Exchanges are online platforms used to trade on cryptocurrency for another cryptocurrency or fiat currency. Cryptocurrency exchanges act like the traditional stock exchanges, where buyers and sellers trade based on the market price and are charges a fee for each transaction.
Centralised Vs Decentralised
The first exchanges to trade cryptocurrency have been centralised. They made cryptocurrencies, like Bitcoin and Ethereum, accessible to the masses and provided liquidity to the crypto market. Now the number of exchanges has increased and they vary from centralised to decentralised exchanges, both of which have their advantages and disadvantages. Centralised exchanges are easy to access and use and provide tools for margin trading, stop loss and lending. However, as there is one central server, the drawback is that they are vulnerable to hackers and are subject to regulatory pressure. This means they cannot list all ICO and coins/token, so you will find these on decentralised exchanges. Decentralised exchanges are open-source, fast, and you are not required to register with your personal information – enabling traders to remain anonymous and secure. However, these exchanges are less well-known and do not provide the liquidity of the other giants.
We asked our BetterBetting community what their favourite exchanges were:
We are listed on HitBTC, IDEX and Bancor and have applications in with the others.
*Exchanges have been subject to a number of hacks. BetterBetting does not recommend any specific exchange and trading cryptocurrencies is the responsibility of the trader.
Decentralised Exchange Example: Bancor
- Go to https://www.bancor.network/discover and sign in
- Import existing wallet/create your wallet – follow necessary step
- OR connect your existing wallet – make sure you’re logged in to this
*you do not need to sign-in to purchase or convert tokens
- Choose the currency you wish to purchase or “convert” – you can choose whether to input the “pay with” amount or the “receive” amount.
(Using Bancor wallet)
(Using other wallet i.e. Metamask)
- Make sure there are sufficient ETH funds in your wallet to cover the gas. The estimated gas amount will be displayed.
- Click “buy” and the transaction will begin the process on the blockchain.
- You will be provided the “transaction hash”
- Once all steps are completed and verified, the tokens will appear in your wallet.
*if tokens are not shown, enter the contract information on your wallet (contract address, token name and decimals)
And that’s it! Pretty instant and pretty simple!