This guide shows you what a crypto exchange is, how it works, which one is the best, and how to make money with cryptocurrencies in 2021.
What is the crypto exchange?
The crypto exchange is a platform that offers various services related to cryptocurrencies.
The main one is purchasing and selling crypto assets that the trader can later save in the wallet.
Through the crypto exchange, with supply and demand, the price of the cryptocurrency is established.
How does a crypto exchange works?
Traditional cryptocurrency exchanges require a third agent, acting as an intermediary, to carry out transactions.
On the other hand, P2P platforms are characterized by their decentralization.
Traders can trade directly with each other.
The operation of crypto exchanges is based on two processes:
- The purchase: the user can search in the order book or create a purchase order, in which he indicates how much he is willing to pay;
- The sale: the sale order is specified, with the quantity and the price and it is recorded in the order book.
The payment method depends on the exchange.
An investor must follow these steps to invest in a crypto exchange:
- Register on the platform;
- Identify yourself using a supporting document;
- Incorporate a fiat currency or cryptocurrencies in the portfolio to start operations;
- Buy and sell cryptocurrencies.
What is the best crypto exchange?
The best cryptocurrencies exchanges contain the following features:
- Intuitive interface;
- Safe storage of assets: multiple layers of protection, implementing the most innovative technologies;
- Help from the company.
Through a crypto exchange, the user can generate passive income and achieve financial freedom.
What is the cheapest crypto exchange?
The investor must take into account that each crypto exchange establishes a commission for operational costs.
On the other hand, there are transaction fees, a fee charged by the blockchain network.
The blockchain explains the reason for its rate:
“Every cryptocurrency transaction must be added to the blockchain […] to be considered a valid and successful transfer.
Miners, who are powerful computers that make up a part of the network, validate transactions and add them to the blockchain.
Miners spend large amounts of energy to obtain a financial reward: with each block added to the blockchain, they add a bonus, as well as all the fees of the transactions that were confirmed.
For this reason, miners have a financial incentive to prioritize transaction validation that includes a higher fee”.
Through the blockchain, crypto assets operations work.
How to make money with Crypto Exchange?
Barone Enterprise offers a bot, which operates on the crypto exchange.
CryptomaticTrader® is an exclusive service with which the client has full control of his capital.
In this way, you can generate income in your own exchange.
You only need to provide the trading APIs to Barone Enterprise and own a certain amount of bitcoin and tether on the exchange.
The bot will carry out buy and sell operations to increase the client’s capital in the wallet.
Fully automatic, the user can withdraw the money whenever he wants.
How can I trade cryptocurrencies without fees?
Exchanges charge commissions for cryptocurrency transfers.
Generally variable, depending on the volume of transactions.
They have limitations and cannot compete with the big exchange platforms, where the trader can find the best buying and selling opportunities.
What is the best cryptocurrency to invest in in 2021?
The volatility of the cryptocurrency market is the characteristic on which your financial investment is based.
The supply and demand of traders is what sets the price of assets.
Bitcoin (btc) is the most important cryptocurrency on the market.
Its maximum value dates from the beginning of February 2021 ($ 45,561).
Its capitalization is much higher than that of the rest of crypto assets.
An investor must find the opportunity in a market made up of more than 2,500 cryptocurrencies.
Ethreum, tether and XRP are the three most stable cryptocurrencies, after bitcoin.
The rest of the list goes up and down in position daily.
Are crypto exchanges safe?
Cryptocurrency exchanges must ensure protection in traders’ transactions.
For this reason, it is crucial that, after the exchange platform, a company responds.
In the following infographic, there are the main problems that users see in exchanges.
At 40%, security is the main problem, followed by the price of transaction fees (37%) and lack of liquidity (36%).
Only 9% of users have no problems with exchange platforms.
Can cryptocurrencies be converted to cash?
Yes, crypto-assets can be converted to cash.
In fact, a cryptocurrency is real money in digital form.
In recent years, bitcoin ATMs have been installed in different countries.
The United States, Canada and the United Kingdom are the three countries with the most ATMs.
In the case of the US, the amount is much higher than the rest of the list.
If divided by continents, the proportion is as follows:
- North America: 73.31%;
- Europe: 20.36%;
- Asia: 4.11%;
- Oceania: 1.79%;
- South America: 0.32%;
- Africa: 0.11%.
Is it legal to own bitcoin?
Owning bitcoins (btc) is legal.
In 2013, the United States Department of the Treasury Financial Crimes Enforcement Network (FinCEN) released the Application of FinCEN’s Regulations to Person Administering, Exchanging, or Using Visual Currencies.
In it, it defined bitcoin as a decentralized virtual currency, which operates within the law.
The European Union considers bitcoin as a virtual currency, external to their monetary policy.
The crypto exchange is a platform in which users can carry out crypto-asset transactions.
From this guide, you can draw the following conclusions:
- The trader keeps his capital in a wallet;
- Supply and demand establish the price of crypto assets;
- There are traditional investment platforms and P2P ones;
- The payment method depends on the exchange;
- The characteristics that exchange platforms must meet are: security, transparency, flexibility, functionality, accessibility and monitoring;
- Security is what most worries users who operate on exchanges;
- Bitcoin is the most ‘powerful’ cryptocurrency on the market. Its capitalization is outstanding compared to the rest of crypto assets;
- You can convert cryptocurrencies into cash through ATMs;
- Bitcoins are considered real money.