The role of crypto exchanges to become even more important
in the world of cryptocurrencies
Anyone wishing to enter into the cryptocurrency market requires the services of a cryptocurrency exchange. After obtaining a wallet, it is often the next item on the agenda. Cryptocurrencies have experienced a massive spike in popularity around the world in 2017. As a result, a lot more people are actively beginning to invest in the market. This has made the role of crypto exchanges to become even more important in the world of cryptocurrencies. Before delving into the fiat-to-crypto exchanges, it is important to know what a crypto exchange is.
A crypto exchange is an online website that provides a platform for the buying, selling, or exchange of cryptocurrencies like bitcoin, ether, and litecoin for fiat money like USD, EUR, and GBP.
There are basically three different types of cryptocurrency exchange platforms. The difference is due to what determines the price of the cryptocoin coin on the exchange platform.
Trading Platforms are marketplace where potential buyers and sellers of cryptocurrency can place “buy” or “sell” orders. The buyers and sellers do not interact with each other. Each person only interacts with the platform. The service charges fees upon the conclusion of every transaction.
Instead of interacting solely with the platform, these services connect buyers and sellers directly. There are no fixed market prices as everything depends on the two parties coming to an agreement. The role of the cryptocurrency exchange is to provide escrow and transaction mediation services.
These function like forex broker services. Potential buyers can visit these platforms and purchase cryptocurrencies. Broker sets the price of the cryptocoins.