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

1. Start with spot trading
2. Keep only trading funds on exchange
3. Cold storage for long-term holds
4. Verify withdrawal addresses carefully
5. Not your keys, not your crypto