While increasingly trendy these days, investing in Bitcoin and any cryptocurrency can be intimidating. Especially at first, when you learn about scams and people losing their investments.

The truth is that it has never been safer to invest in digital money as it is today. However, to start investing in Bitcoin, you’ll need to create a Bitcoin wallet and sign up for a crypto exchange platform.

There are countless crypto exchanges for different types of traders. In this article, we want to focus on platforms that are excellent regardless of how you use them. We’ll also tell you about two major types of cryptocurrency investing sites.

How Do Crypto Exchange Platforms Work?

In the simplest terms, crypto exchange platforms facilitate the trading of digital assets. They are the go-between for buyers and sellers. They profit by charging commissions as well as transaction fees.

We can better understand how they work if we focus on the two types of crypto exchanges, centralised and decentralised.

Centralised Crypto Exchanges

These are, by far, the most common type of crypto exchange platforms. They are run by private companies and require registration and identification. This is also known as the “Know Your Customer” rule.

This type of exchange typically has high volumes and liquidity. However, you could argue that centralised exchanges are not compatible with the philosophy of Bitcoin – the original cryptocurrency.

They use their own private servers, which makes them more susceptible to attacks. Should the central server of the company become compromised, the entire system might shut down? There are many advantages to using them too.

They’re usually user-friendly and a great starting point for a new investor. Centralised crypto exchanges don’t require a complex transaction process. You log in to your account and use applications and websites to make a transaction.

Decentralised Crypto Exchanges

This type of crypto exchange platform is more in line with the principles of cryptocurrency. There is no central point of control with decentralised exchanges. A “server” is comprised of all the computers in the world that are connected to the platform.

If one person shuts down their computer, that has no impact on the entire network. There are plenty of other computers that continue to run and support it.

It’s clear how drastically different this approach is to have just one company control a single server in a single location.

Decentralised exchanges are less likely to be hacked, and even if someone were to try, they’d probably be unsuccessful.

Also, as these platforms are not subject to any regulation, investors don’t have to provide their identification and can use the platform any way they choose. The one significant disadvantage of decentralised crypto exchanges is that they are more complicated to use.

You have to remember your private key and password. Otherwise, your assets can be lost forever. They require a learning curve and are better suited to more advanced crypto investors.

Top 5 Cryptocurrency Exchanges

We’ve expanded the definition of a crypto exchange platform and talked about the two major types of exchanges. Now we want to highlight the five most popular platforms used by investors all around the world.

1. Coinbase

This platform has been around since 2012, not long after Bitcoin was released. This is a fully licenced and regulated crypto exchange. It offers more than a solid variety of coins and has a user-friendly interface.

One thing you could say about Coinbase is that in the sea of controversy surrounding cryptocurrency, the platform has largely managed to avoid all suspicion. The company also offers custodial wallets for their investors, which are pretty convenient for new users.

The major downside of Coinbase is the high fees involved. If you switch to Coinbase Pro, the fees will be slightly lower. Another disadvantage is that users don’t have control of their wallet keys.

2. Binance

This platform focuses on altcoin trading primarily. It was founded in 2017, which was one of the most successful years for cryptocurrency.

It also has a 0.1% fee, which is one of the lowest on the market. Lately, Binance has dominated the global crypto exchange space and takes up a significant portion of the daily trading volume.

This is a platform better suited for investors interested in digital currencies other than Bitcoin, as it has over 50 different cryptocurrencies available. They also offer advanced charting and are definitely geared towards more advanced investors.

3. Bisq

Bisq is a decentralised crypto exchange platform. Trading fees can be paid in BTC or BSQ (the platform’s native cryptocurrency). The platform facilitates 25 different payment methods, which is excellent.

There is also a mobile app available for iOS and Android. Bisq is also non-custodial, which means no one can touch your funds except you.

You can choose your Bitcoin wallet and not have one provided for you. Users might not like that the transaction speed is relatively slow and that the trading volume can be low. Essentially, this platform is not designed for active trading.

4. Kraken

This is another crypto exchange that has been around since the beginning of digital money. They have an excellent selection of coins and tokens users can trade and invest in.

Margin trading is also possible, but you have to keep in mind that this exchange is not as easy to use as some of the available platforms.

It’s available worldwide, has an excellent reputation, offers fast bank withdrawals, and offers relatively low transaction fees.

5. eToro

If you’re interested in investing in Bitcoin, Ethereum, and Litecoin, this is one of the best crypto exchanges you can sign up for. Etoro has over 18 million users and is available in close to 150 counties. It is web-based, but mobile apps are available as well.

One of the best things about this platform is that it offers a practise trading account to preview what you can expect before creating a Bitcoin wallet and exchange account and depositing real funds.

Choosing the Best Crypto Exchange Platform for You

There are many more options for crypto exchanges, but the platforms we’ve talked about are verified choices. There are some differences in terms of complexity of use and which digital currency is the focus, but most of them are versatile in features.

Probably the main choice you’ll need to make is whether you’ll go with the centralised or decentralised platform.

Beginners are likely better off with an easy-to-use centralised platform such as Coinbase, but more advanced traders might prefer a decentralised platform such as Bisq.

Author Bio: Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group, which specialises in digital growth strategies for companies in the cryptocurrency market such as Bitamp.com.

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Source: https://www.cryptocoinzone.com/bitcoin-exchanges/the-best-bitcoin-and-crypto-exchanges/