Cryptocurrency exchange platforms
Exchanges for cryptocurrencies are platforms for trading digital currencies and fiat currencies for cryptocurrencies. By charging commissions and transaction fees, cryptocurrency exchanges act as intermediaries between buyers and sellers.
Various types of cryptocurrency exchange platforms
Here we discuss two types of Cryptocurrency Exchanges;
A centralized exchange is the first and most common exchange type. Businesses included in this category are Coinbase, SouthXchange, Binance, and Kraken. Private companies offer platforms to trade cryptocurrency through these exchanges. In all exchanges listed above, trading is active, volumes are high, and liquidity is plentiful. Therefore, Bitcoins do not support centralized exchanges. Private servers give them access to external networks, which can exploit. It could be possible for the entire company’s system to be shut down if the servers are compromised. A greater risk would be the release of sensitive user data.
For new users, centralized exchanges that are more popular and larger provide an easier on-ramp, and they even offer some level of insurance if their systems fail.
Exchanges that work decentralized
The decentralized exchanges function similarly to Bitcoin. The control point of decentralized exchanges is not centralized. If you imagine it as a server, except that the computers within it are all spread out across the globe, and each laptop controls its part of it. Even when one of these computers shuts down, the network will not be affected since many computers will continue to work.
One company not controlling a server at a single location is drastically different. An attack on something sprawling and decentralized is much more complex and unrealistic. Those exchanges are not subject to regulatory authority rules because no specific person or group runs them. Governments and regulatory bodies cannot pursue a single individual or group among the participants. As a result, traders are not required to declare their identity and are free to use the platform however they please, whether legal or illegal.
SouthXchange operates as a cryptocurrency exchange in Argentina. In addition to many Brazilian cryptocurrency exchanges (Blutrade, for example). The SouthXchange website does not explicitly state that US investors cannot trade there. It is always advisable to form one’s own opinion about citizenship or residency issues before trading if one is a US citizen. In the 2019 ADVFN International Financial Awards, Southxchange reviews were selected as Best Crypto Exchange in South America.
The advantages of centralized crypto exchanges
· It is easier and more familiar to invest and trade in cryptocurrencies on centralized exchanges than on non-centralized exchanges, not crypto wallets or peer-to-peer transactions, but centralized exchanges, which allow users to log in and see their account balances. In contrast to crypto wallets and peer-to-peer transfers, they make their transactions through apps and websites.
- Centralized exchanges are more reliable and secure than decentralized exchanges. Centralized exchanges provide greater levels of comfort since they streamline the transaction process through a centralized platform.
A list of decentralized crypto exchanges’ benefits
- Decentralized exchanges do not require users to transfer assets to third parties. In this way, a company or organization cannot be hacked, and users are protected from hacking and theft.
- Decentralized exchanges protect users from fake trading and wash trading. Decentralized exchanges allow peer-to-peer trading of cryptocurrencies, protecting them from market manipulation.
- Customers do not need to fill out KYC (know-your-customer) forms on decentralized exchanges, offering greater privacy and anonymity.