Exchange

An Exchange is a platform or marketplace where digital currencies, goods, and other financial instruments can be bought, sold, exchanged, and transferred for other digital currencies.

If you want to buy some bitcoin (BTC), the easiest way is probably going to an exchange, depositing some money, and then “exchanging” that money for Bitcoin.

Exchanges come in two primary flavors, centralized exchanges (CEX) like Coinbase, and decentralized exchanges(DEX) like Uniswap or dYdX.

Exchanges have evolved into more than just buying and selling cryptocurrencies and acting as your personal wallet.

They offer a vast selection of products and services.

Exchanges make available huge amounts of real-time data on asset prices.

Since the majority of customers are brand new to cryptocurrencies, exchanges are turning into learning platforms with asset and market analysis, how-to articles, and help sections including glossaries and guides to various assets and digital asset projects.

Many exchanges, depending on jurisdiction and where they’re based, allow access to trading derivatives and on margin.

Recently, exchanges have started to let customers earn rewards through staking, borrow crypto through crypto lending, and take cash loans using cryptocurrencies as collateral.

The largest exchanges offer special custodial services, data feeds and professional market analysis, and trading services to businesses, enterprises and institutional clients.

Related Terms

Digital Currency

Digital Currency, also called digital cash, digital money, or virtual currency is any form of currency or money-like asset that’s only available in purely digital or electronic form.

Bitcoin (BTC)

Bitcoin (BTC) is most well known as a digital decentralized cryptocurrency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries, such as payment gateways or banks or routing services. Think of bitcoin as Internet money, that you can send and receive directly, to and from anyone, and you can use it to pay for stuff.

Digital Currency Group (DCG)

A U.S.-based conglomerate of 7 cryptocurrency-focused companies, including Genesis, Grayscale, Coindesk, Foundry, TradeBlock, and HQ. DCG’s mission is to incubate, acquire and operate businesses that provide financial and professional services to financial institutions, corporations, and startups.

Peer-to-Peer (P2P)

Describes the sharing of data or assets between 2 or more parties without any central authority making the transaction happen. P2P exchanges tend to offer transactions that are censorship resistant, cheap, private, and secure.

Geoblock

Geoblocks implemented by crypto services like cryptocurrency exchanges usually block the IP addresses of large collections of users from connecting to their websites or mobile applications. These blocks are accomplished by comparing a user’s IP address to a list of allowed and not allowed IP addresses. IP addresses identify a person’s location in the world, and crypto services can use that information to block specific locations by country, region, state, city, or even just an individual IP address.