Given that the worldwide adoption of cryptocurrency, it’s no surprise that there are now hundreds of crypto exchange platforms to choose from. You might be a crypto-enthusiast looking to buy cryptocurrency or a company hoping to sell them. In either case, choosing the best cryptocurrency exchange platform depends on various factors, including fees and commissions, regulation, supported markets, payments, and customer service. While it is possible to buy and sell cryptocurrency without using an exchange platform, exchanges are very helpful in conducting these transactions.
There are so many cryptocurrency exchanges out there, each with unique features that make it stand out from the competition. Even so, it is essential to know which ones will fit your specific needs and provide you with the best services.
In this article, we will look at some of the best platforms to buy and sell cryptocurrencies on at the moment. Before that, though, it is essential to understand the basic concepts of the industry.
Cryptocurrency concepts & definitions
Cryptocurrency
A cryptocurrency is a digital or virtual currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Many cryptocurrencies are based on blockchain technology, a distributed ledger enforced by a distributed network of computers. Cryptocurrencies are different from the conventional fiat currencies that we use every day. This is because they do not fall under any central authority, making them theoretically immune to government intervention or manipulation.
Cryptocurrency exchange
Exchanges that facilitate the trading of cryptocurrencies for other assets, such as digital and fiat currencies, are known as cryptocurrency exchanges. Cryptocurrency exchanges, in effect, act as a middleman between buyers and sellers, earning money through commissions and transaction fees.
Centralized vs. decentralized exchanges
There are many exchanges on the market at the moment. These fall under two categories: centralized and decentralized exchanges. Usually, centralized exchanges act as middlemen between a buyer and a seller and are often more reliable because they are run and controlled by a company. Currently, more than 90% of all crypto transactions go through this type of exchange. On the other hand, decentralized crypto exchanges allow users to conduct peer-to-peer transactions without the use of an intermediary. They tend to prefer specific types of users due to some issues that are associated with centralized exchanges. However, they do not allow for the exchange of fiat currencies for cryptocurrencies.
Centralized exchanges
In terms of the advantages and disadvantages of both, centralized exchanges tend to have user-friendly interfaces and are reliable. New investors will find centralized exchanges to be a familiar and friendly way to trade and invest in cryptocurrencies. Users of centralized exchanges can log into their accounts, view their account balances, and make transactions through applications and websites. This is instead of using crypto wallets and peer-to-peer transactions, which can get complicated. Additionally, they provide an extra layer of security and reliability when it comes to transactions and trading. They also offer greater comfort by facilitating transactions through a well-developed, centralized platform.
The disadvantages, on the other hand, include hacking risk and high transaction fees. Companies that operate centralized exchanges are responsible for their customers’ holdings. Large exchanges typically hold billions of dollars in bitcoin, making them a target for hackers. Unlike peer-to-peer transactions, they frequently levy high transaction fees in exchange for their services and convenience. This can be exceptionally expensive when trading large amounts.
Decentralized exchanges
Decentralized exchanges tend to mitigate hacking risk, prevent market manipulation, and provide anonymity. Users are not required to transfer their assets to a third party. As a result, there is no risk of a company or organization being hacked, and users are protected from theft and hacking. Additionally, decentralized exchanges prevent market manipulation by allowing for peer-to-peer cryptocurrency exchange. This protects users from fake trading and wash trading. Finally, decentralized exchanges do not require customers to fill out KYC forms, ensuring privacy and anonymity for users.
On the other hand, decentralized exchanges have a higher level of complexity, a lack of fiat payments, and liquidity struggles. If users of decentralized exchanges forget their crypto wallet keys and passwords, they will lose their assets irreversibly. Unlike centralized exchanges, which offer a more convenient and user-friendly process, decentralized exchanges require the user to learn and become familiar with the platform. Moreover, users who do not already own cryptocurrencies will find decentralized exchanges less convenient. This is because they do not allow them to trade fiat currencies for digital ones. Lastly, centralized exchanges are responsible for the vast majority of the trading volume. As a result, decentralized exchanges frequently lack liquidity due to a lack of volume. This makes it difficult to find buyers and sellers when trading volumes are low.
Now that we understand the different types of cryptocurrency exchanges let us look at the top centralized and decentralized exchanges according to traffic, liquidity, and trading volume.
Top centralized exchanges
1) Binance
Over the last few years, Binance has established itself as a trustworthy cryptocurrency exchange platform. It accepts both fiat and cryptocurrency for deposits and withdrawals. Traders who do not have access to Binance’s supported cryptocurrencies can purchase them with a debit or credit card, cash balances, peer-to-peer trading, or a third-party payment system. Another intriguing aspect of Binance is its coin, the Binance Coin (BNB). Trading with BNB can indeed result in significant savings. Binance has won the hearts of many crypto traders with its standard trading fee of 0.1%.
2) Houbi Global
Huobi Group is a global leader in the digital economy, with a mission to achieve breakthroughs in core blockchain technologies and the integration of blockchain technology into other industries. It has established a global industry ecosystem for the digital economy by expanding into industry blockchain, public chain, digital assets trading and wallet, and digital economy research. Huobi Group also offers solutions in other areas surrounding the upstream and downstream sectors. Additionally, the company commits to providing secure and dependable Internet of Value (IoV) services to tens of millions of users in over 100 countries and regions.
