Different Types of Exchanges

 

Fiat – Crypto Exchanges

These exchanges allow you to buy a cryptocurrency directly using your fiat currency (a government-issued currency like US dollar or Pound). These are most popular with new users who are yet to explore the crypto market because it offers easy access to the cryptocurrency of their choice without much difficulty.

The issue with these exchanges is that they have little support and they offer less number of choice of coins. It is used as just an entry point by beginners.

Crypto – Crypto Exchanges

These exchanges allow you to trade a cryptocurrency for another cryptocurrency. It means first you need to buy a cryptocurrency on a fiat–crypto exchange and then transfer it to the wallet of the crypto – crypto exchange and then trade for the coin which you want to buy in the first place.

This is done by experienced traders who are actively trading between coins to profit quickly or want to buy smaller less known coins.

Peer-to-Peer Exchanges

In these exchanges, a buyer is matched with a seller and they exchange currency at their own agreements. Like one of the exchange Localbitcoins, where they match a buyer with a number of sellers, where the buyer has the option to choose the best price of the selection.

Also, they normally offer an escrow service( a financial arrangement where the third party holds and regulates the payment of the funds for two parties involved in a given transaction ) so that there is reduced risk for both buyer and seller.

Brokers

In these exchanges, you can buy cryptocurrencies from brokers directly. The brokers set their own prices which could be higher or lower than market price. Here you need to be careful before trading with the

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