The cryptocurrency exchange is a platform where transactions are conducted for the sale and purchase of various cryptocurrency assets, from Bitcoin to Monero. The first cryptocurrency exchange was launched in 2010. It was Bitcoinmarket.com . Now it is no longer working. In 2014, the Mt.Cox exchange began operating. To date, hundreds of crypto exchanges with a different set of tools operate in the digital economy. Exchanges are divided into several types.
Types of Cryptocurrency Exchanges
Centralized cryptocurrency exchange. This site is controlled by a central management body. Each of the transactions is carried out with the help of a third party. Such exchanges are considered the most popular. Fees are charged for cryptocurrency exchange operations. Traders and investors are offered a large number of tools for trading transactions, margin trading, leverage, and so on.
The most famous centralized exchanges are Binance, where transactions totaling at least $4 billion are conducted every day. To get access to all Binance tools, the client needs to pass verification.
Another well-known centralized exchange is Huobi Global. Every day, transactions worth at least $ 2 billion are made on it. you can trade cryptocurrencies, stablecoins. More than 900 trading pairs are supported. Client verification is not required yet.
Decentralized crypto exchanges (DEX). Unlike centralized ones, decentralized ones are not managed by a single governing body. Only the community manages DEX. You can trade Bitcoin and other altcoins on them without restriction. All funds are at the disposal of the client. Trade transactions are carried out using atomic swap technology.
One of the most famous DEX is Uniswap. Created on the basis of the Ethereum blockchain. Clients contribute liquidity to pools, receiving rewards for this, which are expressed in fees.
Another popular DEX platform is Binance Dex. To work with the platform, you need to create a wallet. The platform supports assets that are placed on the Binance Chain.
Regulated and unregulated exchange
The main feature of a regulated exchange is that it has a license to operate in the state where it is registered. The regulated exchange fully complies with all legal requirements. Each user is checked before accessing the site interface. They also check all transactions as far as they are legal and lawful.
The first crypto exchange of this type was Currency, operating in accordance with the legislation of the Republic of Belarus. You can trade futures with leverage on it. A fiat gateway is used to replenish the client’s balance with funds. Another well-known platform is Coinbase. It has a registration from the American regulator, works in almost all states.
Unregulated cryptocurrency exchange. This type of exchanges requires almost no information from customers about themselves. They do not have full compliance with the law. Most often they are used by traders who do not want to provide all reports on their activities.
Such exchanges include YoBit. Verification is not needed on this exchange, there are no restrictions on trading cryptocurrencies and fiat yet.
The Livecoin platform works similarly. Clients do not pass verification. There is a fiat gateway for depositing funds.
Cryptocurrency exchanges that work with and without fiat funds.
A platform supporting fiats. This type of exchanges provides support for fiat funds. With their help, customers can purchase cryptocurrencies, exchange and withdraw them to bank cards or digital wallets. As a rule, cryptocurrency exchanges that support fiat have a KYC procedure
As an example, you can specify the Currency exchange. It supports rubles, Belarusian rubles, euros and the US dollar.
The YoBit exchange operates similarly. It is allowed not to pass verification on it. Users can use fiat currencies such as the ruble and dollar. Withdrawal and input is carried out using various payment systems.
Exchange with and without KYC
Trading platforms with KYC. Many existing exchanges use the “know your customer” procedure. Without this, they do not allow traders to work. Some sites require you to provide as much private information as possible. They cooperate with a large number of regulators in the countries where they work, including law enforcement agencies engaged in the search for illegally obtained funds.
Exchange without KYC. It is not required to undergo the KYC procedure at such sites. They provide all the possibilities of trading with cryptocurrencies, but only if customers do not exceed the established limits. Each exchange has its own. Now there are fewer exchanges without KYC.
Examples of such sites include Crex24. It supports trading with fiat, you can make a profit using cryptocurrency taps. If the client uses the Epay payment system, it is not necessary to pass verification.
Bitforex exchange. Several hundred currency pairs are available on it. It is possible to use futures. Since fiat funds cannot be used on the exchange, the KYC procedure is not carried out.
Platforms for P2P exchange
There are also platforms for P2P exchange. Clients create ads, and others choose from the suggested ones, or offer their own. All funds are transferred without intermediaries between clients. The platforms use escrow accounts to ensure transactions are carried out.
As examples, you can specify such sites as Monabey, Paxful, Binance p2p and others.
Exchanges where you can trade using derivatives
There are also exchanges on the cryptocurrency market where you can trade using derivatives. One of the most famous platforms is BitMEX. On it, customers can use contracts with different expiration dates. Fiats are not used, only cryptocurrencies.
Another platform that works with derivatives is FTX. Traders can use cryptocurrency contracts, spot trading, and you can purchase shares of companies in the form of tokens.
Thus, a large number of exchanges with different functionality and capabilities operate on the cryptocurrency market. Traders can choose the trading platform that meets their requirements. You should study the exchange very carefully before you start trading cryptocurrencies in order to minimize the risks of losing deposits.