In today’s world, cryptocurrency is not a new concept anymore and one does not need technical education to make money in this field. Crypto trading is available for even not tech-savvy people. Traders and investors around the globe use cryptocurrency exchanges to make a profit from trading and earn on assets’ price changes.
The Internet offers numerous articles on how to make money on a cryptocurrency exchange, describing different trading strategies and ways to reduce risks. Some strategies are riskier, others less. One way or another, before starting trading, people should first comprehend those strategies. Some cryptocurrency exchanges provide beginners with an option to use a demo account, where they can practice and receive experience without risk.
So what is a cryptocurrency exchange, and how does it work? A cryptocurrency exchange is a platform that provides services for swapping crypto coins and other operations with crypto assets. Large exchanges demonstrate significant daily trade volumes (Binance, WhiteBIT, Huobi, and others). Such sites usually offer a wide array of crypto assets, many tools for receiving passive income, for example, staking. Also, users can trade with leverage, p2p, etc.
Centralized exchanges are platforms that verify each user to prevent fraudulent activity. They track suspicious activities and block those users who seem to act illegally. User funds are stored in exchange servers and are highly protected.
Decentralized exchanges do not provide safety for their users’ funds and do not store their assets. Instead, decentralized platforms operate as intermediaries between people who swap coins.
Cryptocurrency Exchange: How Does It Work?
So, how does a cryptocurrency exchange work? Let’s take WhiteBIT as an example. To start working on the platform, a user should register on the cryptocurrency exchange website. Then if one needs to conduct a simple exchange (swap coins), one may do it without KYC verification.
If the user needs more tools and functions to carry out other trading operations, one should pass the KYC verification. The procedure usually takes up to 24 hours. After that, the user can deposit one’s account. The cryptocurrency exchange WhiteBIT allows to deposit accounts through bank cards, but users should mind banks’ fees. Transactions fees are average – 0,1%. Then the user places an order – picks a cryptocurrency he wants to buy. And then, after the fee is charged, the user receives the needed assets in his account.