How do Cryptocurrency Exchanges work?

In the early days, the only way to get hold of cryptocurrencies was to mine them or get them from someone else who was willing to sell them directly.

But people started to look for a simpler and safer alternative to get cryptocurrencies, so the first Exchanges started to appear.

A cryptocurrency exchange or DCE (short for digital currency exchange) is a platform that allows exchanging one cryptocurrency for another, trading and selling coins, and exchanging FIAT for cryptocurrencies.

Some are more for traders and others for quick cryptocurrency exchanges between users.

Cryptocurrency exchanges are in some ways similar to regular stock exchanges, the difference is the way traders make profits.

On a stock exchange, traders buy and sell assets to profit from their variable rates, whereas on cryptocurrency exchanges, traders use cryptocurrencies to profit from the highly volatile exchange rates.

The main difference is that on the stock exchange there are business hours, while cryptocurrency exchanges remain active 24 hours a day, 7 days a week, 365 days a year.

Cryptocurrency exchanges (especially centralized exchanges) need new users to complete a registration process before they manage to start trading, so we can find more security when making trades within this platform than outside of it.

Each exchange calculates the cost in the functionality of its trading volume, as well as the supply and demand of its users.

Exchanges earn from different revenue streams, the 4 most recognized are commissions, listing fees, market building, and fundraising for IEO, STO, and ICO.