Cryptocurrency exchanges are websites which allow users a platform to buy sell or exchange Cryptocurrency to either other forms of digital currency of traditional currency like Dollars or Euro. There are two types of exchanges when it comes to cryptocurrencies. One is concerned with the fiat exchange where fiat currency is exchanged for cryptocurrency, and the other is cryptocurrency to cryptocurrency exchange, where Cryptocurrencies are traded with each other.
There are three main types of exchange platform-
Trading Platforms ( those which connect the seller and the buyer and charges a fee for the transaction that ensues.),
Direct Trading ( those which connect individuals who can set their exchange rate to exchange currency) and
Brokers ( those which anyone can visit and buy cryptocurrencies at a predetermined price, set by the broker.
Several things should be kept in mind, before joining an exchange. The reputation of the exchange is an essential criterion in order to ensure that the exchange is conducted smoothly. Another very important issue is the fees that most exchanges charge for deposits, transactions and withdrawal. The amount payable should also be kept in mind. Most trading platforms also have some ID verification as protection against scams and money laundering. Some functions offered by these platforms are restricted to certain geographical areas, and thus should be kept in mind along with the different and fluctuating exchange rates.
The top 5 Cryptocurrency exchanges are-
- Coinbase– Coinbase is a wallet and an exchange platform launched in 2012 in San Francisco operates in 32 countries and has exchanged over 40 billion USD to serve approximately 20 million customers. By 2013, Coinbase was the highest funded Bitcoin startup largest exchange of cryptocurrency in the world. Users can buy sell, store and trade tokens on this platform which is easy to use and very helpful especially for beginners.
- Kraken– Kraken which is a partner in the first Cryptocurrency bank, was founded in 2011 and ins the largest Bitcoin exchange in Euro volume and liquidity. Kraken accepts Fiats like Euros, US Dollars, Canadian Dollars, British Pound and Japanese Yen and Cryptocurrencies like Ethereum, Monero, Ethereum Classic, Augur REP tokens, ICONOMI, Zcash, Litecoin, Dogecoin, Ripple and Stellar/Lumens. It has a good reputation, low transaction and deposit fees, provides great user support and is supported worldwide.
- Cex.io– Cex.io is a platform which enables users to easily trade Fiat money with Cryptocurrency and vice versa, and offers a host of other services for using crypto. The platform has personalized, user-friendly dashboards and margin trading and also offers brokerage services. Cex.io boasts of a good reputation and supports credit cards. It is beginner friendly and provides API solutions for automated trading. The Cex.io website is secure, and cryptocurrencies can be stored in a safe cold storage.
- Poloniex– Poloniex was founded in 2014, and is now one of the world’s leading Cryptocurrency exchanges. More than 100 different BitCoin Cryptocurrency pairings and with one of the highest trading volumes is a very popular trading platform. Poloniex uses a volume-tiered fee schedule for makers and takers, and thus the fee differs on the basis of whether one is a maker or taker. For makers, fees range from 0 to 0.15% and for takers from 0.10 to 0.25%. The chatbox feature also keeps users engaged and serves as a problem-solving sphere.
- Binance– Binance is an exchange platform for crypto to crypto trading, based in Hong Kong and is available to all countries and US states. They provide services at a very cheap rate where the standard trading fee is just 0.01% which can be further reduced if BNB, Binance’s very own coin is used. It holds a considerable selection of altcoins and Bitcoin, Ethereum, and Tether pairings. They also offer a large variety of coins for purchase. Recently Binance has come up
Recently, Binance has introduced SAFU (Secure Asset Fund for Users), that gives back 10% of the exchange in case of a hack.