Table of Contents
- What Are Bitcoin Exchanges?
- How To Create A Crypto Exchange Account?
- How Cryptocurrency Exchanges Operate
- The Best Crypto Exchanges
- Top Decentralized Cryptocurrency Exchanges
- What Are Margin and Futures Trading?
- What is a Bitcoin Wallet?
- How To Use Trading Pairs?
- How to Earn Crypto Rewards?
- How To Choose The Best Crypto Exchange
What Are Bitcoin Exchanges?
In a nutshell, crypto exchanges are businesses that allow people to buy and sell cryptocurrencies for fiat currencies or other crypto assets. Investors can use their own cryptos or fiat currency via a digital wallet, bank account, or credit card.
Based on their core mechanics and trading principles, crypto exchanges can be centralized and decentralized, with each offering certain benefits, but potential problems as well. As of now, there are numerous exchanges on the internet trying to grab a share of the market as big as possible.
We advise you to exploit the momentum and start investing in cryptos while the whole industry is still in its early stages. The price depends on the demand and supply of the market, which is synonymous with volatility. For more details about Bitcoin and the blockchain, visit the Best Bitcoin Casino site.
Quite similar to stock exchanges, centralized crypto exchanges, or CEX, serve as intermediaries when you buy and sell your crypto holdings. They offer brokerage services and enable active traders to buy and sell at the prevailing price, otherwise known as spot.
Most crypto exchanges will let you issue orders when to buy or sell when a crypto reaches the desired value – these are known as limit orders. But remember, centralized crypto exchanges store your cryptos on their own digital wallet, not yours. This is why some inventors shun even the best crypto exchanges run by a third party.
Centralized crypto exchanges are run by an order book system. Sell and buy orders are listed by the price and the matching engine connects sellers and buyers according to their aimed price and quantity. Thai applies to both cryptos and fiat currencies and use credit or debit card as well as cryptos.
A good thing about CEXs is that they allow you to be somewhat relaxed due to their ability to decide which crypto will be allowed to be traded with.
- Easy to use
- Secured and reliable
- Margin trading
- Possible hacking targets
- No personal wallet
- Expensive fees
As the name suggests, decentralized exchanges, or DEX, enable direct transactions straight from your crypto wallet. There are no intermediaries, just peer-to-peer multiple exchanges, which is the best-decentralized exchange asset.
Compared to many crypto exchanges with a centralized system, decentralized systems are often the best crypto exchange solution for crypto investors interested in low trading fees and less market control and manipulation. DEXs are best suited for users who delved deep into advanced trading with cryptos. As for private keys, if you opt for DEXs you have to remember them, otherwise, your cryptos are gone for good.
On the other hand, DEXs are not going to bother you with copious personal details you have to disclose. When trading Bitcoin, Ethereum, Bitcoin cash, and other crypto assets via decentralized exchanges, buyers and sellers use self-executing parts of blockchain code called smart contracts, which allow low fees compared to centralized trading platforms, including account fees and transaction fees.
Naturally, having no intermediary means you will have to manage by yourself in times of doubt or trouble, so we recommend this type of crypto trading to more experienced crypto asset investors.
- You hold your assets
- Superior privacy, low fees
- No market manipulation
- Too complex for rookies
- Low trading volume
- No fiat currencies
How To Create A Crypto Exchange Account?
It is similar to an online brokerage account. Follow the step-by-step procedure presented by the exchange, and you should be ready in no time because they are quite intuitive. Please bear in mind that in some jurisdictions this will take a few days, while in others it may be over in a day or so. Here’s what you need to prepare and/or disclose:
- Full name
- Date of birth
- Email address
- Phone number
- Physical address
- A copy of the recent utility bill, with the same address
- Social security number, or equivalent
- A government-issued document with a photo: ID, driver’s license, or passport
- A selfie while holding one of the documents listed above
How Cryptocurrency Exchanges Operate
Crypto exchanges work by enabling traders to sell and buy cryptos for fiat money, another cryptocurrency of their choosing, or the other way around – selling cryptos for regular cash. This is made possible thanks to the order book that displays orders and dictates the exchange rates like in the real financial market or stock exchange.
The more users an exchange has, the more relevant prices it provides to the traders. If you ever wondered why there is a discrepancy among popular crypto exchanges in terms of crypto prices – this is the main culprit. You can issue a number of commands that can take action in exchanges, but it boils down to market order and limit order.
If you place a market order you aggregate the best available prices for the quantities demanded. A limit order commands the exchange to trade your goods at the price set in advance, or better, but you still need a buyer or seller in order for a transaction to be completed. Before we continue, you should know that hybrid exchanges also exist.
