Crypto Exchanges: The Trading Hotspot
Exchange is a business that allows customers to exchange cryptocurrencies for fiat money or other cryptocurrencies.
What is Exchange?
Exchanges operate as brokerage offices and accept payment via cards or other forms of electronic payment in exchange for cryptocurrencies. Often a cryptocurrency exchange will charge a fee for this process. Exchanges can send digital assets to the consumer’s personal wallet. Other digital currencies are backed by other commodities, such as precious metals, including gold. There are two types of cryptocurrency exchanges: decentralized and centralized.
- Centralized exchange, which is the most common way to trade cryptocurrencies, implies that the exchange acts as an intermediary facilitating transactions between the parties.
- Decentralized Exchanges (DEX) allow peer-to-peer cryptocurrency trading and operate without a central authority.
IDEX and Curve Finance are examples of decentralized exchanges. Digital currency exchanges have proven to be some of the biggest winners of the surge in cryptocurrencies. Some of the largest centralized exchanges include Binance, Coinbase and Kraken. The higher the trading volume on an exchange, the lower the level of volatility.
