If you have kept up with the news in both tech and finance over the last year and change, there is a good chance you have heard about the explosion in the cryptocurrency market. While it has slowed in recent months, the total market cap in the industry reached a peak of $800 billion in early 2018.
This huge growth piqued the interest of a lot of people. Many of which were interested in joining the market in hopes of sharing in the spoils. However, the first step to actually being involved in the industry is learning about exchanges and how they can work to help you buy and sell cryptocurrencies.
If you are new to the space and don’t quite understand how these exchanges work, you’re in luck. This article is going to guide you through the process of how cryptocurrency exchanges work and how to get started with them.
How Do Cryptocurrency Exchanges Work?
Cryptocurrency exchanges are platforms that can help match buyers and sellers of cryptocurrency in one convenient place. Besides the matching, it allows them to trade with one another. Each exchange will set the rate of cryptocurrencies based on the actions of both sellers and buyers, who (with supply and demand) will set the market rate. Think of them like a regular stock exchange but instead of buying and selling stocks, you are doing so with cryptocurrencies.
Different exchanges will also have different features and functions. Some are made to strictly serve as a place for people to trade assets, while others are more focused on helping people purchase crypto with fiat currency. Most exchanges have fees associated with them. They also publish their fees clearly on their website.
If you want to learn more about the ins and outs of how exchanges work or anything else in the crypto space, there are many helpful online resources, one of them being Theycallitcrypto.com, that will be able to help.
How to Start Trading on a Cryptocurrency Exchange
Now that you know a little about how these exchanges work, you might be interested in buying, trading or selling cryptocurrency using them. In an effort to help make that process easier, we have decided to include a little how-to guide on getting started with a cryptocurrency exchange.
Step 1: Compare and Choose an Exchange
Before you ever sign up for an exchange, you need to put in your due diligence. You need to read reviews of various different exchanges and see which has the currencies that interest you and fees you are comfortable with. You should also never open an account or start trading without knowing the risks and volatility within the industry itself.
Step 2: Register and Verify Yourself
Once you have selected your exchange, you must register for an account. Once registered, most exchanges will ask you to verify your identity, as this helps protect the security of their exchange. This could be anything from you sending a photo of yourself next to a passport photo or providing them with a photo of you holding a unique verification code.
Step 3: Fund Your Exchange Account
Once verification has been accepted and your registration has been successful, you will need to fund your account on the exchange. The method you use will vary from exchange to exchange but is usually done through either a credit card transactions or a transfer from a bank account.
Step 4: Start Buying, Selling and Trading
Once your account is funded, you can choose which cryptocurrency to buy very easily. From then on, you will be able to sell, trade or buy more at any time.
Hopefully, this article has helped you understand how cryptocurrency exchanges work and how to get started using them if you want to buy, sell or trade crypto assets.