Anna Koretskaya 2m 404 #crypto
The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
A cryptocurrency exchange is a platform for transactions with digital currencies. Let’s find out how cryptocurrency exchanges work. Users can exchange their digital currencies for other cryptos available on the exchange or conventional currencies (like dollars and euros) if the exchange provides such an option. Some platforms allow purchasing crypto assets with fiat money and withdrawing funds to fiat, while others do not offer such an opportunity, and you can enter them only with crypto.
Cryptocurrency exchanges can be of two types:
- decentralized crypto exchange
Centralized platforms (CEX) store users’ private keys on their servers and ensure safety and security. To register on the centralized exchange, users pass the KYC (know your customer) procedure by providing personal data to the platform. Such a serious approach increases the credibility of the service, but on the other hand, if the exchange is hacked, the data and funds of customers will be vulnerable. That is the reason why CEX are focused on providing the highest level of customer protection and implementing mechanisms against hacker attacks. Centralized platforms are suitable for holding large investments and trading large amounts. Many credible platforms, such as, for example, WhiteBIT, store 96% of clients’ assets offline, making them inaccessible to hackers.
Another option is decentralized exchanges (DEX). They run based on smart contracts, which allow completing transactions quickly and without a centralized regulation. Users do not pass verification, do not send personal data, and remain the sole owners of their accounts keys.
DEX acts as intermediaries between users who come to swap their crypto. A decentralized cryptocurrency exchange is suitable for daily trading when you buy crypto and sell it in small portions daily.
Anonymity with DEX
The main and essential thing about DEX is that users don’t have to pass KYC verification and sometimes even don’t have to register. Many traders are unwilling to connect their ID with any financial platforms and prefer to stay in the shadow.
All you need to trade on DEX is a crypto wallet. You come to exchange (for example, SushiSwap, UniSwap), place an order to buy this or that coin, pay a fee, and receive your assets.
With the right approach, cryptocurrency exchanges are a good tool for making money, and it doesn’t matter whether you choose a centralized or decentralized platform. It is crucial to trade with a cool head and take your time. To learn more about trading, visit the White Blog.