They combine the best of both worlds – centralized and decentralized – but for now, let’s stick to the basics and talk about the two main types of exchanges.
The Best Crypto Exchanges
Here are some of the best cryptocurrency exchanges existing today, with intuitive user interfaces and legit business histories. Top centralized crypto exchange platforms are listed according to their liquidity, safety, traffic, and trading volume.
This crypto exchange is one of the biggest in the world and the largest US-based crypto trading platform, known for large trading volumes Among competitors, Coinbase tops most cryptocurrency exchanges in terms of minimal crypto exchange account funding and a crypto market supporting over 150 cryptos.
At some point, you will have to choose how to handle your digital assets and trade Bitcoin – using a plane and simple Coinbase or switch to Coinbase Pro. The latter belongs to the group of more sophisticated global crypto exchanges and it offers more complex charting and trading options, best fitted to advanced traders.
Coinbase is one of the best crypto exchanges on the planet, but its crypto exchange fees can be a bit confusing, not to mention – significantly higher than trading fees imposed by other crypto exchanges.
In conclusion, Coinbase is ideal for crypto traders looking for convenience, and those who are new to crypto trades and want to start trading crypto assets not worrying about higher trading fees. Coinbase allows the use of a personal crypto wallet and it features support available via phone, chat, and email.
Crypto transactions come with withdrawal fees ranging from 0,5% to 4,5%, depending on many factors – trading platforms, the currency used, etc.
If you want to buy Bitcoin and other digital assets, Binance has one of the lowest withdrawal fees as well as one of the highest liquidities out there. This is probably the biggest cryptocurrency exchange in the world, but it is somewhat limited for US customers and residents of several countries in which Binance had some regulatory issues.
While trading fees are a bit lower, bear in mind that Binance is a bit complicated to use and we ordinarily do not advise beginners to use it right away. Having said that, novice investors can rely on superb peer-to-peer payments, primarily when used in crypto-to-crypto trading.
Binance has its own Binance Coin (BNB) used to facilitate digital assets trading within the Binance crypto exchange. Granted, it is not available in 7 US states, but there are more than 65 cryptos available at Binance, and fees range from 0,1% to 5%.
Debit card transactions add 4,5% to the fee total and other fees may apply. Support is email only, and we suggest traders use it with iOS operating systems, rather than Android which is apparently falling behind. The account minimum value is $10.
While it’s not available to US investors, OKX is more than a simple trading platform. This exchange is well known for its low fees and lucrative staking and saving features, alongside buying or selling over 300 cryptos.
If you like to manage things by going to one place only, OKX might be your top pick. OKX is quite friendly towards fiat currencies, bank accounts, and cards. Note that not all currencies have the same high liquidity, so do not sell or buy at all costs – use only currencies with excellent liquidity.
It is also worth mentioning that OKX had some issues with unsatisfied customers complaining about lost funds and poor customer service. If low transaction fees (0,1% or less) are not enough to talk you into OKX, high-interest staking and saving possibilities could do just that.
Needless to say, you can use Apple Pay, Google Pay, and similar services.
With a minimum trade of just $1, FTX is great for beginners and cautious investors, but still, it is capable of delivering a string of more complex services designed for experienced buyers and sellers.
The overall opinion is that FTX is best used for quick and regular withdrawals, or trading with fiat currencies. With low trading fees from 0% via mobile app to 0,4% and no account minimum, FTX is very attractive to both old investors and those wanting to get involved in crypto trading.
Sadly, FTX features a lot fewer cryptos than its main competitors and the support is quite limited. On the bright side, FTX is advertised as a platform “by traders for traders” and it features several advanced trading options such as margin trading and derivatives like future contracts, or simply futures.
Packed with up-to-date tools and somewhat low fees, Kraken will probably intrigue seasoned investors and those looking for a large selection of crypto assets. Advanced traders can enjoy even lower costs, and with over 120 cryptos and even more trading pairs, Kraken surely starts to look similar to the creature it was named for.
The minimum trade is set to 0,0001BTC and transaction fees revolve between 0,9% and 2%. The website is user-friendly and it enables the investor to find important information in a matter of seconds. The support team can be reached from 6 AM to 6 PM via a direct phone line, paired with a 24-hour live chat service.
Although Kraken looks like a great beginner’s tool, its best products and features are aimed at more experienced traders. You should definitely check it up if you plan to invest in a broad array of assets and are not afraid to learn a thing or two about crypto trading.
This exchange practically offers three platforms in one. The first is easy on beginners and it’s used for basic trading. The second, advanced platform is for seasoned traders, and finally, there is a portal for peer-to-peer transactions.
