Can you imagine that there are almost 10,000 cryptocurrencies traded every day? That is an immense number for technology in an infant stage. With the development of these cryptocurrencies, there also has been a growth in the Digital exchange platforms.
But, which exchange is the right one for your needs?
To answer that, it depends on the trading style, risk ability, experience and requirements of a corporation or a proprietary. Other factors include the tools of a platform to support your applied skills. A question you should ask yourself: Am I able to do what I intend to?
So for the rightful pursuit, this article will take you to the depths of a Digital Exchange and educate you to choose the right Exchange Platform for your business needs. Let us start with a basic definition.
What is a Digital Exchange?
A Digital Exchange is a medium through which a trader can purchase/sell cryptocurrency. The platform also gives service to convert the fiat currency to any listed cryptocurrency. For example-
You can convert $ 1000 into Bitcoin or Ethereum based on their current market price (CMP).
So, if 1 BTC = $ 40,761.60, the exchange converts $ 1000 to 0.025 BTC and similarly with the Ethereum. But the most compelling part of the service is that the exchange supports converting one cryptocurrency to another- $1000 worth BTC or 0.025 BTC = 0.337 ETH.
The inbuilt currency converters of some Exchange Platforms let you calculate these pairs after the registration.
So, how does a Digital Exchange operate?
The platform initially takes you through a registration process. A requisite of registering on these platforms is a bank account. The exchange acts as a broker between the bank and the participant.
The platforms deliver tools and UI for the user to interact and trade.
Some platforms provide an integrated wallet service. So, if you wish to cash out your stored currency from a digital wallet, you can. And with the help of the exchange, directly in your enlisted bank.
Types of digital exchange? And what should you prefer?
Based on the advancement of the Digital Exchanges, we can segregate them into three types-
Centralized Digital Exchange (CEX)
The CEX works similarly to a conventional stock exchange, where a third party is an intermediary between the user and the platform. Through a centralized platform, you can purchase cryptocurrency with fiat currency. But in the CEX, you are not the owner of the private keys. And the chances of hacking are high as the control of data is in the hands of a single enterprise.
Decentralized Digital Exchange
DEX is an alternative to the Centralized Digital Exchange. There is no third party involved, and the transactions automate via smart contracts and Dapp (Decentralized Application). The Decentralized Digital Exchanges are highly secured and faster than the CEX. This factor makes it hard to temper or hack. Hence, it provides a successful peer-to-peer trade experience for the user.
Hybrid Digital Exchange
A Hybrid Exchange provides the combination of both types of exchanges listed above. The participant gets the utilities of the centralized system with the freedom and security of a decentralized platform. The hybrids are yet in progress, and we can experience technological advancement in the future for this particular type.
So an important question arises: Which Digital Exchange should you consider? For the above divisional measures: one should push for a Hybrid Digital Exchange due to its security, anonymity, User-friendly interface and prevention of market manipulation.
What to look for while choosing "the right" Digital Exchange?
We cannot recommend just any exchange based on only one factor. Finding a relevant platform with essential utilities will skyrocket your trading experience. Let us discuss some important factors while selecting a suitable Digital platform-
Transparency
The first thing to check in any Digital Exchange is transparency. The platform should have a physical and operational address. One should research the yields of the company and the types of services they provide. Lastly, they should be readily available for customer support in the case of any unfavourable situations.
Security
Data security and privacy are the most common factors while searching a platform. Initially, if you are going for a decentralized exchange, the transfers take between two parties only. So, the chances of a data breach are low. Ask the question: if the credentials or keys are lost, what is the procedure to retrieve them. The whole security measure relies on who has access to your information.
Transaction fee
Sometimes, the higher cost can provide a better deal. But you should evaluate some points in this factor, such as
You are getting value for your money.
Type of transaction cost: fixed or variable (percentage of the trade).
Accessibility of trading tools w.r.t cost
Fees per type of currency
Take some time to calculate when and where the exchange will charge you based on the service. A basic understanding of the cost factor will help you predict an accurate return of your trade.
Liquidity
For a successful trade, a buyer should be available for a seller to agree on the same price band. The ease of converting any cryptocurrency into fiat currency refers to liquidity. Besides that, one must look out for the trade volumes and volatility. If the liquidity is high with the increasing trade volume, then there is a chance you will receive an appropriate value on your trade.
Access to Coins
Everybody has a choice to make while trading cryptocurrencies. But, with thousands of new coins in the market, it is tricky to select the desired product. A suitable exchange will deliver only trusted and genuine crypto pairs or coins. This aspect is just a preliminary judgement of the facts. Generally, every Digital Exchange provides options to trade in Bitcoin and Ethereum.
Educational Resource
You can be an experienced trader or a novice, but the exchange has to provide an educational resource to enhance the capabilities of its users. It should have a database that includes types of currencies, tools guide, market jargon and trading strategies.
Compliance
Crypto exchange must meet all the regulatory requirements, including AML (Anti-money Laundering and KYC (Know- your-Customer). These factors ensure the platform is secure and ready to operate online with its full-fledged services. According to the CipherTrace study, if an exchange has weak customer authentication, it is viable to the cyber-attacks.
Blockgration and DX Platforms
With cutting-edge blockchain technology and integration, BHI tends to deliver an interoperable fiat-crypto digital Exchange platform. The exchange has a trade-friendly interface with on-boarding and off-boarding abilities. The intra-asset feature lets you switch and trade between fiat, crypto and listed stocks.
Features of Blockgration Digital Exchange
Advanced infrastructure with user-friendly utilities
An education forum for tutoring and nurturing beginners as well as experts
Access to trade mainstream cryptocurrencies, security tokens and securities
A digital wallet service with customer support
Unique marketplace for STOs (Security Token Offer)
Secured storage for private keys
Lightning-fast OMS (order management system) with institution-grade order types
It also provides an Asset Manager with a diverse background to initiate ease in the trading process. Also, you can rely on the Risk Management System(RMS) that controls mistaken trade orders and execution.
Blockgration is one of the few Digital Exchanges that provide B2B PaaS (Platform-as-a-Service). With all the above factors in consideration, Blockgration is ahead of its competitors for the long term.
Final Takeaway
A cryptocurrency marketplace can sometimes be volatile. So, before trading/investing in any Digital Exchange, consider the above factors for a better assessment. The next thing to consider is educating yourself on different topics of blockchain and cryptocurrency. The more you learn, the more you earn, and this fact applies to every industry. Look for the factors like authenticity and stability. The registration process must be fast and hassle-free. The platform must offer a transparent control and integral database.
Real-time data is also a significant factor while trusting a platform. Trading is a complex process, so while choosing an exchange, you must go for the ones that support genuine currencies, updated prices, trade-friendly UI and top-notch security with AML and KYC.
We hope the above information is apt for guiding you through your trading journey. For more information and details of services on Blockgration Holdings, visit the website here.