Cryptocurrency is a form of digital currency, typically created and stored electronically in the blockchain. The coins can be used to buy goods or services online or traded for other currencies like US dollars. One of the most popular uses is speculation: investors may purchase cryptocurrencies with the hope that their value will rise relative to other currencies and then sell them for a profit.
Cryptocurrency exchanges allow people to trade cryptocurrencies by matching orders from buyers and sellers; these could include fiat money (such as USD) and various crypto assets (such as bitcoin). A cryptocurrency exchange operates similarly to an international stock market where different traders come together to see who has what kind of order, at what price they want it filled, and how much of it they want.
There are many names for cryptocurrencies which can be very confusing, especially since most people don’t know if they’re talking about the same one or not. The cryptocurrency names are also hard to track down because there’s no formal list of all of them available, and some exchanges may choose different ones to note their own private kinds of currencies that aren’t legal tender. Here are some of the common names with their corresponding abbreviations:
USD (US Dollar) = USDT (Tether) – It’s a crypto asset created by Tether Limited that is pegged to, and exchangeable for one US dollar (~$1). Every TetherUSD coin issued is backed up by one real-world US dollar held by Tether Limited in a reserve account. The purpose of Tether is to facilitate secure, fast, and low-cost international money transfers.
Bitcoin = BTC (Bitcoin) – Bitcoin is the first and most well-known cryptocurrency. It was created by an anonymous person or group of people under the name Satoshi Nakamoto in 2009.Ethereum = ETH (Ethereum) – Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference.Litecoin = LTC (Litecoin) – Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Ripple = XRP (Ripple) – Ripple is a real-time gross settlement system (RTGS), currency exchange, and remittance network created by Ripple Labs Inc. It uses the Ripple protocol to enable secure, instant, and low-cost global financial transactions of any size.
Most of these exchanges also have their own individual currencies which can be used on their respective platforms only. For example, Coinbase has its own currency known as “Coinbase Dollars” (GDAX) which are used to buy goods and services on the Coinbase platform.
Now that you have a general idea of what a cryptocurrency exchange is, let’s take a look at some of the best exchanges on the market today:
Binance is a fairly new but fast-growing international cryptocurrency exchange. It was founded by Changpeng Zhao in 2017 and has quickly gained momentum as one of the top exchanges on the market due to its ability to process 1.4 million orders per second. Binance also features a number of coins that are not available on other platforms such as TRX, ICX, NEO/GAS, XMR (Monero)/XMO pairs, along with BTC and ETH for trading pairs. They have quickly grown its base of users since being created last year by reaching six million members in 2018 with over 400 listed digital currencies on the platform. In December, they had their busiest day ever which led to 10 million orders processed within 24 hours while their servers were handling 1.5 million orders per second (or roughly the equivalent of what New York Stock Exchange’s servers process in one day).
The platform also utilizes an advanced AI that offers real-time support, operates with full transparency, and uses optimal algorithms to manage its trading pairs which put it ahead of other exchanges. While they do offer security for their users (such as 2FA authentication), Binance does not currently support USD or other fiat currencies. The exchange is fully registered in Malta and complies with all laws related to digital currencies.
Bittrex was founded by Richie Lai, Bill Shihara, and Ryan Hentz who wanted to improve the issues standard crypto exchanges face such as long wait times and customer service. Bittrex has been operational since 2014 and is currently one of the most popular exchanges with over 3 million customers. The platform offers a variety of digital currencies to trade as well as a large number of trading pairs which makes it one of the more versatile exchanges on the market.
Bittrex also offers excellent security features such as 2FA authentication, 24/7 monitoring, and a host of other measures. They also have a very user-friendly platform that makes it easy for beginners to get started while still providing all the features needed by more experienced traders. One downside is that they do not currently offer fiat currency support but do have plans to add this in the future.
Coinbase is one of the most popular exchanges with over 13 million users, and they are known for its simplified interface that helps beginners easily get started. The platform offers Bitcoin, Bitcoin Cash, Ethereum, and Litecoin trading pairs along with fiat currencies such as USD, EUR, GBP, CAD & more.
Coinbase has been operational since 2012 but is currently registered in thirty-four countries which gives them a broad base of support around the world. They also provide secure storage options for cryptocurrency holdings through Coinbase’s website or mobile apps. With all this said, they do not currently offer any altcoins or other tokens to trade on their platform so if you’re looking to invest in some theses outside of BTC/ETH then Coinmama might be your best option.
Coinmama is another popular exchange that offers a wide variety of tokens outside of the more common ones found on most exchanges. They offer Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Cardano, Qtum, and Ripple for buying and selling with fiat currencies. Coinmama has been operational since 2013 and is currently available in over two hundred countries making it one of the most accessible exchanges out there. They also offer a user-friendly platform with excellent customer support.
One downside to Coinmama is that they do not currently have a mobile app but are working on developing one which should be released in 2019. Additionally, they only offer to purchase and not sell so you would need to find an alternative platform to sell your tokens on.
Kraken is one of the oldest exchanges that has been operational since 2011. The platform offers a wide variety of digital currencies as well as fiat currencies which makes it a great option for those looking to invest in a variety of tokens. Kraken also offers excellent security features such as 2FA authentication, PGP email encryption, and a host of other measures. They are currently available in over 190 countries and have over thirteen million users making them one of the more popular exchanges.
One downside to Kraken is that their customer service has been known to be unresponsive at times which can be frustrating if you need help with something. Additionally, their user interface might be confusing for beginners.