There are three main types of cryptocurrency exchanges: centralised exchanges (CEXs), decentralised exchanges (DEXs) and hybrid exchanges (HEXs).
Centralised exchanges are the most popular type of exchange, as they offer a easy-to-use platform for buying and selling cryptocurrencies. CEXs are centralised, which means that they are controlled by a single entity. This centralisation makes CEXs susceptible to hacking and theft.
Decentralised exchanges are designed to be more secure than centralised exchanges, as they are not controlled by a single entity. DEXs can be difficult to use for those new to the cryptocurrency world.
Questions to Ask to Yourself When Choosing a Crypto Exchange
What are Your Trading Goals?
Hybrid exchanges are a mix of centralised and decentralised exchanges. They offer the security of a DEX with the ease-of-use of a CEX. However, not all hybrid exchanges are created equal – some are more centralised than others.
Before you start using a crypto exchange, it’s important to know what your trading goals are. Are you looking to simply buy and hold cryptocurrencies, or do you want to actively trade them? If you’re looking to trade, then you’ll need an exchange that offers features such as margin trading and advanced order types.
What Currencies do You Want to Trade?
Not all crypto exchanges offer the same coins. Some exchanges only offer a handful of major cryptocurrencies, while others offer hundreds of different coins. Make sure that the exchange you choose offers the coins that you’re interested in trading.
What Payment Methods are Available?
When you’re looking for a crypto exchange, you’ll want to make sure that it offers a payment method that’s convenient for you. Some exchanges only accept bank transfers, while others offer a variety of different payment methods, such as credit cards, PayPal, and even cash.
What are the Fees?
Each crypto exchange has its own fee structure. Some exchanges charge a flat fee for each trade, while others charge a percentage of the total trade value. Make sure to compare the fees of different exchanges before choosing one.