What are cryptocurrency exchanges and how do they work?

With all the advantages of bitcoin, its basic wallets have a significant drawback - they only allow you to work with bitcoin. Bitcoin Core, Electrum and other wallets cannot exchange it for other digital ones, transfer it to dollars, rubles or some other currency.

And as soon as the price and turnover of the cryptocurrency market reached billions of dollars in dollar terms, hundreds of exchange exchanges appeared. People use them to buy digital currency using bank accounts and electronic payment systems, trade various altcoins (alternatives to bitcoin), make them in fiat money (the money we are used to, issued by the state - rubles, dollars, euros, etc.).

Exchange should not trade against traders

The main principle of the exchange is impartiality. Therefore, the involvement of the exchange in the trading process, not as an arbiter, but as a counterparty, can be dangerous for traders.

After all, traders see in the face of the exchange the guarantor of the fulfillment of obligations in the relationship between the seller and the buyer of fastest growing cryptocurrencies.

Therefore, the exchange does not trade, but organizes trading, being responsible for the operation of the trading terminal, order book, safety of traders' funds and other administrative issues.

And for this work, the exchange receives its reward in the form of generous commissions charged to trading participants, which is quite fair.

Cryptocurrency exchange commissions:

- Commission for replenishment of the deposit. It is charged by the organizers of the auction for depositing funds into the trading account. As a rule, it is set by the organizers of the auction and depends on the size of the deposited amount. Accordingly, the larger the deposit, the lower the commission percentage.

- Withdrawal fee. By analogy with the first commission, it is set by the exchange and depends on the client's status, which is determined by the size of the deposit and the withdrawal amount.

- Trade commission. The organizers of the trades receive a commission for servicing the trade from each transaction. It can vary from 0.00 to 0.25% of the transaction volume and can also depend on the client's status.

- Commission for lack of trading activity. Not charged by all exchanges. It involves writing off a certain percentage of the amount of your deposit, if during the time specified by the agreement with the exchange you have not performed a single trade operation.

Commissions and limits on exchanges

Commissions and limits on cryptocurrency exchanges differ in their variability. To have an idea of these numbers, you need to analyze the data of popular sites.

This is what the TOP cryptocurrency exchanges look like today. To find out more information, you need to visit the official website of the site that is optimal for you.

An experienced trader must analyze the market on his own, and each platform provides its own tools for this purpose:

- Graphs. They will show how the value of coins has changed over a certain time period.

- Glass of trades. It will allow you to understand what is the difference between the current offers to buy / sell, and will also allow you to make a thorough analysis in which direction the price will rush in the future.

- Trade history. Knowing the trading volumes of a certain pair, you can easily determine how popular this direction is on a particular exchange.

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