Many people want to engage with crypto trading or investment and wonder how to buy and sell cryptocurrencies. This article will explain the main options for purchasing digital assets.
We begin with decentralized exchanges (DEX). Such platforms allow users to buy cryptocurrencies and sell them directly from their wallets. Users’ funds do not remain on an exchange – they move across wallets. Since investments are not stored on a platform, DEX is not responsible for their safety. It means that clients exchange crypto assets at their own risk. DEXs are often used by experienced traders when they need to make fast transactions with not large amounts.
Popular DEX platforms:
Buying Cryptocurrency on CEX
The next way of buying cryptocurrency is a centralized exchange (CEX). Such platforms have a central body that controls transactions. Unlike DEX, CEX stores users’ funds on its wallets and servers, so the responsibility for their safety lies on both the platform and the user.
Some simple functions, such as spot market trading, are available for all users with no verification, but all the rest trading tools require KYC. KYC (know-your-customer) is a process of clients’ checking that comes in a few stages:
- person’s identification;
- determining if a client is a real person;
- comparing user’s data with official documents;
- verification of the address of the client;
- classification the client upon the risk category.
The data is collected and analyzed based on the documents the user provides to the exchange.
Once the KYC process is completed, the user receives access to all trading features:
- trading with leverage;
- buying crypto with fiat and converting it back into fiat currencies;
- staking coins;
Even though it seems complicated and time-consuming to pass KYC, it is worth that because CEX provides a high level of security for users’ data and funds and operates officially, complying with regulators’ requirements. That means clients are protected against various mechanisms and schemes for money laundering and hackers schemes.
Examples of CEX: WHiteBIT, Binance, KuCoin, Huobi Global, etc. These are the most credible services for cryptocurrency to buy.