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TYPES OF CRYPTOCURRENCY EXCHANGE
A cryptocurrency exchange is an online marketplace which allows users to buy, sell, and trade cryptocurrencies. Crypto exchanges are similar to online brokerages and digital money markets, but most of the currencies supported are cryptocurrencies. There are four types of cryptocurrency exchange and they are, as follows.
1. Centralized Crypto exchange (CEX)
A centralized exchange is a platform which acts as an intermediary between buyers and sellers and operated by a single entity. Like a traditional bank, the centralized crypto exchange platform uses an order book system to initiate crypto prices. Here, funds are deposited into an account by the users, which acts as a custodian of those funds. The funds are handled fairly and securely by the platform. The crypto exchange platform executes trades on behalf of the buyers and sellers.
2. Decentralized Crypto exchange (DEX)
Decentralized exchange platforms take a different process to facilitate the buying and selling of digital properties. Decentralized crypto exchange platforms leverage self executing smart contracts, instead of employing an intermediary organization. In this framework, the buyer or seller has the control of their private keys and cryptocurrency funds. Most DEXs have no risk on credit default.
3. P2P Crypto exchange
A P2P crypto exchange is a platform which allows users to trade without any intermediates. Here, buyers and sellers can facilitate trades on their own without involvement of central authority. Anonymous individuals or miners verify and approve each and every transaction, This helps in the constant operation of blockchain . It gives total autonomy to users.
4. Derivative Crypto Exchange
A crypto derivative is a financial instrument which helps in deriving the values of underlying cryptocurrency ( Bitcoin or Ethereum). These derivatives are contracts that determine the exchange of assets between the two parties in the future, with the exchange’s value tied to the underlying cryptocurrencies cost.
These all are the four types of cryptocurrency exchange. If you have any interest in investing in cryptocurrency exchange, contact us without any delay and speak with our experts for guidance. We offer all types of cryptocurrency exchanges and provide solutions for all your cryptocurrency exchange development needs safely and securely with our 100+ blockchain experts and cyber security team.