When it comes to buying, selling, and trading cryptocurrency, the exchange you select can significantly impact your experience in the marketplace. For beginner traders, their crypto exchange platform can offer serious advantages that make it easier to understand and participate in crypto. Here are a few tips for new traders searching for the best exchange platform.
All cryptocurrency exchanges are either centralized exchanges or decentralized exchanges (DEXs). Regardless of the type of exchange you enter, you will need to ensure that the exchange you select is compatible with the cryptocurrencies you wish to buy and trade with. Not all exchanges will offer investors access to all cryptocurrencies, some exchanges like FTX will offer the most used cryptocurrencies for trade like SHIB, BTC USD, ETH, and more. You also want to select an exchange with ample liquidity behind it. The liquidity of an exchange is essential for minimizing clawbacks and ensuring users can always cash out their investments when it’s beneficial for them. Exchanges with low trading fees, quick processing times, and an array of resources for their users benefit new and experienced traders.
The most popular exchanges out there today are centralized exchanges. Centralized exchanges act as third-party intermediaries between traders. The platform will verify transactions between traders but charge a fee and may slow down the transfer process. Centralized exchanges often also offer users access to a broad knowledge base with resources for new and experienced traders. FTX is an excellent example of a centralized exchange that provides access to popular cryptos, the NFT marketplace, and a massive in-depth crypto knowledge base for anyone to access.
Though centralized exchanges are more user-friendly than DEXs, they are at an inherently higher risk of being targeted by attackers due to their centralized nature. If a centralized exchange is compromised, it will impact many users of the exchange. This requires centralized exchange platforms to implement their own competitive security structures to help protect their users.
Decentralized exchanges, DEXs, are must less popular than centralized exchanges because they are generally not as user-friendly or intuitive. On the other hand, DEXs are not typically targeted by attackers because if an attack were successful, it would only compromise a single user account rather than an entire network of users. DEXs use smart contracts to complete transactions between traders, which means that no additional fees are charged for individual trades. Peer-to-peer trading is a pillar of DEX structures which offers users the ability to quickly move cryptocurrency between users anywhere in the world without fees. Though most of the trading population does not use DEXs, several projects are attempting to create more user-friendly and accessible DEXs for trading. The new Serum DEX by FTX offers a whole new trading experience without third-party fees and a new intuitive design for traders. If you’re planning on trading cryptocurrency daily, you should consider utilizing a decentralized exchange for your business. The money you save on fees alone will be well worth the effort to learn how to use the exchange.
You can join a crypto community today like FTX to learn more about the differences between centralized and decentralized exchanges and the benefits each holds for you. The exchange you select will impact your trading experience every time you enter the marketplace. Be sure to research to find an exchanges the benefits and functionality you need to reach your financial goals in the crypto world.