometimes runs out of coins.
- For the small retail buyers small liquidity pool is available but not for large amounts.
- You cannot exchange millions worth of assets at this platform.
Hybrid Crypto Exchange
As the name suggests, it is a combination of security of decentralized exchange and the usability of centralized exchanges.
- It comes with a high security factor.
- User gets the facility of two factor authentication.
- That type of exchanges can never easily get hacked
- Fat deposits are also available.
- There is a protection against DDOS attacks
The volume is somewhere between centralized and decentralized exchange. Sometimes it is not quite enough for the crypto whale.
Crypto OTC services are also available through Binance. With the invention of this now it is possible to trade over large amounts of several cryptocurrenices listed on the binance exchange.
- Large quantity of cryptocurrency can be done over a single trade
- It saves time by clearing the trade at one price
- Trade are completely safe as the order books are safe
- All the settlements can be done via single Binance account
- Binance Level 2 verification is required in order to trade in binance
- A trade order worth 20 BTC is a minimum requirement
One of the popular P2P Bitcoin exchange is LocalBitcoin. With these coins you can easily meet with local people in your area and sell it in cash, PayPal or a bank deposit. Some of the features are:
- Only takes 1% commission from the sellers.
- Sellers can set their own exchange rates.
- If any problem happens in transaction then there is a team which resovles the conflict between buyer and seller.
|Number of assets||High||Moderate||High||High|
|Coin holder||Exchange||User||User||User or exchange|
Each and every type of exchange is different from each other. Each is having its own advantage and disadvantage. It depends upon the requirement of the user that which exchange he or she wants to prefer. There are some people who usually want usability of security and choose the popular exchanges. While others are simply don’t trust the centralized ones and willing to control their coins. A lot of options are available to choose from however it is important to understand that a wrong choice may lead towards a great loss of funds.