BITCOIN AND CRYPTOCURRENCY EXCHANGE BASICS
What is a Bitcoin Exchange?
As the adoption of Bitcoin is becoming more widespread with investors, interest in such avenues as a Bitcoin exchange has spiked. For purposes of definition, a Bitcoin exchange is a digital marketplace whereby investors and traders can buy as well as sell bitcoins using different fiat currencies or alt coins. This platform is essentially an intermediary-and an important one- between buyers and sellers of coin. It is a necessary tool that makes the process of acquiring and liquidating Bitcoins efficient.
How to Choose the Right Cryptocurrency Exchange
I will narrow down to a list of three criteria that should have you covered:
- Country of location –Important because of the regulatory frameworks in different countries. It is best to rely on established exchanges within your jurisdiction.
- Method of payment to use –Determining this is for the sake of convenience and saving on transaction fees. It is paramount to check before picking on a certain exchange.
- Currency to be bought and sold –The entire cryptocurrency industry is dynamic with new coins popping up all the time. It is important to check that the exchange you pick is best tailored for trading your coin.
|Broker||Main Feature||Supported Countries||Trading Currency||Review||Open Account|
|Low Fees||Global||BTC||Review||Visit Exchange|
|Very Secure||US, Canada, UK, AU, Singapore + 27 other EU||BTC, ETH, LTC, BCH||Review||Visit Exchange|
|Not Hacked||EU||BTC, BCH, ETH+4 Other||Review||Visit Exchange|
|Provides good anonymity||Global||BTC||Review||Visit Exchange|
|Beginner Friendly||US||BTC, LTC, ETH||Review||Visit Exchange|
|Supports USD and Euro||EU, US||BTC, XRP, LTC, BCH, ETH||Review||Visit Exchange|
|Credit and Debit Cards Not Supported||EU, US, JP, CA||BTC, BCH, ETH, ETC, DASH, XLM + 11 other cryptocurrencies||Review||Visit Exchange|
|Not Begginer Friendly||US||190+||Review||Visit Exchange|
|Good customer care||EU||BTC, BCH, ETH +9 Other||Review||Visit Exchange|
How does a Bitcoin Exchange work?
To get the difference with exchanges, let’s highlight how a ‘regular’ cryptocurrency exchange works. Anyone looking to sell Bitcoins specifies the amount and the price they’d like to sell them at. These requests are placed in a common ledger, called the ‘order book.’
On the other hand, a person who wants to buy Bitcoins either looks for a satisfactory offer in the order book or creates their own ‘buy order’. In the order, they specify the terms of the deal as they like. When it is possible, the exchange matches buy and sell orders by price and then processes them.
It is important to note that Bitcoin transactions can take a long time; from five to 10 minutes at the least, sometimes up to several hours depending on mem-pool. For the purpose of hastening the trading process, the exchange operates as a trusted intermediary. It settles all trades immediately, even though the actual transactions might have not yet been finished. In order to remove the need for a third party, Peer to peer exchanges operates in a different way.
P2P replaces matching orders recorded in the order book with matching the people behind those orders. This means that whenever a matching buy and sell orders are found, the exchange software does not immediately process the trade. It takes an even more efficient route by connecting the buyer with the seller. This allows them to conduct the deal without any intermediaries.
That said, third parties may come in as arbitrators in case of arising disputes, but no human involvement from the exchange is required by default. With this, just like it is for Bitcoin itself, the software by itself is very much able to match traders with one other in a decentralized manner.
What Is A Cryptocurrency Exchange?
A Cryptocurrency exchange is a phrase used to refer to online platforms where a trader can exchange one cryptocurrency for another cryptocurrency or for fiat currency. To illustrate it better, contingent on the exchange itself, it is either similar to a stock exchange or a currency exchange.
How to Trade Bitcoins Anonymously
The easiest way is local Bitcoin purchase using cash. Paxful or LocalBitcoins can do the favor. Cash is hard to trace but it could be difficult finding a seller for such deals. Alternatively, you can use cash to buy coin from a Bitcoin ATM or a pseudonymous identity online backed by a Virtual Private Network (VPN).
- Supporting over 50 Fiat Currencies
- Good Security
- Bitcoin Only
- Beginner friendly
- Good security
- Supports over 50 Fiat currencies