The cryptocurrency world is quickly expanding, but many people still don’t know what it’s all about. If you’re looking to get more involved in the industry, this comprehensive guide will give you everything you need to know about cryptocurrencies.
What is a cryptocurrency exchange?
A cryptocurrency exchange is a website that allows you to buy, sell and trade cryptocurrencies. Since any singular authority does not control these exchanges, they can be very different depending on the types of coins available for trading.
For example, some platforms only support Bitcoin while others offer hundreds of unique currencies – including popular coins like Ethereum or Litecoin and newer altcoins. In addition, there are even smaller sites called decentralized exchanges where users act as their middlemen (and women) instead of relying on an external party to broker transactions. For example, the bybit is a social crypto exchange and currently supports Bitcoin, Litecoin, BCash and Ethereum.
How does it work?
When you buy cryptocurrency, you are requesting a transaction from the exchange. When it comes time for that order to be completed, the site will match your request with someone else’s purchase of an equivalent amount at that same value or within that price range. This is how almost all cryptocurrency exchanges work across pretty much every platform available today.
To make things more complicated, not all transactions are created equal. Some currencies cost significantly more to transfer than others due to network congestion and transaction fees (the latter being another name for trading charges). The good news? You can usually find out which options have cheaper rates by simply checking on the coin market cap before choosing where to send money.
What types of cryptocurrencies exist?
There are thousands of different cryptocurrencies available today. Of course, the two most popular and well-known currencies, which you’ve likely heard of before, are Bitcoin and Ethereum – but there is a long list of various options to choose from as well.
While many people think that cryptocurrencies like Ether or Ripple serve an identical purpose to platforms like PayPal or Venmo (to transfer money between accounts), this couldn’t be further from the truth. Such digital assets were created with certain specific functions in mind rather than simply serving as another currency option for users worldwide to trade on cryptocurrency exchanges.
If you’re interested in getting involved with the cryptocurrency industry, there are a lot of options available to choose from. So what are you waiting for, go and start today itself.