Cryptocurrency Exchanges

What are cryptocurrency exchanges?

Cryptocurrency exchanges are online platforms that help facilitate cryptocurrency trading for a service fee, and this trading sometimes even involves trading a cryptocurrency for fiat currencyWe can describe fiat currencies as government-issued currencies not backed by a commodity such as gold or silver. Most of the paper money in circulation, like the US Dollar or the Euro, can be described as a fiat currency.. Cryptocurrency exchanges act as the only intermediary between buyers and sellers of cryptocurrencies.

A cryptocurrency trade is different from a typical stock trade. In a stock trade, a bank acts as a custodian of assets and guarantees the repayment of those assets. Then, a stock exchange matches buyers and sellers, and a broker issues buying or selling orders on behalf of a buyer or seller. A cryptocurrency exchange takes up the responsibility and risk of all these roles, allowing for trading to take place with high frequency compared to stock trading.