Peer-to-peer crypto trading is the most popular digital innovation to buy and sell Bitcoin. It's one of the oldest methods to trade and operate Bitcoin. But, the early P2P marketplace had a low-security standard and a complicated interface. The technology changed it completely over the years to adopt various cryptocurrency exchanges worldwide, and most complexities and disadvantages disappeared. Nowadays, P2P Cryptocurrency Trading Platform managed by large exchanges of the world such as Binance and B4U Wallet are the best in high-security standards and seamless trading experience. Still, there's an issue that has not changed since the first P2P adaption, the risk.
Do Understand the Type of Crypto Exchanges
There are several ways to invest in Bitcoin and various other cryptocurrencies. Before you invest in crypto, make sure you know the core difference between the centralized and decentralized cryptocurrency trading platforms.
Centralized Crypto Exchange
The first common type of exchange is the centralized exchange. Popular exchanges that deal with this type of category are Coinbase, Binance and some other popular cryptocurrency trading platforms. These are exchanges offered by private companies that require the personal information of the trader/user. They are somehow a centralized controlling factor in the ruling of the crypto community. They are also not inline with the basic philosophy of Bitcoin and Blockchain. Instead, they have their very own private servers, and if the server somehow has to compromise of an attack, the whole system could get an effect of that cyber-attack. The threat could also result in a steal of user's sensitive data.
It is also a fact that when you buy and store cryptocurrency in some centralized cryptocurrency exchanges, it's stored in their wallets instead of your personal wallet that you have the keys of. In case of fraud or a scam, you would not be in a situation to claim your digital money because of its centralized behavior. This is why it's important to practice safe storage before you rely on centralized cryptocurrency exchanges.
Decentralized Crypto Exchange
Decentralized exchanges are completely inline with the work that Bitcoin does. A decentralized cryptocurrency exchange has no central controlling authority like governments and banks. Instead of A private server, they have authority nodes of users' very own computers that participate in the mining process of cryptocurrencies and earn rewards. If an individual node turns off, it does not affect cryptocurrency trading platforms' operations because thousands of other computers will continue running the decentralized network. The individual computers become a node, mine crypto and go, so there is no single regulatory body that controls the network. Users do not need to declare their identifications, and they are free to use the platform.
Don't be tricked by Scammers
There is scams news about people losing their money through fake cryptocurrency trading platforms and Ponzi schemes. So, safety and security are the top concerns to invest in various cryptocurrencies. Whether you are new to the crypto world or want to trade your crypto money like a pro, this article will help you understand the science behind cryptocurrency exchanges and how you can start earning your extra income in the right way.
How You Can Invest & Earn Extra Profit from Crypto Exchange
Investing in Cryptocurrencies is similar to investing in stocks, except that the crypto is more volatile, and stocks take more time for a good return on investment. Here are the steps to investing cryptocurrency trading platforms.
- Open your account at a cryptocurrency exchange that is more trustable and popular.
- Download the official crypto exchange wallet (mobile or desktop) from the company
- Deposit your funds in fiat or other cryptocurrencies that the wallet supports
- Boom, you can buy, sell or exchange Bitcoin and other various cryptocurrencies through the wallet
In some cases, you can directly buy crypto through a credit card or your bank account while some platforms do exchange only with Bitcoin (BTC). The rules and regulations may vary from country to country, as some countries may require more private information to verify that you are a legitimate user.
Final Thoughts
The Science of investing in Bitcoin and various other cryptocurrency exchanges is not much different from investing in stokes. In crypto, you need to open an account with a trusted exchange company, while with stocks; you need to open an account with a third party or a broker to deposit your funds. Once you have the credits in your cryptocurrency wallet, you can directly start trading digital currencies.