And while it does come with ginger fees, Gemini is available throughout the United States and the site has insurance against hacking attacks. The minimum trade is 0,00001BTC, there are 21 trading pairs available, and excellent apps for both iOS and Android phones.
The fees range from 0,5% to a whopping 3,99%. Gemini is great for beginners and those in fear of hacker attacks, but those commodities come with a price. The exchange features over 50 cryptos.
BTCChina (BTCC) is the world’s second-biggest BTC exchange by volume. It was founded in 2011 and since 2014 you can use it as a mining station for Bitcoin and other cryptos, thanks to the BTCC mining pool. Based in Shanghai, BTCC is the first crypto exchange in China, and it’s primarily used for trading, storing Bitcoin and other cryptos, and obviously – mining.
The exchange features around 100 currency pairs at our disposal. The most popular cryptos by far are Bitcoin and Litecoin, but the real crowd pleaser is different layouts designed for different operations, like BTCC Pro for margin traders, CMY Spot Exchange for dealing with Yuan (Chinese fiat currency), or even BTCC DAX if you want to trade with Ethereum.
As of 2022, BTCC became a reliable crypto futures platform, with a Lithuanian cryptocurrency license, offering services in Europe. This includes the custodian license as well. BTCC is great for investors looking for large volume and high liquidity, relatively low fees, and top-notch security and reputation. As for downsides, BTCC is primarily focused on a small number of well-known cryptos in high volumes. If you want more exotic and less popular cryptos we advise you to try elsewhere.
This exchange started out in 2011, and at the time it was one of the rare places where users could trade Bitcoin. Unlike many crypto exchanges, Bitstamp is truly beginner-friendly and if this is your first venture into the world of cryptos we wholeheartedly recommend this exchange. The user interface is intuitive and easy to grasp, but do remember that Bitstamp offers significantly fewer cryptos that its main competitors – around 60.
Transfer fees are relatively low, starting from 0,50% and going down as trading volumes go up. Additionally, beginners will be pleased to know that low fees do not require advanced trading settings. Being one of the oldest exchanges, Bitstamp enjoys a good reputation among traders, but it offers limiting staking options, with only a few cryptos viable for staking. Also, margin trading and lending are not supported at the Bitstamp exchange.
The exchange has a decent mobile app for iOS and Android, making it possible to trade cryptos on the go using your Bitstamp account wallet. Opening an account is easy, taking up to ten minutes top. Reminder: in order to pass the KYC procedure we advise you to prepare your government-issued documents in advance.
Bitstamp has excellent 24/7 customer service you can reach via phone and live chat, and if that’s not enough, you can turn to a very extensive exchange help section. In conclusion, Bitstamp may be short in advanced options and exotic cryptos, but it is superb for basic, everyday use.
If you want to trade with an extensive range of cryptos and try some copy trading, CFD trading, and naturally – spot trading, then Bityard might be the best solution for you. It’s active since 2014 and over the years it acquired some seriously high-profile licenses and it’s regulated in several countries, including the USA.
The platform has over half a million users and a string of state-of-the-art security protocols, including a number of cold wallets for storing cryptos offline. The exchange has multiple licenses and partner companies such as Banxa, a fiat provider, which enabled investors to buy cryptos directly, using nothing but their credit cards.
Beginners are encouraged to join thanks to Copy Trade feature, which allows rookies to copy what trading veterans do, and learn in the process. All of that, of course, is for a small margin limit imposed by the investor willing to be copied by other users. Butyrate has a very interesting affiliate program where a trader is entitled to a 40% commission on the trading fees.
Bityard supports around 60 fiat currencies and is a well-made mobile app designed for iOS and Android operating devices. Unfortunately, you can only withdraw cryptos, not fiat money. If ever in doubt, feel free to turn to customer support via email and live chat. Bityard fees range from 0,025& to 0,1%.
Similarly to Bityard, eToro also encourages its users to mirror chosen traders with an impeccable trading records. This innovative platform was founded in 2007 and it has more than 20 million clients in 140 countries, with the USA being one of them. In 2022, eToro allowed US users to deal with NFTs and stocks.
The minimum trade amount is $10 and if you want to use CopyTrader and mirror what successful traders do, the amount jumps to $200. There’s no crypto-to-crypto trading, but Americans can convert the five most popular cryptos, from Bitcoin to Stellar.
Email and ticket support leave a lot to be desired, and transaction fees are relatively lenient – no commission for ETFs and stocks, and 1% on crypto trading. You can use your own digital wallet at eToro, but you can not withdraw cryptos you have already deposited to your eToro account.
