This is the third article within Crypto guide for beginners. Read the first article, the second article

As you know already cryptocurrencies, including Bitcoin, Ethereum, Solana, and others have not been fully given the official status of money or official means of payment yet, that’s why they are not offered for sale at traditional exchanges. However, there are exceptions, such as Bitcoin which is officially recognized as a commodity in the USA by the Commodity Exchange Act (CEA). Many other cryptocurrencies are still in the gray financial zone, which is why they cannot be traded openly at traditional exchanges. 

If a traditional exchange is not an option, then you can go to the crypto exchange. 

What is a crypto exchange?

The crypto exchange is a platform where you can sell or buy different types of cryptocurrencies. Crypto exchanges are recognized to be extremely complicated systems to develop as there are multiple parameters and safety regulations to be taken into consideration. If we compare a cryptocurrency exchange and a traditional trading stock, cryptocurrency is a more complicated platform due to its unregulated nature. There are three main types of exchanges:

1. Centralized crypto exchanges

This is the most common type of exchange. This type of crypto exchange conducts all the operations with crypto with the help of a third party, which means that users don’t interact with each other on a peer-to-peer basis, they interact with the platform. On the one hand, custodial wallets that centralized crypto exchanges apply for each trader are very convenient to use, because they confirm transactions on users’ behalf and take care of wallets’ private keys. On the other hand, centralized exchanges could be hacked, which happens quite frequently. In case of a crypto exchange hack, all funds stored in the hosted wallets are lost and users will never get them back. Also, centralized exchanges are subjected to KYC and AML regulations, so it’s impossible for users to stay anonymous there.

2. Decentralized crypto exchanges

Decentralized crypto exchanges unlike centralized crypto exchanges are built with crypto and web3 ideology in mind. Decentralized crypto exchange doesn’t act as an intermediary between users who want to exchange crypto currencies, it allows them to trade directly. There are several good points about decentralized crypto exchanges. 

Decentralized crypto exchanges are:

• less regulated;
• more secure, because there is no single point of failure (as it is in centralized platform management);
• lower fees, because there are no platform and service fees involved;
• faster transaction speed.

3. Hybrid crypto exchanges

Hybrid crypto exchanges are not very common though they represent a combination of centralized and decentralized crypto exchanges. Hybrid exchanges provide a guaranteed liquidity pool similar to the ones provided by centralized crypto exchanges, but at the same time, hybrid platforms are secure and decentralized.

Takeaway

While choosing the crypto exchange you should be aware that each type: centralized, decentralized, and hybrid has their pluses and minuses. Moreover, crypto exchanges are not the only way to exchange, buy crypto, or change it to fiat. Some modern crypto wallets offer all the required services. One of such wallets is Spatium. 

It’s a multi-chain wallet, enabling users to send crypto to different blockchains with a 30% less fee. Try the Spatium Feeless MPC wallet for free and enjoy paying less for your transactions. Check out more and stay connected to know our news first!

Spatium Feeless Wallet is a multi-currency crypto wallet. It makes crypto transactions affordable and cheap compared to many other crypto wallets. Spatium offers a revolutionary Feeless feature when transactions are paid in the crypto you send instead of the native crypto of the blockchain. Batched feeless transactions enable you to save up to 30%. 

Stay protected in web3 with Spatium Feeless Wallet. It’s easy to operate and securely to use. Spatium Feeless Wallet is free to download. It’s available on Android and iOS devices.  Visit our website to learn more about the wallet. Get it on your phone, test it, and enjoy your financial freedom!

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