How does fee-less Swissblock cryptocurrency exchange Work? Innovative features and 0% commission
Working of cryptocurrency exchange is a frequently searched term as people are more interested to learn everything about what’s going on at the backend of the exchanges they interact with. At the front end (with respect to the user interface) almost all the exchanges of the type are almost similar – but that’s not the case when it comes to how these exchanges operate.
After Bitcoin popped up there was no platform to buy and sell cryptocurrencies until a year later. The only way to buy it was either pair-to-pair trading or mining it. One involved huge risk and the other was not feasible. In 2010 a portal similar to PayPal called Bitcoin market was created to offer Bitcoin buying and selling services using payment systems – the first cryptocurrency exchange. Just a year after, dozens of cryptocurrency exchanges were there for people to trade a wide range of cryptocurrency pairs with ease.
Types of Cryptocurrency Exchanges:
There are mainly three types of cryptocurrency exchanges.
- CEX (Centralized Exchanges)
- DEX (Decentralized Exchanges)
- Hybrid Exchanges
To begin with, Centralized Exchanges are the most popular exchanges in the market as they have the largest number of users. Centralized Exchanges have almost full control over users’ funds. These are profit-oriented companies run by a single person or an organization. Users have to open an account with these exchanges. Since these are well-regularized platforms and follow the rules to operate, users go through a KYC (Know Your Customer) process before making the exchange fully operational. Because these exchanges hold users’ funds, they become a very potential target for hackers to sneak in and steal the funds. Centralized Exchange undergoes rigorous security tests to act against these attempts and keep most of the funds in cold wallets (offline wallets).
Decentralized Exchanges are not owned by anyone but the users. The developers get their fair share from trading fees but these platforms don’t have any control over the traders’ assets. Users can interact with these exchanges by connecting their wallets like Trust Wallet or MetaMask.
Hybrid Exchanges are the contra-mix of the aforementioned exchanges and combine the features offered by both. several platforms offer the hybrid interface: a simple interface using DEX with fewer options to trade and advanced options to help experienced traders trade on CEX.
How do cryptocurrency Exchanges make money?
Cryptocurrency exchanges earn money in various ways, the first being the trading commission. Whenever you execute an order there’s a fee collected in the exchange for providing you these services. Swissblock Exchange, however, is the first and only cryptocurrency exchange that charges no fees from the users for any type of trading activity across the platform.
The other way typical cryptocurrency exchanges work is earning through the spread. Spread is the difference between the selling and buying price of an asset.
A listing fee is another way for the exchanges to earn. Whenever there’s a coin offered on an exchange, the exchange charges a hefty fee from the coin’s team. And if it requires a launchpad for an ICO, the fee charged increases even more. These coins get more exposure to new traders and it is shared by the exchange on different platforms for marketing purposes – it’s worth paying.
Swissblock: Working of a Cryptocurrency Exchange
DEXs work on the core principle of the decentralized nature of cryptocurrencies. There are no control authorities and there are no regulations to control the process. These exchanges cannot be easily hacked or shut down by governments. Since users have more control over their assets and there’s more transparency, people who want to stay anonymous choose these platforms.
Working with CEX or Centralized exchanges is complex compared to DEXs. Trusted by big investors and institutions, these platforms have the highest trading volume and number of daily visitors. Centralized Exchanges have to abide by the regulatory trends and abide by the local and international laws to function. Since these platforms are offered by some organization or a person, governments and investors can hold that entity responsible if anything goes wrong. CEX or a centralized cryptocurrency exchange work like a traditional stock exchange. The governing company charges for the services of crypto-to-crypto swaps and fiat to crypto swaps and vice versa.
The Cryptocurrency exchanges function as a custodian to hold investors’ funds like a bank. All kind of trading takes place on the secure databases of the exchanges like Swissblock. Unlike DEXs, these exchanges don’t give traders private or public keys but login details to their accounts to access their funds.
Swissblock is one such Cryptocurrency exchange that leverages a multi-node approach to tackle the high traffic and improve the scalability for traders. The platform offers all kinds of trading including stocks free of cost. Combining accessibility, security, and speed, Swissblock is becoming one of the most loved crypto exchanges by crypto enthusiasts.