As for the downsides, eToro supports around 40 cryptos and it’s not available in all countries. The support is not something to brag about, namely email and ticket support, while chat and phone are reserved for eToro club members.
Top Decentralized Cryptocurrency Exchanges
Here are some of the most popular decentralized exchanges, which we generally recommend to more experienced users. This is not to say that beginners can not join and have it a go, they just need to be realistic about the whole thing and start slowly rather than hastily, in our humble opinion.
DODO is built on Ethereum and Binance Smart Chain trying to make DeFi liquidity accessible to all users. Compared to other DEXs, DODO is using its own market maker algorithm, claiming better liquidity and price stability.
DODO uses a utility token of the same name which can be used for many things: Crowdpooling, IDOs, staking and mining rewards, and governing the exchange platform. Out of a total of 1B of tokens, there are over 400M tokens in circulation.
DODO has some truly innovative features, like its private pool, vending machine, and NFT vaults, packed in a neat interface fit for beginners.
Uniswap is a DEX that allows both trading and staking. It is fairly easy to use and US citizens are allowed in, with relatively low fees of 0,3%. Like many other exchanges, it is based on the Ethereum blockchain and it easily surpasses several billions of dollars in daily trade.
Its’ key features are a very simple user interface and the ability to swap over 600 digital coins. One can see why Uniswap became so popular. It rewards users that provide liquidity, and people can trade cryptos that are not even on Uniswap’s list. Crypto veterans can trade directly on the blockchain, while intermediate users can earn nice passive rewards just by providing liquidity. In addition to low fees, Uniswap is a great exchange for medium to high-profile users.
Reminder though – be aware of fraudulent tokens since DEXs like Uniswap are their primary target. Be very careful when delving into the unknown. Unfortunately, you need a digital wallet, and it can be hard to understand if you are a rookie.
Uniswap does not accept fiat currencies, it has no mobile app and no insurance against hackers, fraud, or other losses.
If you are up to yield farming, staking, and moving around stablecoins, you should visit Curve and see what’s going on. With around 50 cryptos and a token market cap of $560M, Curve is the fresh new face in town that offers low fees and versatile swaps, and if this is your thing please, do check it up.
Having said that, Curve is not the easiest place to get around so beginners should be very careful, or not try at all. It is hard on a user and it requires some sort of expertise in moving the cryptos around different wallets. However, the great thing about Curve is that you can connect to other DeFi platforms easily and choose from multiple liquidity pools.
The fee on all polls is 0,04%, which is great, but as with other DeFis, it is heavily reliant on the Ethereum blockchain so do expect high gas fees if you plan to move the money a lot. Sadly, there is no mobile app yet, but the APY list looks promising, ranging from 0,47% to 10,19% for Synthetic ETH.
Launched in 2020 and developed by anonymous programmers, PancakeSwap operates on a Binance Smart Chain with over 2 million users trading with tokens produced on the Binance Smart Share.
If you are familiar with Uniswap, this will be a piece of cake because PancakSwap is driven by community management and the opportunity to gather liquidity yields. PancakeSwap’s native coin is named Cake, similar to UNI. The supply of CAKE is roughly around $300M. You can skate CAKE for up to 52 weeks via Syrup Pools, and gather additional tokens over time.
Apart from traditional DEX perks, PancakeSwap has a low slippage and low transaction costs and it offers perpetual trading contracts with leverage. On the nasty side, it has no official support desk whatsoever, no mobile app, and it does not accept fiat currencies.
What Are Margin and Futures Trading?
There are a lot of similarities between margin trading and futures, but a lot of differences as well. Both allow you to control more cryptos than you normally would using nothing but your equity.
Trading with margin results in daily costs due to interest owed on borrowed money, you will get good prices thanks to liquid spot prices, and you can trade with a leverage of three times to zero times over.
If you opt for trading cryptos with futures, that means you are planning for a long-term investment. Quarterly futures contracts can be made without fees, and the basis of a future can fluctuate. Compared to margin trading with cryptos, futures hold higher leverage.
What is a Bitcoin Wallet?
Simply put, Bitcoin or crypto wallet is a digital wallet designed to store your cryptocurrencies. All electronic wallets are divided into two groups: cold wallets and hot wallets. Hot wallets are basically online wallets, with cryptos stored on a particular website.
On the other hand, a cold wallet is a virtual place designed for holding cryptos offline, on your desktop computer for instance.
How To Use Trading Pairs?
Trading pairs work similar to barter systems of tokens, with cryptos being traded for each other over an exchange, and if you are good at it, you could make a profit just by exploiting different transaction fees and their volatile nature.
This is huge because some cryptos can be bought by other cryptos alone, and when you add the notorious volatility cryptos are known for, this opens a window of opportunity for the most talented and dedicated traders.
