How does the crypto currency exchange: what to look for when choosing a stock exchange or broker
In the twentieth century there was a phenomenon that stirred the whole world. The crypto currency exchange quickly attracted the attention of investors, developers, programmers and — later — regulators. It is no secret that, using such a tool can greatly increase your capital.
The first step is to define criteria, and there will be a few:
- Cryptocurrency exchange is a digital market where traders can buy and sell bitcoins and altcoins at the established market rates.
- The crypto currency exchange is an online platform that acts as an intermediary between buyers and sellers of cryptocurrency.
Kitabire very much, they’re going to be over a thousand. In this article, we consider only the largest exchange by trading volume, Binance and BitMEX, as well as a more convenient option of trading through a broker.
Shopping kernel is the most important part of the exchange. How functional code that depends on the speed and correctness of execution of all transactions on the exchange. This kernel performs several important tasks:
- Checks all place orders on the security of financial assets. Simply put, depending on the current balance of the trader allows or does not allow to give him an order to buy/sell cryptocurrencies;
- Creates and modifies records in the database when placing new orders and executing current;
- Prepares the data for display in the terminal — price levels, the values for graphs, and stock glasses, a list of recently executed orders and so on.
The wallets hold all the tools that users have taken for trading. They are hot and cold.
A hot wallet is used to receive money for the exchange and payments to traders. He is always active and must have a positive balance.
Cold wallets are used to store major amounts of cryptocurrency. They are disconnected from the Internet, which allows criminals to steal funds from the exchange with her hacking. As a cold wallet can be used an external drive, or separate computer.
This is the most important element for all traders. It needs to be functional, intuitive and convenient to work with mobile devices. Using the web interface of the exchange, the user gets access to all necessary functions:
- Registration and subsequent verification of the account;
- The input and output of the cryptocurrency and Fiat currency;
- The account balance, the ability to place trade orders for the purchase and sale of cryptocurrencies;
- Detailed statistics of all executed transactions for the purchase, sale, deposits and withdrawals;
- Stock charts for traded pairs, current orders for the purchase and sale, the history of recent orders and so on;
- Background information and quick access to support.
Now let us turn to specific exchanges. Conditionally they can be divided into two categories. First give the opportunity to buy a large number of coins and keep them in the medium term and long-term trading, this is the Binance. Second provide a smaller number of coins, but more choices in terms of trading style, namely the ability to short and use leverage. These exchanges a little bit, and the biggest one is BitMEX.
If we consider Binance, this platform is one of the best interfaces and is very good shopping core. High security multiple levels of verification and two-factor authentication. The number of traded pairs — 352, and constantly adding new coins. Has its own cryptocurrency, in which you can pay the Commission with a 25 percent discount, previously the discount was 50%. A large volume of trading provides high liquidity and traded coins added very stringent requirements in the long term can grow at least 5-10 times from current prices. The exchange is suitable for long-term investors, but during the growth of any coin terminal begins to hang.
BitMEX is more suitable for active traders. Can trade in both directions, that is, how to open a short position (short) long (long). Leverage allows you to multiply the profit, it should be remembered that increases the risk. Also have the ability to place stop orders to limit losses. But in these exchanges there are a number of drawbacks: first and foremost is the lack of regulation, constantly buggy terminal during the growth of trading activity, the frequent lack of liquidity, large commissions on Deposit/withdrawal of funds and on trading operations, and a complicated interface, difficult work for new traders.
In addition, crooked BitMEX is the margin, which may lead to premature closure by stop out (margin Cola), if there is no stop loss. It’s a little bit weird and there is bad faith conduct on the part of administrators of the exchange. It is also worth noting that exchange hacked, or rather, regularly the victims are shopping bots, which users often lose money.
For active trading, traders and investors often use the services of brokers, who, besides all the advantages inherent in criteria, do not exist and their cons. For example, the broker AMarkets regulated by the Financial Commission, while the exchange may never get full-fledged legal regulation.
Among other advantages: easy and intuitive terminal MT 4/5, a broad set of technical analysis tools, the ability to control leverage, minimum fee, high liquidity and no risk of hacking.
In conclusion, cryptonote will continue to evolve, there will be new exchanges and coins. The area is very extensive and allows on its basis to invent different know-how, as a consequence, there will be tools for investment. We can say that in the next 10-15 years the opportunity to increase your capital preserved.