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Cryptocurrency Exchanges



 

What is a cryptocurrency exchange? 

 

To follow the development of the cryptocurrency industry, exchanges have been invented to simplify transactions between sellers and buyers. Cryptocurrency exchanges are online platforms that enable registered users to trade and exchange one kind of digital currency for another one based on the market value.

Exchanges play an essential role in the cryptocurrency economy by offering a marketplace for trading, liquidity, and price discovery. They are the most active category, representing 90% of all value sent by services.

It is difficult to know the exact number of crypto exchanges at any moment, as they do not need to register with a central authority. What is certain is that there are many, over 400 crypto exchanges. 

 

Trading Exchanges Types

 

The distinction between the different types of exchanges is made by two main factors : compliance with regulators, and the entity that controls funds while trading. There are many different types of exchanges, they include: 

 

  • Decentralized exchange is operating on an open blockchain, with no intermediaries. As they are non-custodial, they afford their users a total control of their funds. Fees are usually more favourable for clients, but this benefit is offset by the low liquidity these exchanges can offer. 

 

  • Centralized exchange employs a third party who serves as an intermediary to ensure the stability of the trading environment, monitor the trades and manage the order book. Most of the well-known digital currency exchanges are centralized and this article focuses on their analysis.

  • Hybrid exchanges are combining the security of decentralized networks with the user friendliness of centralized exchanges.

 

The largest crypto exchanges in the world belong to the second type. Binance, Bitfinex, Kraken – all of these platforms are centralized.



Key Facts of Centralized Exchanges

 

The idea of centralization refers to the use of a middle man to conduct transactions. Just like a bank setup, where the customer trusts the bank to hold their money, which offers security and monitoring that the user can’t accomplish on his own. In addition to the help that offers the centralized exchange, it also provides a network where users could find trading partners. 

 

There are new centralized cryptocurrency exchanges all the time. However, not all of them will be successful, and it's not uncommon for these exchanges to fold. The success or failure of an exchange is dependent upon a large number of factors: 

 

  • Trading volume

The success or failure of an exchange depends on many factors. One of the main factors is trading volume.  The time it takes for transactions to be done could be influenced by volatility. The price of a coin could change between the time the transaction is started and the time it is finished. The higher the trade volume, the faster the transaction can be processed, and the less the volatility is to be a problem.

  • Security

It’s a key component of a successful centralized exchange. To reinforce their security, exchanges employ cold storages ( hold cryptocurrency tokens offline), Know Your Customer (KYC), end to end encryption , email verification...

  • Transparency 

Transparent exchanges inspire confidence that they are authentic. However, some exchanges make profit using illegal methods (Wash trading) by feeding misleading information to the market.

  • Liquidity

A high level of liquidity means you can easily buy and sell cryptocurrency as the market is full of fellow buyers and sellers. 

  • Costs

The costs could increase or decrease with the trading volume, and they are different from an exchange to another.

  • User Experience

The features that facilitate navigating the interface, the level of anonymity that  is guaranteed, and also the feedback of users are some of  the criterias to settle on an exchange. 

  • Exchange’s Reputation

The reputable industry sites and the users reviews will reflect the success or not of an exchange. 

  • Customer Support

A professional customer support makes the user feel valued, it is important to know if it is responsive and knowledgeable.

 

 

Pros & Cons 

 

Focus on Binance 

 

Binance is the largest cryptocurrency exchange in the world with the highest trading volume, it appears in almost every ranking and is considered to be one of the most popular cryptocurrency exchanges in the crypto market, over 1 billion $ in trades are executed on Binance every day. In addition to facilitating the P2P trading, it also offers a wide range of services through its features, including custodian services and lending. It covers spot and derivatives markets and it operates both a centralized and a decentralized exchange. Recently, it also took over the crypto data provider.

Binance boasts of being the largest crypto exchange by volume, and here are its main advantages : 

 

  • Affordability 

Binance has the lowest trading fees among exchanges. The next table gives a closer look at fees across some of the top crypto exchanges. It offers the lowest taker fees at 0,1% for VIP0 (there are many VIP levels depending on the user's trading volume), and even lower rates (-25%) when paying with their exchange tokens BNB. 

In crypto exchanges we talk about the couple maker/taker. A maker is the one who impose his purchase or sale price and wait for a taker to decide to order him. Conversly, the taker is the person who will buy immediatly at the market price, responding to the demand of a maker.  





Exchange

Trading Fees

Funding Fees

Discounts

Maker

Taker

Deposits

Withdrawals

Exchange Token Discount

Volume Discount

Binance.us

0.1%

0.1%

No

No

Yes - 25%

Yes

Binance.com

0.1%

0.1%

No

Yes

Yes - 25%

Yes

Bitfinex

0.1%

0.2%

No

Yes

No

Yes

Bittrex

0.35%

0.35%

No

Yes

No

Yes

Bitmex

0.025%

0.075%

No

No

No

Yes

Bitpanda pro

0.1%

0.15%

No

No

No

Yes

Blockchain.com

0.2%

0.4%

No

No

No

Yes

BTC Markets

0.05%

0.2%

No

Yes 

No

Yes

Bybit.com

-0.025% (Rebate)

0.075%

No

No

No

No

CEX.IO

0.16%

0.25%

No

Yes

No

Yes

Coinbase

N/A

Variable flat fee

No

No

No

Yes

Coinbase Pro

0.5%

0.5%

No

No

No

Yes

 

  • Easy Trading

Binance’s strength is in its comprehensive crypto offering. Moreover, it has an intuitive user interface that allows for easy switching between advanced and basic views.

  • KYC Requirements

To qualify for higher amounts, users have to pass their  KYC test. The test requires you to send them a picture of your ID and selfie. 

  • Security

Employing KYC requirements, end to end encryption, double authentication 2FA, and other features, the transactions and funds on Binance are secured with the system SAFU 

  • Liquidity 

The high trading volume of Binance provides real and high liquidity.

So why have we chosen Binance ?

Peculium has chosen Binance as the main exchange for our App. This decision was based on many of the highlighted and contributing factors mentioned above, including the highest trading volumes, the platform's security, and the low costs. Furthermore, Binance is very selective in which cryptocurrencies it decides to lists. The exchange performs rigorous due diligence to determine the worthiness and consideration. The candidate project and underlying cryptocurrency must be able to demonstrate and prove its value, viability, and attractiveness before it can be listed on their exchange.

Binance have vetted our project, App, and PCL token and have concluded with great confidence that Pecuilum would be like a viable and welcomed addition to their exchange and App enabling environment. This acceptance by Binance is a great accomplishment for us, and we look forward to establishing a more strong, mutually beneficial relationship with them for years to come. The successful combination of Peculium and Binance will help us establish greater trust and credibility with our community and client customers. We are better together! 

These powerful and combined advantages will help us provide excellent product quality, the security needed to preserve user money/assets, and an optimal and attractive cost structure. We believe this will instill strong confidence and trust from our users and client customers. It will also demonstrate a heightened level professionalism, business maturity, and a commitment to excellence that we all take very seriously. 

Our new Application SAIΞVE is already connected to the user's Binance account. An article will be soon available in our blog to help you how to connect your SAIΞVE account to Binance. The extension of our App on to other exchanges is currently being planned for the future.


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