In this Digital era, people tend to online platforms rather than staying on traditional platforms.
People moved from Traditional banking to internet banking, Cash cheques to Digital Cheques, even they moved from physical buying to online purchasing. With changes in technology, people are changing with time.
In almost all countries, everyone uses online payment gateways for the smooth functioning of their business or for personal use.
But if we are trying to move funds from one county to another then it is very essential that you must change the currency, if you are receiving money from other countries it is necessary for you to convert that currency into your own local currency so as you can use that money for your business or personal purpose.
As bitcoin is the global currency you just need to convert that currency into your local currency. You cannot convert it by yourself you need an exchange for this purpose.
So the exchanges are very important for the conversion of your currency and without them trading on bitcoin is not possible.
Types of Bitcoin Exchanges
On the internet, there are many exchanges but all the exchanges have two types:-
- Regular Exchanges
We will discuss both exchanges in detail. So let’s start:-
- Regular Exchanges
Regular exchanges are working on the basis of order book means people who are trading bitcoin on that exchange have not any idea who is the party behind it. An order book means it is on the basis of buying and selling orders.
In simple words- all the transactions that are happened on the bitcoin exchange are recorded as an order book and it will automatically match the buy and sell orders between the seller and buyer.
Regular exchanges provide a certain level of privacy protection because the buyer does not know the seller and the seller does not know who the buyer is since it is based on the order book.
- Peer-to-Peer Exchanges
Actually, bitcoin is mainly started to use peer-to-peer exchange because it is not like regular exchanges. It is different from the regular exchange.
There is a different type of peer-to-peer technologies like using torrent software for trading, in the case of torrent software, you will perform transactions with different peers but in actual peer-to-peer exchange means you have data about the person if you have the previous transaction with him.
In simple words, unlike other peer-to-peer technologies, the peer-to-peer exchange is used if you want to meet with another bitcoin user in your local area or if you have transactions with him, the exchange will automatically match that user with your profile according to your location.
You will get the benefit of this exchange service like cfds-trader.com because if you want to buy bitcoin from your own local area or if you do not want to purchase bitcoin from a random person- you can do this by using this exchange.
This exchange will give you all the detail about the user in your local areas like his bitcoin exchange username, ID, wallet address, and location even you can talk with him face to face.
Tip for you
You can go with peer-to-peer exchange instead of using regular exchange i.e. order book to match the buy and selling order and in the regular exchange, they will control your fund itself. Peer-to-peer exchange will help you to control your funds yourself while trading on bitcoin exchange and also provide the service to find the bitcoin user in your local area.
There are some exchange website which can be used to find the bitcoin user in your local city or if you want to go with peer to peer exchange you can go with them. Check the below exchanges:-
The first website of exchange Gemini.com is for the USA market place but the remaining exchanges bitstamp and Kraken are providing the access to the worldwide market.
From the above information, we have learned the two types of exchanges- the first is Regular exchange which is on the basis of order book means to buy and sell orders and the biggest advantage of this exchange is that it provide privacy protection at a certain level.
The second is a peer-to-peer exchange that is used by that person who wants to trade i.e. buy or sell bitcoin in his local area and he can control his fund himself.