Crypto investment is quite a popular way to earn money amid highly volatile and unstable market. Frequent crypto rates allow one to buy and sell cryptocurrency with a profit. Let’s see how it works.
Cryptocurrency exchanges can be of two main types:
In this article, we will talk about centralised platforms (CEX), which are the best option for a beginner trader. Decentralised services are also popular but rather complicated and less secure.
What is CEX?
A centralised platform is a service that allows to buy and sell cryptocurrency in a legitime way. That means such platforms operate officially, are registered and comply with all anti-money laundering requirements and know your customer regulations. CEX is to protect users’ crypto investment against hacker attacks and provide the highest security level. For that purpose, CEX implements complex mechanisms for users’ safety, several layers of protection and two-factor authentication to protect accounts agains third parties invasion.
In fact, CEX stores users’ crypto investment on their servers, so the responsibility for funds lies on both an exchange and a user. Large and legitime platforms like Binance, Coinbase, and WhiteBIT have earned the trust of millions of users worldwide.
How Does Buying Crypto On CEX Work?
Centralised platforms are legitime, so if you see that an exchange asks for KYC verification, that means this is a CEX. Most features, such as buying crypto with fiat, futures, margin trading, staking, and others, are available only to registered clients. Spot markets are open for users with no verification.
To buy crypto on CEX, you should:
- register an account;
- pass KYC;
- add a bank card;
- deposit dollars of euros to your account;
- go to “Trade” section and pick the asset you want to buy;
- pay the fee.
Once the fee is paid, transactions proceed, and you receive coins to your account. Similarly, you can exchange cryptocurrency for fat currencies and withdraw them. Such an option is available only on CEX and for registered users.