Another big deal is that you do not longer need to sell crypto for fiat money, just so you could use that fiat currency to buy another cryptocurrency. Trading pairs allow users to reap the benefits of lower transaction fees and to move around their cryptos without the need to convert them into fiat money.
The best-known training pair is Bitcoin/Ethereum combo, obviously.
How to Earn Crypto Rewards?
There are plenty of ways to make money just by managing your e-wallet and your digital assets. In this section, we will list the most popular ways to gain new assets. Just remember that as time passes, new forms of earning cryptos are bound to emerge.
- Some exchanges will give you small incentives by learning alone, most commonly by watching a video guide or tutorial of some sort.
- Buy and hold cryptos pegged to the American dollar, such as USD Coin, or USDC. It’s very similar to bank savings with interest rates.
- With bank savings interest rates sinking below the historical minimum, you could lend some of your money and get around 4% APY – a rate no bank can match at this moment. Just remember that crypto deposits are not insured like fiat currencies.
- Staking is always an option. If you decide to “lock” your assets for a certain period of time and put them into a staking pool, you will be rewarded. This is a far better solution than leaving your money to just lay around. This is probably the best move for people planning to store and save their cryptos for a longer period.
How To Choose The Best Crypto Exchange
Finding the best crypto exchange with the lowest trading fees is an extremely individual process. The best trading platform for you might be the worst crypto exchange for someone else.
So in order to make the right choice, we advise you to take some time and carefully study what a particular exchange has to offer. The most important thing you must consider when choosing a crypto exchange is:
- Crypto offer
- Investment possibilities
Another crucial factor is your digital wallet or how your cryptos are stored and whether you can take custody of cryptos by transferring them to your personal hot or cold crypto wallet. As you already know, the best crypto exchanges come in two shapes, centralized and decentralized.
The former is known to be fairly regulated and designed to match government authorities and regulations in the financial sector. As such, they often demand full identity checks, deposits made in fiat currency, probably the US dollar, and other security measures. The latter are unregulated exchanges found on user-owned distribution nodes.
They have no supervising authority. No one can force you to buy or sell using an intermediary since you sell or buy directly from another person. For an accustomed user, decentralized exchanges may sound dangerous and risky, but they offer unparalleled transparency and data security.
In addition, you will always be in full custody of your e-wallet and crypto assets found within. Good luck and gamble responsibly!
Why do transaction fees exist in the world of crypto trading?
Fees are necessary in order to reward miners responsible for your transaction. Active miners not only mine for new cryptos, but they are also validating and confirming your transactions at the same time, investing enormous amounts of computing power and electricity. Fees are a way to compensate for their effort and energy loss.
What are crypto loans?
Many exchanges offer crypto loans as collateralized products. In most cases, users must deposit from 100% to 150% in cryptocurrency collateral in order to borrow cryptos or even cash money. Similar to everyday loans, the crypto loan is burdened with an interest rate, depending on the crypto exchange, and the user has to pay monthly installments.
What is the difference between Bitcoin and Bitcoin Cash?
In 2017 Bitcoin Cash (BCH) evolved as a hard fork from the Bitcoin blockchain network. At the time, if they had BTC in their wallets, users could access the same amount of BCH. However, Bitcoin and Bitcoin Cash are two completely different cryptocurrencies, and BCH primarily focuses on faster transactions in every block.
Can I cancel my crypto sale or purchase?
No. Selling and buying happen almost instantaneously, and canceling them is not an option.
What is a smart contract?
It is a form of digital contract. It secures and protects the data, controlling the transaction automatically with no need for a third party. They stored data that can be easily tracked, but it can not be changed.
How can I make my own crypto exchange?
First, you need a crypto exchange slot script. It is used to “replicate” the exchange you want to create using the existing crypto platforms. They cost from $1,500 to $4,500, depending on how many features and custom tools you want to host. Of course, this is just one step in the long process, albeit probably the most important one.
How many cryptos are there?
More than 2,000 cryptocurrencies can be found on all exchange platforms. If nothing drastically changes in days to come, we can expect new cryptos to emerge as time passes by.
What is DeFi?
DeFi stands for Decentralized Finance, and its main purpose is to eliminate third parties and centralized institutions from all financial and crypto transactions. DeFi is comprised of software components, stablecoins, and a lot of hardware that enables the apps to be developed.
The best example of DeFi can be found in many online casinos, especially pure crypto casinos that offer peer-to-peer transactions. So, if you visit your favorite crypto casino and buy fiat currency for cryptos, you are essentially dealing with decentralized financial operations, a.k.a. DeFi.