Cryptocurrency Exchange

What Does Cryptocurrency Exchange Mean?

A cryptocurrency exchange is any system that operates on the basis of trading cryptocurrencies with other assets. Like a traditional financial exchange, the cryptocurrency exchange’s core operation is to allow for the buying and selling of these digital assets, as well as others.

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A cryptocurrency exchange is also known as a digital currency exchange (DCE).

Techopedia Explains Cryptocurrency Exchange

To really understand cryptocurrency exchanges, think about the ways that these new types of exchanges are different from traditional financial exchanges. Cryptocurrencies are inherently unstable in terms of value and sourcing. Cryptocurrencies like bitcoin have been associated with major disruptive events where bitcoin value changed dramatically over a short period of time or where major exchanges went under due to theft, fraud, or other problems.

Cryptocurrency exchanges have to build in protections from some of these events. However, these exchanges do serve as a key vehicle for liquid use of cryptocurrency assets.

In other ways, the best cryptocurrency exchanges work just like traditional exchanges. On many of these platforms, cryptocurrency buyers and sellers can make limit orders or market orders, and the brokering process works like it would for any other kind of asset. The cryptocurrency exchange helps with the transaction and collects the fees. The difference is the underlying asset – bitcoin or Ethereum or some other cryptocurrency that does not have the same valuation properties as a national currency.

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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…