Surely when someone participates in the Crypto market, they must register and use at least one exchange, so what is a Crypto exchange? Join Weakhand to learn about the importance, benefits, and risks associated with using Crypto exchanges in this article.
What is a Crypto Exchange?
Crypto Exchange is an online platform where people can use it to buy, sell, exchange or store their assets. The exchange can be considered to act as an intermediary connecting the party who wants to buy and the party who wants to sell their Crypto.
The trading platform provides an intuitive interface so users can make transactions in the most efficient way. This interface usually includes price tables, charts, information about buy and sell orders and technical analysis tools.
There are 2 most popular types of Crypto exchanges today:
- Centralized Exchange (CEX): These are centralized exchanges built and operated by a certain company. When using the exchange, users must undergo identity verification operations as well as comply with the regulations of the exchange.
- Decentralized Exchange (DEX): Are decentralized exchanges built entirely on On-chain and are not managed by any individual, organization or country. Therefore, everyone can easily trade on DEX platforms without being limited by any rules.
Advantages of Crypto Exchange
Advantages of Centralized Exchange
The advantages Centralized Exchange brings to users include:
- Friendly interface: CEX platforms often have an intuitive and easy-to-use user interface (UI), making it easier for newcomers to familiarize themselves with the Crypto market.
- High liquidity: Due to their large user base, CEXs often have high liquidity, allowing users to buy and sell assets quickly without changing the market price too much.
- Security and safety: CEX platforms often invest heavily in security measures such as encryption, two-factor authentication, and storage to protect user assets.
- Customer support: CEX platforms typically offer professional customer support, helping to resolve user issues and queries quickly.
- Fiat gadgets: Provides direct trading features between Crypto and Fiat currencies, which is very useful for users who want to convert between these two assets.
- Payment System: Centralized exchanges often support multiple payment methods, including bank transfers, credit or debit cards, and even online payment services.
Advantages of Decentralized Exchange
Not inferior to CEXs, DEX platforms also have many advantages:
- Right to control assets: Users retain full control over their private keys and wallet assets, without needing to transfer ownership to the DEX.
- Privacy: Using DEX platforms will not require people to complete identity verification (KYC) thus ensuring personal data privacy.
- Asset diversity: Any protocol can list tokens on DEX platforms so the number of assets users can trade on DEX is huge.
- transparent: Because DEX platforms operate entirely on a Blockchain network, anyone can check the information on transactions there.
- Inability to intervene: Because it operates independently using smart contracts, no organization or individual can interfere with the operation of DEX platforms.
Disadvantages of Crypto Exchanges
The disadvantage of Centralized Exchange
In addition to the above advantages, Centralized Exchanges also have some potential disadvantages:
- Security risks: Because CEX systems often store data and assets into a single database, hackers often target it and attack. Every year there are also many attacks targeting trading floors, causing hundreds of millions of dollars in losses.
- Right to control assets: When a user’s assets are deposited into the wallet provided by the exchange, they have absolutely no right to own the private key of that wallet address, so if any problem occurs, they cannot fully decide their assets. .
- Dependency on third parties: Because the operating model is similar to a traditional company, exchanges will have to depend on the laws of their headquarters and supporting countries, so they will depend on third parties such as government.
- Privacy: Current use of all CEXs requires everyone to complete a KYC process, so users’ identities being exposed due to attacks has happened many times.
The disadvantage of Decentralized Exchange
Decentralized Exchanges also have some disadvantages such as:
- Low liquidity: Because they are not yet popular with most people, DEX platforms often do not have too much liquidity, leading to price slippage in transactions.
- Unfriendly interface: The interface of DEX platforms often requires a certain amount of knowledge and trading experience in Crypto to use, so it is often not friendly to newbies.
- Poor support service: Because the operating model is completely automated, customer care services are often not invested in, so if there are any problems, the product user will not have the necessary support.
- Difficult to reach by Fiat: Because it operates entirely on Blockchain and is separate from traditional payment services, access to Fiat is very difficult for DEX platforms.
Top Crypto Exchanges
Binance
Binance is one of the largest and most famous cryptocurrency exchanges in the world founded in 2017 by Changpeng Zhao (commonly known by his stage name CZ). Binance then quickly became one of the leading trading platforms on parameters such as trading volume, number of users or total value of assets held by users.
In addition to the main product, which is an exchange, Binance also built its own Blockchain, Build And Build Chain (BNB Chain). The original token used for transaction fees on this Blockchain is BNB, which is also the Token representing Binance.
OKX
OKX, formerly known as OKEx, is an international cryptocurrency exchange headquartered in Malta. This exchange was founded in 2017 and is one of the world’s leading Crypto exchanges in terms of trading volume and number of users.
In addition to the main product which is the trading floor, OKX also provides many different products and services throughout Web3, including:
- OKX Wallet: Cryptocurrency wallet developed by OKX.
- OKX NFT Marketplace: NFT and Incripsion exchange developed by OKX.
- X1 Chain: A Layer 2 built by OKX.
Uniswap
Uniswap is a decentralized exchange first launched in 2018 on the Ethereum network, undergoing many different upgraded versions from Uniswap V1 with ETH-ERC20 Token model, Uniswap V2 with ERC20- model. ERC20 to Uniswap V3 is centralized liquidity that helps users optimize the efficiency of capital usage, which has positioned this AMM DEX platform as a leader in the entire market.
In addition to developing AMM DEX, at the moment Uniswap is also expanding into many other areas such as establishing Uniswap Labs Ventures to specialize in investing in Startups or acquiring the NFT Marketplace Genie platform to serve users. NFT trading.
Instructions for Buying Crypto on Binance
Step 1: Sign up for a Binance account
- Visit: https://www.binance.com/en/activity
- Select start account registration form.
- Enter full information about Email and phone number.
- Conduct identity verification (KYC) with identification documents.
Step 2: Buy USDT through Binance OTC
- After successful registration, everyone needs to access their account.
- At Binance’s main interface, select “Trade” -> “P2P”
- Change the payment unit to VND and the purchased asset to USDT.
- Choose a unit with a payment method and minimum amount suitable for the transaction.
- Pay the seller and receive USDT back.
Step 3: Buy Crypto with USDT
- Access Profile in the right corner of the interface and select “Assets”.
- Select the “Funding” account and transfer USDT to the “Spot” account.
- Select “Trade” -> “Spot” again and search for the token you want to buy.
- Enter the number of tokens, the price you want to buy and select “Buy” to buy Crypto.
- On the contrary, to sell Crypto, people just need to enter the “Sell” section.
Summary
Above is the information that everyone needs to understand to understand what the Crypto exchange is as well as how to buy and sell Crypto through Binance. Hopefully through this article everyone will be able to trade Crypto on their own through exchanges.
