Crypto Exchanges Explained
Exchanges are where you buy, sell, and trade cryptocurrencies.
Types of Exchanges
Centralized Exchanges (CEX)
- Binance, Coinbase, Kraken, Bybit
- Easy to use, high liquidity
- Company holds your funds
- KYC required
Decentralized Exchanges (DEX)
- Uniswap, PancakeSwap, dYdX
- You control your funds
- No KYC needed
- Smart contract based
Choosing an Exchange
Key Factors
- Security track record
- Trading fees
- Available pairs
- Liquidity depth
- User interface
- Customer support
Fee Structures
- Maker fees: 0.01-0.1%
- Taker fees: 0.02-0.1%
- Withdrawal fees vary by coin
- Compare fee schedules before choosing
Exchange Security
Must-Do Steps
- Enable 2FA (authenticator app, NOT SMS)
- Use unique strong password
- Whitelist withdrawal addresses
- Enable anti-phishing code
Warning Signs
- Exchange blocking withdrawals
- Unusual spread on trades
- Delayed deposits
- Poor communication
Trading Features
Spot Trading
- Buy and sell at current price
- You own the actual crypto
- Simplest trading method
Futures Trading
- Trade with leverage
- Long or short
- Higher risk, higher reward
- Not for beginners
Margin Trading
- Borrow funds to trade larger
- Liquidation risk
- Interest on borrowed funds
Best Practices
- Start with spot trading
- Keep only trading funds on exchange
- Cold storage for long-term holds
- Verify withdrawal addresses carefully
- Not your keys, not your crypto