What types of Crypto trading exchanges - Espay Exchange

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Introduction

• Cryptocurrency Exchange allows other businesses
  and customers to trade cryptocurrencies in
  exchange of other important assets listed in the
  exchange. It can be in the form of cash or any
  other digital exchange. Every exchange has
  different features and advantages and according
  to them the exchanges are chosen. Here we will
  see the four major exchanges and some of the
  other details related to crypto trading exchanges.

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Classification of the Crypto Exchanges

• One of the most important things to understand
  here is that, we are not recommending you any
  sort of particular exchange. We are just
  comparing them on the basis of their advantages
  and disadvantages as well. The final choice is
  actually up to you.

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The four major types of crypto exchanges are

• The distinction between all the crypto exchanges
  gets done on the basis of two factors that are
  compliance with regulation and the entity that
  controls the fund during process of trading. Hair
  we have an analysis of each type of exchange and
  also provide some examples so that it can become
  easier for you to understand.

Centralized Exchanges
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• It is one of the most common the largest crypto
  exchange in the world belongs to this. There are
  several platforms that are centralized. This
  platform is having a centralized operator that is
  responsible for the up gradation, security,
  functionality and also the representative can
  easily handle the public relations on their
  behalf. It also runs on the Centralized Crypto
  Exchanges software and it is having only one
  central server that helps in running all the
  operations.
• Advantages
• These are having the biggest liquidity and
  volume among all the others.
• There are some Centralized Cryptocurrency
  Exchange Solutions that can easily receive the
  deposits in fiat currency.
• There is a large variety of crypto currencies
  that can easily get treated in the centralized
  exchanges.
• Disadvantages
• The users do not have any real control over the
  coins that are restored in crypto exchanges
  wallet.
• It takes a lot of time in completing the
  withdrawal procedure.

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Decentralized exchanges

• As compared to the centralized exchanges, these
  exchanges are completely opposite. No single
  entity can control these exchanges. Its
  basically a set of smart contracts and it allows
  the users having a trustless token exchanges.
  Even there are users consider White Label
  Exchange Platform for getting right suggestions
  regarding the Decentralized exchanges.
• Advantages
• In this, the users can easily get full
  control over all the funds
• Only the user will have the access to close
  the opened trades.
• There are several other unpopular tokens
  available that can be used for trading.
• The best part is that no one can hack it is
  protected by the security of the blockchain.
• Disadvantages
• There is very low liquidity.
• In order to place order or cancel order it is
  necessary to pay a particular amount of fees.
  Yes, in this every action needs an amount.
• The user can only trade inside a particular
  blockchain
• Since, it is a smart contract hence if you
  did something wrong then you will lose all your
  funds
• There is no fiat here.

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Instant Exchange

• Shapeshift, Godex, Changelly and others are a few
  popular types of this exchange available. Even
  with the White Label Crypto Exchange Software,
  one can get more details about the same. It is a
  very simple way to exchange any cryptocurrency
  for other. Here the best part is, you do not
  trade with any another trader you simply trade
  with the service itself. It is fast and simple.
• Advantages
• It is fast and instant.
• There is no requirement of holding the funds
  of the users.
• It is having a lot of coins and tokens.
• Disadvantages
• The price is quite higher as compared to
  other crypto exchanges.
• Some certain pairs are not available because
  it sometimes runs out of coins.
• For the small retail buyers small liquidity
  pool is available but not for large amounts.
• You cannot exchange millions worth of assets
  at this platform.

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Hybrid Crypto Exchange

• As the name suggests, it is a combination of
  security of decentralized exchange and the
  usability of centralized exchanges.
• Advantages
• It comes with a high security factor.
• User gets the facility of two factor
  authentication.
• That type of exchanges can never easily get
  hacked
• Fat deposits are also available.
• There is a protection against DDOS attacks
• Disadvantages
• The volume is somewhere between centralized and
  decentralized exchange. Sometimes it is not quite
  enough for the crypto whale.

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OTC Desk

• Crypto OTC services are also available through
  Binance. With the invention of this now it is
  possible to trade over large amounts of several
  cryptocurrenices listed on the binance exchange.
• Advantages
• Large quantity of cryptocurrency can be done
  over a single trade
• It saves time by clearing the trade at one
  price
• Trade are completely safe as the order books
  are safe
• All the settlements can be done via single
  Binance account
• Disadvantages
• Binance Level 2 verification is required in
  order to trade in binance
• A trade order worth 20 BTC is a minimum
  requirement

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P2P Marketplace

• One of the popular P2P Bitcoin exchange is
  LocalBitcoin. With these coins you can easily
  meet with local people in your area and sell it
  in cash, PayPal or a bank deposit. Some of the
  features are
• Only takes 1 commission from the sellers.
• Sellers can set their own exchange rates.
• If any problem happens in transaction then
  there is a team which resovles the conflict
  between buyer and seller.

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Comparison Table
Type Centralized Decentralized Instant Instant
Examples Binance IDEX Shapeshift EXMO
Regulation No No No No
Liquidity High Low Moderate High
Number of assets High Moderate High High
Security Low High High High
Coin holder Exchange User User User or exchange
Fiat availability Yes No No Yes
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Conclusion

• Each and every type of exchange is different from
  each other. Each is having its own advantage and
  disadvantage. It depends upon the requirement of
  the user that which exchange he or she wants to
  prefer. There are some people who usually want
  usability of security and choose the popular
  exchanges. While others are simply dont trust
  the centralized ones and willing to control their
  coins. A lot of options are available to choose
  from however it is important to understand that a
  wrong choice may lead towards a great loss of
  funds.

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