How Crypto-Currency Exchanges work?

Date: 9 August 2018, 22:08

How Crypto-Currency Exchanges work?

The difference of the crypto currency market from other currency markets is the absence of any official regulation: the crypto currency exists only on the Internet, it does not have a physical expression, and it has no official circulation. However, this does not mean that there is a chaos: the registration of crypto-exchange requires compliance with the rules established by law. As on any stock exchanges, profit is generated due to the difference in buying and selling rates. The strategy of the game on the crypto-exchange market corresponds to the standard strategy of the exchange game in principle.

Exchanges must be distinguished from exchangers, which sell their own stock of crypto currency at the rate they set, which is certainly higher for sale and lower for purchase. The operations are one time, the exchanger always earns. On the exchanges, the players themselves earn on fluctuations in the exchange rate during the exchange day. The rate grows with the increase in the number of those who want to buy crypto money and falls as demand meets.
Crypto-exchanges are intermediaries

Exchanges are only intermediaries

Exchanges are only intermediaries between sellers and buyers, receiving for their services a certain percentage of transactions. The protection of crypto-instruments is more reliable than that of exchangers, but their attractiveness for hackers is much higher. Of course, players have to take on all the risks inherent in exchanges, including the collapse of the market, when you can lose all your savings. Therefore, the choice of a trading platform is the first and most responsible step.

The most reliable source of information is user feedback. It is necessary to pay attention to the policy of the exchange in relation to new customers. The fact is that the registration procedure requires, in addition to verification, mandatory deposit of funds into the account. If the account is locked, they will be lost. The presence of hidden payments also does not speak in favor of the exchange, even if the other conditions are quite attractive.

What are the criteria for choosing a crypto-exchange?

What is important to know when choosing an exchange:

  • currencies traded on the exchange
  • trading volume
  • withdrawal of digital money into various world currencies
  • speed of operations
  • Accessibility for Russian users and users of other countries

Strangely enough, the year of the foundation of the exchange does not matter. The most reliable exchanges with a large volume of trading and a variety of crypto-currencies.

The best exchanges of 2017-2018



The first among such exchanges is Binance, registered in Hong Kong. The Exchange management acts within the framework of legislative regulation. Now the company enjoys investment support of large financial groups of the world. Despite its youth, the site, created in 2017, quickly entered the leading positions in the daily trading volume, which exceeds two billion dollars. From its closest competitors, it is favorably distinguished by a low commission percentage and fast transactions: every half million orders are traded every second - applications for the purchase of currency, which is traded here for almost 90 kinds. From the convenience of the exchange it is necessary to note the Russian version, a clear interface, the optional verification and the presence of a mobile application.



The EXMO exchange started its work in 2013. It is highly secure, but this is due to the restriction of the addition of new currencies: currently there are 17 trading pairs, including with the withdrawal of rubles, dollars and euros, as well as electronic purses. Verification is not required. Transfers within the network take a few seconds, and withdrawal takes no more than half an hour, commission is 0.2%. The exchange is adapted to the Russian language, including technical support, and can be used in the exchanger mode, which is convenient for novice clients.



Another officially registered Hong Kong exchange BitMEX was originally intended for trading bitcoins, but now it already works with the ten most common and reliable crypto-currencies. The list of trading pairs is constantly updated. This area is interesting primarily to experienced players, but beginners do not risk losing. The interface and all services are adapted to the Russian-speaking audience. There is an application for mobile commerce.



The largest and most popular existing stock exchange, Poloniex opened in 2014. Now it has about 45,000 customers. It ranks first in terms of trading volume, has high reliability, allows trading all the most attractive crypto-currencies. But Poloniex supports only English, although this defect is partially leveled by the built-in translator.



This exchange is still young and not widely known. But she has all chances to take a worthy place in the Russian market thanks to the support of the Russian language. On LiveCoin, the largest number of currency pairs is being traded: now it has exceeded 260. Verification is needed only for replenishment of account by bank transfers. But it certainly will not be the most common option, as there are ways to enter from e-wallets and even cash through a courier. Thus, it is possible to preserve complete anonymity of the trade. The stock exchange is confidently approaching the top positions on daily volumes. The commission depends on the transaction, but in any case no higher than 0.18%.

Of course, the list presented here is far from complete and quite subjective, but this is due to the variety of selection criteria for exchanges, changing terms of trade, the emergence of new crypto-currencies, and changes in legislation. In addition, the time of small transactions ends: now a beginner can not expect a significant income. As well as on usual trading platforms, crypto-exchanges pass to the automated auctions, and in these conditions it is more rational to entrust the destiny of the currency to experts, than independently to master the most complicated mechanism of exchange trade. An ordinary user can evaluate the performance of sites only on ratings made by experts, and be guided by reviews on YouTube, as, for example, here:

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