Alright, what are cryptocurrency exchanges? Today I learned that there are three types of exchanges:
- Regular Exchange
- Broker Exchange
- Direct Trading Platform
The regular exchange is also called a trading platform. It can be either centralized or decentralized. Centralized means it's run by either a single person or a group. They're fast and user-friendly. Best of all, offer a high number of different cryptocurrencies as well as fiat money. Decentralized are safer from hackers but don't offer the same as a centralized exchange.
Broker exchanges set the price for each cryptocurrency they trade. The price cannot deviate from this 'set' price. They are quick and easy to use but the broker adds their commission to the cost of the transaction.
Direct trading exchanges are done between people directly. This allows for less complications with transactions. The problem with this though, is how do you trust whoever it is at the other end? I won't be going with this one, for sure.
Regular exchanges are more traditional similar to how stocks are bought and sold. Buyers will offer their price that they want to pay to buy currencies, while sellers offer an asking price they want buyers to pay. The exchange then mixes and matches the various offers, bids and asking prices. A transaction fee is also a part of the deal, going to the exchange.
Anyone know of a good traditional exchange?