Going through several series of dynamic changes, the concepts of money and money exchange have evolved over time. Initially, we worked with the barter system wherein one’s goods were exchanged for another’s. Eventually, we came to use fiat money, which, for a long time, we have been using as a medium of exchange to buy or sell goods and commodities. Today, while we still use fiat money, we are pursuing something called cryptocurrency development which represents value in the digital space.
It refers to a business or an online platform that enables the exchange of digital currencies for other assets or other currencies. Cryptocurrency wallets act as both the receiving and the sending end of the digital value. If the user wishes to withdraw it as fiat money, he or she may avail certain unspecified cards which can be used in ATMs to do the needful. While it is not universally adopted yet, blockchain app development for cryptocurrencies has been undertaken by several companies and developers around the globe. Many countries have taken interest and some have even announced their national cryptocurrencies.
Types of Cryptocurrency Exchange Platforms
There are two platforms available for cryptocurrency exchange - Decentralized and Centralized.
1) Decentralized Cryptocurrency Exchange
Enabling peer-to-peer exchange through robust layers of security, this platform operates without any central authority. Here, the risk of hacking is minimum. Examples of this platform include IDEX and EtherDelta.
2) Centralized Cryptocurrency Exchange
This one involves the exchange of both fiat money and cryptocurrency. It has full authority over trading and so, we observe limitations in fund transfers. However, such a system offers more liquidity, advanced features, and simplicity in terms of usage.
WorkingTo get started with a cryptocurrency exchange, the user has to first register an account with any of the platforms and then deposit a set amount of digital or fiat currency. After that, by bidding/direct negotiation, the trading software of the platform will match selling and buying orders. Normally, the seller sets a minimum price for exchange. Likewise, the buyer sets a maximum budget for buying a currency.
Security MeasuresWhenever you deal with money, it’s imperative to be extra cautious. There are a number of fake currency exchange platforms which you must avoid. So, make sure to do your research before you delve into this venture.
Here are some considerations before opting for one.
To be on the safer side, it is best to check whether a particular platform is being widely used or not. You might also want to look for positive review and feedback on it to ensure that it is trustworthy. Forums like BitcoinTalk or even Reddit can help you verify the authenticity.
2) Payment Methods
Another important thing to take note of is the availability of reliable and multiple payment gateways. This will impact a lot on the convenience of trading. If you have a platform developed and are unsure about integrating the necessary solutions for payments, you may approach a professional cryptocurrency development company and get your issue fixed!
3) Fees and Exchange Rate
There is a fee attached to all transactions. If the fee structure is not mentioned on the website, you shouldn’t pursue any exchanges there. Also, mind the exchange rate as it keeps fluctuating and it varies from platform to platform. You may take a look at the present rates for cryptocurrencies at Coinranking.
Every platform must follow a system which enables it to identify registrants and authorize them to pursue trading. A robust system in place will dramatically mitigate the chances of scam and money laundering.
While cryptocurrencies have offered us an abundance of opportunities in the field of trading, they have also influenced our lifestyles. We feel more secure and less worried about theft or hacks due to the top-end security that blockchain renders. A pivotal advantage of cryptocurrency exchange is the decentralized form of trading which has not been feasible until now. This makes transactions much faster and more reliable. However, certain considerations must be taken into account while choosing an exchange platform regardless of it being centralized or decentralized. This will ensure that your trading journey is fruitful in the long-term.
If you are interested in building your own cryptocurrency wallet or creating an environment to facilitate cryptocurrency exchange, get in touch with Openwave! We offer excellent services for Cryptocurrency Blockchain Development! Ring us @ +1 (212) 209-1537 or Email: Info@openwavecomp.com