How to know that right Exchanger for your crypto currency

Cryptocurrency Exchanges Explained

Cryptocurrency exchanges are online platforms where you can exchange one cryptocurrency for another cryptocurrency (or for fiat currency). In other words, depending on the exchange, it is either like a stock exchange or a currency exchange (at the airport or bank).

There are general there are the following types of exchanges (see a list of exchanges):

NOTE: The terms used below are somewhat semantical. The important thing to note is the different styles of exchange, not the exact words used to describe them.

1. “Traditional” Cryptocurrency Exchanges: These are the exchanges that are like the traditional stock exchanges where buyers and sellers trade based on the current market price of cryptocurrencies (with the exchange playing the middle-man). These type of trading platforms generally charge a fee for each transaction. Some of these types of exchanges deal only in cryptocurrency, others allow users to trade fiat currencies like the U.S. dollar for cryptocurrencies like Bitcoin. Coinbase’s GDAX is an example of this type of exchange, as is Kraken. Of exchanges, there are those run by third parties (they have a middle man who can do support and correct some problems) and decentralized exchanges and peer-to-peer exchanges (exchanges without a middle man). EtherDelta is an example of this type of peer-to-peer exchange.
2. Cryptocurrency Brokers: These are website-based exchanges that are like the currency exchange at an airport. They allow customers to buy and sell cryptocurrencies at a price set by the broker (generally at the market price plus a small premium). Coinbase is an example of this type of exchange. Shapeshift provides a similar service as well (it lets you swap on type of token for another). This is the simplest solution for new users, since it is simple and easy, you’ll pay slightly higher prices than you do on the exchanges.
3. Direct Trading Platforms: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform like GDAX does. Direct trading platforms of this type don’t use a fixed market price. Sellers set their own exchange rate and buyers either find sellers via the platform and preform an Over the Counter (OTC) Exchange, or they denote the rates they are willing to buy for and the platform matches buyers and sellers. This solution is hardly ever the best one, but it can be the only solution in some regions. In regions where trading is limited to direct trading, make sure to do some research and ensure you are using a trusted platform and dealing with highly rated users. Also, make sure to check market prices on Coinmarketcap, you aren’t buying / selling at a fixed market price!
4. Cryptocurrency Funds: Funds are pools of professionally managed cryptocurrency assets which allows public buy and hold cryptocurrency via the fund. One such fund is GBTC. Using a fund you can invest in cryptocurrency without having to purchase or store it directly.

Bottomline: In almost every case a person will want to use an exchange or broker. One will generally only want to use a direct trading platform when their options are limited. Meanwhile, while funds might be ideal to some, they tend to have a range of restrictions, GBTC is the only fund open to the public for example.

Which exchange should I use? In regions where Coinbase operates, if you don’t know what you are doing, start with Coin GDAX and take it from there. Those aren’t the only choices, but they are beginner friendly. With that in mind, all exchanges and products mentioned above are fine choices for what they are.