The growth of cryptocurrencies is evident, and millions are investing in them. At present, there are numerous exchange platforms available in the market. Each of them varies in its characteristics, fee, consensus mechanism, transaction speed, and others.
Since the exchange platforms emerged, people got a few questions about them. So, here are the frequently asked top-10 questions about cryptocurrency exchange platforms.
- What is a cryptocurrency exchange platform?
An exchange platform facilitates the smooth conversion and trading of digital currency to fiat and vice versa. When a user performs a buy or sells action, the exchange will collect some fee. There are two types of cryptocurrency exchanges, namely centralized crypto exchange and decentralized crypto exchange.
- How do the cryptocurrency exchange platforms work?
The buyer and the seller will execute transactions on the exchange platform. At that time, the exchange will act as an intermediate person and enable a smooth transaction. They will collect the transaction fees and the gas fees for this process.
- Why use a crypto exchange platform?
If you want to make use of your digital earnings in the real world, then you have to convert them into physical currency. This is exactly what cryptocurrency exchange platforms do.
- Can trading cryptocurrency make you rich?
Well, there are cases where people earned millions of dollars using cryptocurrencies. However, it requires clever investment strategies and initial capital. Getting profit or loss is purely dependent on the type of coin you invest in.
- Is cryptocurrency exchange legal in India?
Cryptocurrencies have made an entry into the Indian market. But somehow, it is still stuck with 30% tax reductions in the profits of a crypto investor.
- Which is the safest cryptocurrency exchange?
Every cryptocurrency has different characteristics that may or may not be suitable for all investors. So, to get a reliable and convenient crypto exchange platform of your choice, build your own with the help of a professional cryptocurrency exchange development company.
- Where to exchange cryptocurrency for cash?
It is very simple to exchange your cryptocurrency for cash. All you need to do is to connect your digital wallet to the exchange platform and click withdraw. The respective account connected to the wallet will receive the cash, or you can also withdraw it in the crypto ATMs.
- How to develop a cryptocurrency exchange platform?
Depending on your requirements, the development process might vary. At the same time, creating an exchange from scratch is a long process and requires more technical knowledge as well as experience. Better, you can save it by getting a consultation from an experienced crypto exchange developer.
- Is cryptocurrency trading profitable?
The profit of a crypto trade depends on the coin you choose to invest in. As the cryptocurrency market is volatile, its prices will vary from time to time. However, you can use crypto trading bots to minimize the loss rate.
- Differentiate between crypto exchange and blockchain
Blockchain is a decentralized digital ledger technology used to store data, whereas cryptocurrency is a store of value. The former does not have any monetary value, but the latter does. Moreover, cryptocurrency uses blockchain as its core technology.