Definition of Crypto Exchange
Crypto exchange is a place for buying and selling crypto assets. Likewise in Indonesia. Its function is to exchange conventional currency, namely rupiah, with various assets contained in crypto. Some of the most popular examples include Bitcoin, Litecoin, Ethereum, and others.
Traders can also make transactions with other crypto assets through the Pintu application. For example exchanging 1 inch for Bitcoin, Ethereum for bitcoin, and other exchanges. Up to 10 currencies available at the Door which can be exchanged. This can be a promising opportunity to trade worry-free as long as you choose the right platform.
Moreover, crypto has become a legal commodity as the subject of futures contracts or derivatives traded through futures exchanges. With Pintu that carries the jargon of “easy investment”, everyone can invest easily, safely and of course generate profits.
Before there were cryptocurrency exchange platforms, getting Bitcoin was much more complicated. You can’t just open the Zipmex app and decide how much crypto assets you want to buy. At first, the easiest option to be able to mine Bitcoins is to load the Bitcoin software on your laptop. Apart from that, another way to get Bitcoin is to find someone who is willing to sell directly to you.
While this method may seem appropriate to some communities who have been using Bitcoin since its inception, the fact is that time has evolved. Developments that exist today, offer convenience and more security to be accessed by many people today. Even in Indonesia itself, there are already 13 cryptocurrency exchange platforms that have been legalized by CoFTRA and Kominfo.
How Cryptocurrency Exchange Platforms Work
Cryptocurrency Exchange Platform is a platform that can bring together buyers and sellers. The way this platform works also has some similarities to exchange for other assets, such as stocks. But, of course it has some differences with other traditional exchanges which have fixed trading hours, while cryptocurrency trading is active 24 hours a day and 7 days a week.
To be able to carry out trading activities on the exchange, you need to enter funds in the account you have on the platform. After the buyer enters the nominal funds using fiat currency, then the buyer can carry out the “buy” process on the exchange, this way later you can buy Bitcoin or other altcoins at a price that you have chosen and believe in.
After that, buy and sell orders will later be added to the “order book”. The order book itself is a list of the amount of cryptocurrencies you want to sell or buy, as well as the price you want. In simple terms, acting as a third party that brings the two together.
It is important for you to know that exchanges cannot determine the price per piece of Bitcoin coins or other crypto assets. The law of supply and demand is what will determine the selling and buying prices of crypto assets. For this reason, you often find slight differences in prices on one exchange with another.
Currently, there are 13 Indonesian Cryptocurrency Exchanges that have been regulated by the government such as CoFTRA and Kominfo. However, it is very important to look at the history of security on an exchange, before you decide to trade on the exchange.
How Do Cryptocurrency Exchange Platforms Make Money?
A cryptocurrency exchange platform makes a profit from commissions, listing fees, and market making. This commission is later paid for the trade facility services between buyers and sellers. The commission charged later can be as much as 0.1 percent per transaction and because of the low trading fee, it can result in even higher trading.
In addition, another source of income from registration fees. Many exchanges opt for token and coin listing services to drive revenue. By setting up Initial Exchange Offerings (IEOs), Security Token Offerings (STOs), and Initial Coin Offerings (ICOs), cryptocurrency exchange platforms can collect a percentage of the funds raised from offerings. Not only that, a large revenue stream generated by other cryptocurrency exchange platforms is through market making or the creation of liquidity for certain financial instruments. In market making itself, it consists of buying and selling crypto assets on exchanges at slightly higher prices than other exchange platforms.
Want To Start Trading But Don’t Know How To Get Started, How?
The first thing you need to do to start trading is to choose a cryptocurrency exchange platform. After that, before you go through the registration process, you need to check the validity, exchange rate, reputation and security of the exchange platform.
After making sure that the exchange platform is trusted, you can then carry out the registration process and perform verification (KYC). After all your data has been verified, you can immediately start trading activities, starting with transferring the initial amount of money to your account. Some exchanges may accept payments by credit card, fiat currency transfer, or other forms of payment in exchange for crypto assets or cryptocurrencies.