Bitcoin Traders, Here’s Three Different Cryptocurrency Exchange Types
Buying and selling digital coins is no longer a new thing nowadays. In, fact, as cryptocurrencies get popular each day, so many people want to trade on these digital coins.
However, the challenge lies on where to trade. Currently, the world offers many exchange platforms but three main cryptocurrency platforms stand out. It is on these platforms where you can buy and sell your Bitcoin, Ethereum or any other altcoins for that matter.
Three Different Cryptocurrency Exchange Types
Traditional Cryptocurrency Exchanges
Traditional cryptocurrency exchanges are not different from stock exchange markets, which allow clients or investors for that matter to trade using Open Order Books.
Due to the big number of active members, who buy and sell, traditional cryptocurrency exchanges become the number one cryptocurrency exchange platform. But it is not the only one.
When making transactions, traditional crypto exchanges charge a small fee from clients. The amount of fee varies from one client to the other based on the amount of profit the transaction generates.
There are two typed of traditional crypto exchanges. The first one is a centralized exchange, which is controlled fully by brokerage terms. The second one is a decentralized traditional cryptocurrency exchange platform is managed by code thus the difference.
There have been security concerns by clients on the private information they are required to provide by a centralized cryptocurrency exchange.
It should be remembered that in more than one occasion centralized cryptocurrency exchange platforms have been hacked. The notable example is the 2017 hack on a Japanese centralized cryptocurrency platform that cost investors millions of dollars.
Peer To Peer Cryptocurrency Exchanges
As the name suggests, this is a willing seller/willing buyer crypto exchange. In this type of digital coin trade, a buyer or seller deals directly to whomever they feel they can trade digital coins without involving a middleman.
Additionally, P2P cryptocurrency exchange as it is sometimes called, gives buyers and sellers the liberty to exchange their confidential information such as accounts, emails, and any other details that leads to the successful transaction.
Although P2P cryptocurrency exchange may look personal, some platforms have been created to enable the buyer meet the seller. Remitano and Localbitcoin are examples of these platforms that allow clients to negotiate and trade on digital currencies.
Crypto broker is not any different from a foreign exchange bureau where you will take notes in exchange of the currency you are looking for.
You do not have command over how much you will sell or buy the digital coin. The company or the ‘crypto broker’ sets the rates. Often times, the rate is slightly higher than what the market offers. Of course, this is to allow the crypto broker to make a profit.
Coinbase and Changelly are the best examples of crypto brokers. Because of their coin versatility, and friendly customer care support, most cryptocurrency traders tend prefer crypto brokers to P2P exchanges.