Everything You Need to Known about Cryptocurrency Exchange

April 09, 2018 Quick read

The cryptocurrency has become a very lucrative business that is adopted by many investors. The cryptocurrency took a giant leap in business when Bitcoin started to worth thousands of dollars and made many people millionaires overnight. The market of cryptocurrency expanded when it was introduced with thousands of other cryptocurrencies. Investors started investing in all the potential digital currency and waited for them to grow so their investment can turn into profit.

There are many cryptocurrencies that are successful that are worth millions of dollars as market capital. But not all cryptocurrencies are successful enough to worth a million dollars on the market, therefore, the investors look for ways to save their investment. For many professional investors, a small loss doesn’t matter much because of the collateral investment in other cryptocurrencies. But the small level investors don’t have the resources to invest collaterally in other digital currencies. Therefore, they choose to exchange their coins to more fruitful cryptocurrencies.

What is cryptocurrency exchange?

There are many organizations and platform that acts as a bridge between cryptocurrencies and the users. They act as a platform on which you can get your desired currency in exchange for cryptocurrency that you have. In simple terms, cryptocurrency exchange is a platform where you can get a cryptocurrency that you desire for unwanted cryptocurrencies. These platforms conduct their business online and strictly keep their transactions online. These platforms can operate across borders and also provide cryptocurrency trading services to the clients. It is also seen as an online marketplace for cryptocurrencies.

There are conventionally four types of Cryptocurrency Exchange that these platforms offer, even though the names are not given to any of this exchange types, the concept remains the same as given below.

Traditional exchange platform:

This is the general type of exchange process that you witness in the market just like the stock exchanges that where buyers trade stocks. Here the exchange platform works as a bridge between the cryptocurrency and the buyer that consumes a minimal fee for the services that they provided.

Direct trading platform:

This type of platform offers the clients a peer-to-peer trading between buyers and sellers. Here the seller sets the rate of the currency themselves and the buyer can either buy the currency at that rate or notify the rate at which the buyer is willing to buy the crypto coins. This type of exchange platform is founded rarely in the market and is barely a plausible option for exchanging cryptocurrency.

Crypto brokers:

This type of exchange platforms are online and just like the currency exchange hubs that you see at the Airport. The customers are allowed to buy and sell cryptocurrencies on the rate set by the brokers. It works exactly like the traditional exchange platform but the difference is that in traditional exchange platform the rates are standard and universal, where the rates in crypto broker types are decided by the brokers themselves.

Cryptocurrency funds:

In this type of platform the funds which are pools of well-managed cryptocurrency asset that is controlled publically where the user doesn’t need to purchase the crypto coins directly and even still you can invest in the cryptocurrency.

These exchange platforms are not only used by small-scale investors, many professional investors also use the exchange platform to buy potentially fruitful cryptocurrency that will benefit their business on an exponential level. This exchange platform helps the investors to get the currency of their desire within minutes. Hence the trend of using cryptocurrency exchange is catching up amongst investors