Having trouble understanding different types of crypto exchanges? If so, you’re not alone. The crypto world isn’t for everyone, as things can be confusing sometimes. In this blog post, we’re going to talk about different types of crypto exchanges. This will help you in determining what type of exchange you should choose for your crypto ventures. So read on to learn more.
Different Types of Crypto Exchanges
Crypto exchanges work on different models, with each model having its own terms and conditions. Their policy to follow a different set of operating rules is what sets them apart from each other. There’re five types of exchanges available out there. Let’s have a look at them below:
- Centralized Exchanges
- Decentralized Exchanges
- Broker Exchanges
- Instant Exchanges
- Hybrid Exchanges
Centralized Exchanges – The majority of crypto exchanges fall within this type. The most popular names with centralized concept include Bitfinex, Binance, Kraken, etc. Such exchanges have a centralized regulator, which is responsible for everything, including its security, functionability, and upgrades. They have a team of representatives to take care of public relations. Such exchanges run on centralized software.
Decentralized Exchanges – As their name suggest, decentralized exchanges have no single entity regulating them. The whole exchange is comprised of a set of Smart Contracts that allow trustless exchange of tokens. Etherdelta and IDEX are the most common examples of such exchanges.
Broker Exchanges – Coinbase is the only exchange that falls within broker category. However, it can also be considered as a centralized exchange. It’s fully compliant with all the rules and regulations in the United States and any other location where it operates. This is why any American can use this exchange without any restriction.
Instant Exchanges – Godex, Shapeshift and Changelly are the most popular names falling within instant exchanges. Such platforms allow you to quickly exchange any digital currency for another. It’s fast and simple, and the users are not only charged a miner’s fee, but also pay higher exchange rates.