Let's liken cryptocurrency exchange to the regular foreign exchange you know. However, what's traded on these types of exchanges are digital currencies (cryptocurrencies). New to cryptocurrencies? Let's quickly get you familiar with it.
Cryptocurrencies came into existence when someone named Satoshi Nakamoto was fed up of the irregularities of the present financial system. He/she (identity still unknown) wanted a transparent system which isn't easily controlled by a third-party. He needed a way people could send money between themselves without any intermediary. As a result, Bitcoin was born. Well, that's a story on its own. If you want to know more about Satoshi and what led him to create bitcoin, click here.
However, after the emergence of bitcoin (BTC) came many others, such as the Ethereum (ETH), Litecoin (LTC), Monero (XMR), and so on. There are over a thousand of them on the market today.
There are many reasons why different people use cryptocurrency exchanges. I, for example, buy or sell my cryptocurrencies for cash (also referred to as fiat). Some others would trade their cryptocurrencies for another such as Ripple, Monero, and so on. Whatever our reasons are, we all need the exchanges one way or the other. Now, allow me introduce you to the popular ones out there.
Coinbase came into existence in 2012, by Brian Armstrong and Fred Ehrsam. It started as a bitcoin-only exchange. Coinbase has since added a host of other cryptocurrencies on the platform. These include Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, and so on.
The platform has not only earned its name among top exchanges but also made a name among top secure cryptocurrency wallets. The Coinbase wallet helps users send or receive cryptocurrencies securely. Need a place to buy/sell/trade cryptocurrencies? Coinbase is definitely an exchange to consider.
Note: The Coinbase exchange isn't available to all countries at present. Click here to find out if Coinbase exchange is available to users in your country.
LocalBitcoins is a peer-to-peer exchange, launched in 2012 by Jeremias Kangas. It differs from your regular exchange, as the platform only connects bitcoin buyers and sellers locally.
So, if you are looking to buy or sell bitcoin to someone nearby, over a cup of coffee, LocalBitcoins would be where to find that person.
Caution: This platform hosted a high number of scammers in the past. Nevertheless, LocalBitcoins is doing all it can to eliminate this. Be careful when dealing with people on this platform.
Binance was launched by Changpeng Zhao and Yi He in 2017. The platform boasts of being the largest, based on its daily transactions. If you are looking to make cryptocurrency transactions quick and easy, Binance is one of your best options. Binance recently added support for its users to buy cryptocurrencies using their debit or credit cards.
As a new trader, you might find this platform a little confusing, but you sure will find your way around soon. There are a host of resources on the web to help you pass through every huddle.
The Bitfinex platform was also launched in 2012 by iFinex Inc. It's similar to Binance exchange. You can make fiat deposits to buy cryptocurrencies. You can also trade your crypto assets for other cryptocurrencies. Nevertheless, users have voiced their frustrations over slow customer care service issues in the past. Apart from that, I see no reason you shouldn't use the Bitfinex platform.
There are several others - over 250 of them presently listed on the CoinMarketCap website. Listed above are few of the most used platforms today - this makes them highly liquid, with transactions on these platforms carried out in few seconds to a few minutes at most.
Lastly, always keep your cryptocurrencies on wallets you have control over (having access to your private keys), and not on exchanges. Or if you must, save a little for your daily transactions. You don't want to lose your cryptocurrencies to cyber attacks.
You might also want to consider trading on DEX (Decentralized Exchanges). Here's a guide that introduces you to that and takes you through the process.