What is an exchange?
During the past months, we have been publishing different posts in which we have tried to explain, in a simple way, the secrets that the technology of the moment hides. What is blockchain? What is a token? What are the blockchain events that you can’t miss?
With christmas just around the corner, today we bring you as a present, a post about exchanges and the different types you can find. If you feel lost when you hear something about this topic, this is your post. Keep reading, one can never know too much.
Exchanges, the 21st century barter
An exchange is a digital platform where exchanges between digital cryptocurrencies are made for fiat money, merchandise or other cryptocurrencies. It is important to clarify that in these exchange markets, the price that sets the value of cryptocurrencies is established, always depending on supply and demand.
This virtual space allows to carry out actions of purchase and sale of cryptocurrencies. However, many platforms allow trading with shares or any other type of financial title that is accepted by the country where the operation is carried out.
What’s the key? To be on alert. It is a market that goes very fast and in which you can obtain significant profits thanks to the variations that arise from the price. Exchanges have managed to boost the economic and financial life of these virtual currencies.
Nowadays, this 21st century barter allows you to easily exchange fiat money for cryptocurrencies and vice versa regardless of the location. You can be in Costa Rica, lying in a hammock while doing transactions. Pura vida.
Since in 2009 bitcoin did its big appearance, cryptocurrencies have become a real revolution and have created and unstoppable movement. Not long after they appeared, the first cryptocurrency exchange was developed, which was presented in the Bitcointalk forum by the user dwdollar whom was called by Bitcoinmarket.
This platform would allow you to exchange bitcoins for dollars and speculate about their value. This project served as inspiration for other similar platforms to create movement between cryptocurrencies.
Despite of having suffered many inconvenients and several hacks throughout history, cryptocurrency exchanges have found their place and have evolved in terms of security and services over time. Currently, we can find many options such as Binance or Kraken, platforms that arise with a clear objective: to give high quality to cryptocurrency users, known a traders, worldwide.
Types of exchanges
These kind of platforms are similar to traditional stock exchanges, which allow users to buy and sell tokens according to the market of these cryptocurrencies. In this case, exchanges work as intermediaries, who usually charge a commission for the service.
Currency exchange fiat-crypto-fiat
These exchanges allow you to buy with fiat money and cryptocurrencies like Bitcoin; Coinbase GDAX and Kraken are clear examples of this. In addition, they can be classified in those that are controlled by third parties, as well as in decentralized exchanges. EtherDelta is another clear example of a platform without intermediaries.
These platform allows you to buy and sell cryptocurrencies at the price set by the exchange (the market price and a plus). This is done, for example, by Coinbase.
Shapeshift cryptocurrency brokers
This is the least messy alternative for new traders, so the commission is usually a little higher than what you would pay in a traditional exchange.
Direct trading platforms
These exchanges between buyers and sellers don’t use a platform like GDAX does. Such systems don’t usually use a price set by the market.
Funds are cryptocurrency assets, professionally controlled, that allow you to publicly buy cryptocurrencies. One of the most famous is GBTC.
In OneUP, we are studying the different type of exchanges that exist to use the one that suits better the philosophy of our project.
Written by OneUP Team
OneUP team is working and growing everyday to offer you the best content and to keep you updated.