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How to Pick a Crypto Exchange
Picking a cryptocurrency exchange can be difficult, especially when you are new to trading. Plenty of people use brokers, such as eToro and Revolut, but ultimately this leaves the user paying higher fees and not having the keys to control their wallets. Using an exchange gives the user more scope to protect their coins, even if they may be slightly more complicated to use.
An exchange acts as an intermediary between two traders. It allows them to trade with each other in pairs while taking a fee. These trading pairs, such as USD/BTC or USD/XRP, mean that an investor can only sell to an appropriate or corresponding trader. It’s like you introducing two friends you know would get along together at a party, and they buy you a drink to say thanks.
There are two main types of exchanges. Centralized are where a third party is involved in the transactions, providing software and storage options that the user signs up to. The second type is decentralized, where the exchange involves no signup or details and introduces trading partners. Arguably the most secure exchange is the decentralized one due to its anonymity. Still, the third-party interface of the centralized platform makes this a much more user-friendly option.
