Before you choose an exchange to buy digital currencies, you should know what that platform is. These exchanges facilitate the buying, selling and trading of crypto-currencies and tokens.
You may ask: is there a way to do this directly with someone else? Yes, it is possible, however, it is necessary to trust the seller, especially when sending the amount in fiat currency or other crypto-assets in advance.
To avoid the risks, coin exchanges have emerged. They have copied the model of traditional brokers, charging fees in exchange for this intermediation and settlement service. In addition to the fees, there is a legal and juridical cost to maintain the structure needed to operate properly, in compliance with the relevant legislation.
Types of crypto-currency exchanges
Exchanges are platforms dedicated to buying and selling crypto-currencies. This is the case for example with Quantum Ai. There are three types, including :
1. Brokers
Crypto-currency brokers often offer the easiest and most convenient way to buy digital currencies. The problem is the cost. After all, not only will you pay a higher than market price for your crypto-currencies, but you will also have to pay a transaction fee.
2. Trading platform
Platforms connect crypto-currency buyers with sellers and charge a fee to facilitate each transaction. Here, you can trade crypto-currencies at the current market rate or at a specified threshold.
Alongside this, the model tends to provide access to a more diverse range of currencies than brokers. In addition, they often provide charts to help you plan your trades.
3. Peer-to-peer (P2P) trading
These platforms allow for direct (P2P) trading between people around the world. The exchange acts only as an intermediary, as the seller can set their own price and accept payment methods.
How do I choose an exchange to buy digital currency ?
The first step in choosing an exchange is to research its reputation, availability and membership. Another important step is to check the liquidity, the volume traded on the main assets.
The first step in choosing an exchange to buy digital currencies is to research their reputation. However, it is very common for inexperienced customers to opt for exchanges with lower rates and forget to take into account that in times of strong fluctuations, the price tends to be far away from the leaders. Finally, be sure to check fees, as well as deposit, withdrawal and transfer limits. Often this information is available on the exchange’s website.
No official regulation
Some measures have recently been announced by the Chinese government on crypto-currencies and have impacted, for example, the price of bitcoin. In addition, in Turkey, for example, the government has made it illegal to operate crypto-currency exchanges.
Bitcoin has no specific regulation in the country, for example, but it is not illegal. Investors can not only own and trade crypto-currencies on the market, but they also have to declare the gains from the investment based on the monthly amount traded.
There are, however, specific codes to be used in the tax return, making distinctions between bitcoin, altcoins (as most other cryptos are called) and stablecoins (crypto-currencies whose value is set at the price of a fiat currency, such as the real). It is important to know these codes and how to use them.
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