Has this ever happened to you? You get super interested in this cryptocurrency world but then feel incredibly overwhelmed by how to buy and sell it. Cryptocurrency has been rising at a meteoric pace and capturing people’s imaginations—you might want to learn more, but to a novice, dealing with the unfamiliar platform and the inherent volatility can be a pretty scary thing. How does one even start? How do you make sure you are not getting ripped off? Is this whole thing even legit?
There is a solution Crypto exchanges are online marketplaces that play the part of your entry ticket to the world of digital assets. There are various exchanges where one can trade, each with their own benefits and considerations. We will go in-depth on just how these platforms work, the different options you have, and more importantly, how to choose the right crypto exchange that honours both ease of use and robust security measures.
Get ready then to come aboard and make this journey into the fascinating universe of cryptocurrency with confidence! In fact, we put into your backpack, over the next bunch of sections, all the pro stuff of navigating crypto exchanges.
While the world of cryptocurrency has just taken off, with seasoned and new investors coming in, extreme volatility is always there, it seems to be a playground for just the most loving risk-takers. But don’t be afraid! If you’re ready to board this cool world of crypto and probably enjoy huge returns, at any rate, you’ll need some means to buy and sell—the crypto exchanges.
What is Crypto Exchanges?
How? Through trading your coins for various kinds of assets: from the most traditional form, fiat money, like US dollars, to other digital currencies. There are primarily two types of crypto exchanges available—centralized and decentralized.
Centralized Crypto Exchanges
For all its new entrants, centralized crypto exchanges have been giving them the perfect starting point. Their ease of use is comparable to their traditional stock exchanges. There will always be a form of central authority governing the entire process and hence ensuring the security of the process in a CEX. This breeds trust in the minds of investors. Following are a few of the main advantages offered by CEXs:
Reliability and Trust: Generally, CEXs are most likely to provide a far more reliable and trustworthy environment for trading due to the fact that companies regulate them.
Fiat Compatibility: The CEXs buy and sell cryptocurrency with fiat money, unlike DEXs, making them more approachable to many new investors.
User-Friendly Interface: CEXs also focus on the user experience by providing intuitive interfaces that make trading easy and hassle-free.
Step-by-Step to Buy Sell Crypto with CEX
Funding Your Account: Log into your newly created account and follow the steps to put money into it. You will do this with a bank transfer, debit card, credit card, or UPI in the case of India.
Trade Cryptocurrency: You can view the various cryptocurrencies and execute buy or sell orders according to your trading strategy. Keep in mind that CEXs charge transaction fees for each trade.
Storing Cryptocurrency: Your cryptocurrency is typically stored within that CEX’s wallet by default. However, if you have a large holding, you should consider moving it to a personal ledger-based external cold wallet to increase the safety of the same.
Finding the Perfect CEX Partner – A Checklist for Success Of course, choosing the appropriate CEX among the swarm of available options comes into play. Some major guiding factors include:
Security Features: Go for robust security features like 2FA, encryption, and cold storage of users’ funds.
Availability: Although some CEXs are global, others have regional restrictions. You want to ensure that the CEX of choice is available in your jurisdiction.
Mobile App: Having a functional and user-friendly mobile app makes trading on the go easy.
Customer Support: Competent customer support is critical in helping you out on any issues that may arise while you trade.
Beyond the Convenience: Advantages and Disadvantages of CEXs
Although this makes it a very user-friendly and secure entry point for a beginner, there’s always another side of the coin worth considering
Pros
User-Friendly: The process is smooth and intuitive; thus, they are perfectly tailored for beginners.
Fiat Compatible: Unlike on DEXs, you can buy and sell crypto using fiat money, therefore removing one of the major on-ramps for new investors.
Security: Most of the CEXs have a centralized structure that provides better security measures for trading in cryptocurrency.
Cons
Vulnerability to Hacks: CEXs seem to face threats from hackers all the time, and this makes users’ funds vulnerable.
Limited Control: You do lose some control when you are storing your cryptocurrency on a CEX.
Volatility and Risk: The inherent volatility in cryptocurrency remains a big risk factor for investors
