About a decade ago, getting your hands on cryptocurrency was completely different than what it is today. If you wanted to get some Bitcoin, you’d have to mine it on your own, using a computer system that was far from what a mining rig needs to be.
Cryptocurrency Exchanges and trading were non-existent, and if you wanted to purchase some BTC from a person, you’d have to do it in person, and it was quite shady.
Luckily, as years went by and people saw the rising demand for cryptocurrency, someone came with a brilliant idea to open up an online exchange website where people can buy, sell and trade. And so, cryptocurrency exchanges were born.
What Exactly are Cryptocurrency Exchanges?
Platforms on which you can exchange your “crypto-goods”, while tracking prices, communicating with other people and minding your crypto-business, are called Cryptocurrency Exchanges.
There are tons of them on the internet nowadays, and all of them offer something different from the average user. But, before you decide which one to use, you probably want to learn some more about how they work, right?
How do They Work?
Just like any other marketplace where you can exchange currencies, Cryptocurrency Exchanges work the same, but they can be just a bit more complicated to a person that’s completely new to this area.
One thing that differentiates these exchanges from the others is the fact that they are open 24/7 compared to other stock exchanges for example that have pre-set trading hours.
Now, one of the things that you are probably the most interested in is how these exchanges manage to make a profit to keep being up and online for thousands of users across the world. Well, there are two different ways of doing this.
The first way is by adding a slight cut to each transaction, which is something that almost every exchange does, and the other one is by creating a crypto-currency that’s owned by the website.
One of the best examples for this is the Binance coin (BNB), owned by the Binance exchange. This coin saw a lot of success back in 2019, with an unbelievable increase of over 500% in the first few weeks after its release. If you are interested in staying in touch with the latest crypto-news, feel free to visit cryptozink.io
How do I Choose the Best One?
Although there isn’t a “best” exchange, all of them offer something different, so you as a user are free to decide which one you are going to use. Some are popular for their customer support, others are known for having the best possible list of choices for coins, which is very important.
If you want to invest in a certain coin, and you are sure that it’s going to grow soon, it’s quite a bummer to see that the website you’re using doesn’t have that coin listed as a possible trading option. So, variability and a broad selection of coins are very important, and people appreciate that.
Some exchanges are known for having the best possible security, meaning that hackers were never able to breach them, and the loss percentage of coins is barely noticeable. This is another factor that makes a lot of people interested in an exchange.
Should I Store my Coins Here?
This is the part that most beginners have trouble understanding, but we are here to help you expand your knowledge, so pay a lot of attention on this part, it’s very important.
A cryptocurrency exchange is not the same as a cryptocurrency wallet. This means that after you are done trading your coins, purchasing or selling, you should immediately transfer them into your wallet, where they can be safely stored for a longer period.
“But, I thought crypto-exchanges are safe, why shouldn’t I store my coins there?” Although these websites are very safe, and today almost all of them require the user to have a two-factor authentication method enabled, there are still higher chances that a group of hackers will find out about it and try to breach.
Your wallet address, however, is known only by you, and it is always recommended that you store it physically instead of virtually, meaning that someone would have to come inside your home and find your piece of paper to steal your coins, which is highly unlikely.
So, as soon as you are done with trading, you should transfer everything to your wallet. Don’t keep your coins on the exchange.
Creating an Account – Why and How
Before you start using a cryptocurrency exchange platform, you will have to register a free account. You cannot use the website as a guest, simply because the entire point of it is to manage your belongings, so an account is required.
Since this is not a social media website where anyone can register, most of these exchanges will require you to insert detailed information about you, your living address and a few other things, depending on which country you live in. The support team of this website will not abuse your information, and they simply need it because of legal reasons.
Crypto-coins are just like real money, and on any trading website when you are registering, you are required to insert the same things as well.
Once you are done with that, the support team of the exchange you’ve chosen will take some time to review your request, and if everything looks good, your account will be approved and you will be free to use the website’s services.
Do Some Research
In all honesty, the world of crypto-currency is not very simple, especially if you are the type of person that has never been interested in such things. Before investing your money into something that you have no idea how it works, make sure to do some research.
If you are willing to spend enough time learning about crypto-currency, you will also be able to make some profit in the future. Remember that this thing is considered to be a long-term investment, so don’t rush your decisions.
Being informed and constantly staying in touch with the latest changes is one of the smartest things that you can do in the world of crypto-currencies, so pay a lot of attention to that, and you will be a successful trader.