3) Coinbase (Pro)
Coinbase is a cryptocurrency exchange that found in 2021 in the United States. It is now one of the country’s largest fully-regular exchanges. Recent studies have reported more than $455 billion in transactions, with over 40 million verified users holding assets worth more than $90 billion. These figures alone should entice any cryptocurrency enthusiast to consider it a reliable platform for buying and selling cryptocurrencies.
Customers can deposit and withdraw money in a variety of ways. They can use a bank account or deposit and withdraw funds using cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. However, depending on the user’s location, there is a slight difference between these options.
4) Kraken
Kraken is one of the most established cryptocurrency exchanges. Despite completing its development phase in 2011, the Kraken platform went live in September 2013, following two years of testing and improvements. Today, this crypto exchange based in the United States has earned a reputation for having the best security, advanced trading tools, and a diverse range of coins to choose from.
In addition to their desktop application, they also have their crypto exchange mobile app Kraken Pro. It includes all of the features found in the desktop application, including staking portfolio balances, margin trading, and limit and stop-loss orders.
5) Bithumb
Bithumb is a cryptocurrency exchange based in South Korea. Bithumb Korea, founded in 2014, is the country’s most influential digital currency exchange. The exchange has 8 million registered users, 1 million mobile app users, and a current cumulative transaction volume of over 1 trillion US dollars.
Top decentralized exchanges
1) Uniswap
Uniswap is a cryptocurrency exchange protocol that operates on a decentralized basis. This protocol uses smart contracts to enable automated transactions between cryptocurrency tokens on the Ethereum blockchain. Experts estimate Uniswap to be the largest decentralized cryptocurrency exchange. Crypto experts had rated Uniswap the fourth-largest cryptocurrency exchange overall by daily trading volume as of October 2020. By March 2021, Uniswap was generating fees of around US$2–3 million per day for the liquidity providers who facilitate liquid markets for the cryptocurrencies being exchanged.
2) Tokenlon
Tokenlon is an Ethereum blockchain-based decentralized exchange and payment settlement protocol. It currently powers Tokenlon DEX, a decentralized exchange and payment settlement protocol that aims to provide the general public with a secure, dependable, and seamless trading experience. LON, their token, is a utility token that unites ecosystem stakeholders and incentivizes ecosystem expansion.
Fee discounts and governance are the two main applications for LON tokens. For most transactions, Tokenlon currently charges a 0.30 percent fee. Users can get fee discounts based on the number of tokens they get from holding LON. Additionally, LON grants the community the right to vote on Tokenlon’s governance. Tokenlon can improve by LON holders initiating and voting on Tokenlon Improvement Proposal (TIP) proposals. Examples of these proposals include proposals for determining the use of the treasury, fee parameters, buyback parameters, supporting assets, product features, and so on.
3) 0x Protocol
Based on the Ethereum blockchain, 0x is an open protocol for decentralized exchange. The 0x protocol aims to power a decentralized exchange where all types of assets, including stocks, currencies, and precious metals can trade. Anyone in the world can run a decentralized exchange using Ethereum smart contracts. 0x Labs is building an open-source infrastructure for frictionless peer-to-peer (P2P) token exchange with the 0x protocol. Rather than being a crypto-economic protocol, 0x is primarily a network protocol for signaling between buyers and sellers. It’s a publicly accessible smart contract that any dApp can use with exchange functionality.
4) Venus
Users can access an immutable money market protocol directly on-chain with Venus. Venus powers the world’s first decentralized stablecoin, VAI. Venus offers a basket of stablecoins and crypto assets with no centralized control and built on the Binance Smart Chain. The protocol’s funds can earn APYs based on the market demand for that asset. The block earns interest, which it can use as collateral to borrow assets or stablecoins. Users can tokenize their assets utilizing the Binance Smart Chain and receive portable tokens that they can move around freely into cold storage, transfer to other users, and more.
5) Sushiswap
SushiSwap (SUSHI) is a cryptocurrency token and a decentralized exchange that was launched in August 2020. The exchange provides a platform for anyone who is interested in trading cryptocurrency. According to CoinMarketCap data, the exchange has over $3 billion in liquidity. Moreover, the cryptocurrency’s price has increased by over 1,500% since November. Along with SushiSwap, they also offer the most competitive rates for DeFi blue chips through their exchange, isolated lending marketing, and elastic interest rates through Kashi Lending. They also offer tools for leverage trading, an innovative ecosystem to use Apps efficiently and gain extra yield through their BentoBox Apps. Sushiswap has the potential to earn governance rights and 0.05% of all swaps through SUSHI staking.
Conclusion
Whether you’re a cryptocurrency buyer or seller, it is crucial to research which cryptocurrency exchange works best for you and where you can gain the most traction. As a cryptocurrency buyer, you want a platform with enough variety and features that simplify transactions. On the other hand, as a cryptocurrency seller, you need a platform that will give your cryptocurrency maximum visibility. With so many cryptocurrency exchanges out there, knowing how you measure up in the industry is incredibly beneficial.
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