The popularity of crypto investments has got a significant influence on the new generation. With its rising popularity, there arise crypto exchanges. Even though cryptocurrency is a decentralized system where there is no involvement of banks or other financial institutions, it still requires a crypto exchange for the buying and selling of cryptocurrency. Such is the involvement of crypto exchanges in crypto investments. As the popularity increases, so do the number of crypto exchanges. So it is an important area of understanding that will help you in making your crypto investments a successful one.

What is called crypto exchanges?

It is a platform that facilitates the trading of cryptocurrency. It is through these private organizations, buying and selling of crypto coins happens. There are mainly three types of crypto exchanges. They are;

Centralized Exchanges: It is the most common type of crypto exchange where trading can be done more smoother on a relatively easy interface. There is only a single head which controls all the dealings. It is usually the owner of the exchange that holds this position. They facilitate both crypto to crypto trading and use funds from your bank account or credit card companies to trade crypto. WazirX, Binance and Coinbase are some of the popular Centralized Exchanges.

Decentralized exchanges: As the name implies, there is no central entity or company or head that controls the entire trading of crypto. The automation and execution in these exchanges are facilitated through smart contracts and highly secured decentralized applications. The majority of these decentralized exchanges are concentrated on the Ethereum blockchain. Uniswap, Pancakeswap and Compound are some of the famous decentralized exchanges.

Hybrid Exchanges: In Hybrid exchanges. It has got the characteristics of both centralized and decentralized exchanges. In this type of exchange, users are given access to their private keys to solving scalability issues in decentralized exchanges. It also addresses the problem of high trading fees exerted by decentralized exchanges. In hybrid exchanges, there is no gas fee or taker fee.

Things to keep in mind while choosing crypto exchanges

  1. High security: Security is always one of the denominations to look into in crypto trading through exchanges. You have to choose an exchange that offers high security. Recent years have witnessed several security failures from exchanges. Trust is the underlying factor that makes the relationship between the trader and exchange makes smoother and simpler. The hacking or if any employee of the exchange steals, ultimately the entire loss is suffered by the investor who has left with nothing in the end.Do continuous research before you opt for one. Almost all exchanges describe their security practices on their website. The first and foremost thing to keep in mind is that nothing is one hundred per cent secured. Chances of risks are still there with every exchange. In such cases, do take a detailed look at the reviews of the exchange online and if possible try to talk with earlier customers of that particular exchange and get a detailed idea of their dealings and processing.
  1. Jurisdiction: There are strict rules and regulations for every exchange. Not every exchange has jurisdiction in all countries. The majority of exchanges are concentrated only on certain specific target markets. There is a chance that the exchange you choose might not operate in your country. So choose an exchange that operates in your country. When you use a website, make sure you check on their domains as well. In many cases, instead of, we can find a web address like this ‘’ which indicates that that particular exchange works and operate only on British Trading markets. So jurisdiction is an important aspect of exchange selection.
  2. User-friendly: Your familiarity with crypto trading is an important factor to take into consideration while selecting crypto exchanges. Make sure that the exchange you choose will give you a user-friendly experience. It is important to assert that the interface is easy for you to use with your crypto trading familiarity.
  3. Liquidity: Liquidity refers to an exchange’s volume of orders every day which helps the traders in making trades at any time they want. For this, an exchange must either has many numbers of users or users with a high amount of digital assets. If it has got only a fewer number of users, then there may not be enough trading partners available. It is also an important factor during a time of high volatility in the crypto market.
  4. Choices of assets: There are thousands of crypto coins available. Bitcoins and Ethereum are the most popular among them and in most of the exchanges, they make available only these types of popular coins. But the truth is that other crypto coins are more valuable than these popular kinds. But exchanges didn’t trade them. It results in a conflict of choices between the user and the exchange. So to avoid this conflict, check whether that particular asset in an exchange suits your interests. Only then start trading with them.


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