A cryptocurrency exchange platform is a digital market place where you can trade cryptocurrency. The cryptocurrency exchange platform provides opportunities by offering current prices in the digital currency market. In exchanges you can convert any currency pairs; For example, converting Bitcoin to Ethereum. You can also convert Fiat currency to cryptocurrency; For example, buying bitcoins by paying in dollars.

Another service of an exchange is the conversion of fiat currency (for example, dollars, rials, yuan, etc.) into cryptocurrency. In some exchanges, you can only trade in cryptocurrency; meaning you have to convert your money into digital currency first, then start trading.

Finally, exchanges allow you to withdraw, deposit or keep money in your account.

There are three types of exchanges in general:

• Centralized

• Decentralized

• Peer to peer

Centralized cryptocurrency exchange

This model of cryptocurrency exchange platform has the most users because it is more user-friendly. Both parties to the transaction use the exchange as an intermediate for security. Also, a centralized exchange reduces the possibility of losing assets at once, because of the supporting options like when somebody forgets the wallet password. Binance is an example of a centralized exchange.

One of the disadvantages of a centralized exchange is the constant risk of hacks. If you do not choose your exchange carefully, it is possible that hackers take your property. Another disadvantage is the high fees.

Decentralized Cryptocurrency Exchange

In these exchanges, users have more protection. Instead of relying on third parties for security, they use smart contracts.

If you forget your password in a decentralized exchange, returning the asset would be impossible. Transactions with fiat currency are not allowed and the fee would be really high if the blockchain network is busy.

Peer to Peer Exchange Meaning

In this model, a crypto exchange is like a wall for banners. Both parties to the transaction can find the desired price from the orders available on the site. Then they start the transaction. The peer to peer exchange keeps the traded crypto as a deposit and after both parties approved the payment, the exchange will pass the crypto to the buyer.

Security, reliability, and freedom of choice, are among the benefits of peer to peer exchange.