A beginner’s guide to cryptocurrency exchanges
Learn about centralized and decentralized exchanges, their functions, and how to pick the right one for your needs.
Topics to read before diving into this course:
At the end of this course, you will be able to answer the following questions:
What is a cryptocurrency exchange?
What are the types of cryptocurrency exchanges?
How do I exchange in-game fungible tokens to fiat currency?
What should I consider when choosing a cryptocurrency exchange?
What is a cryptocurrency exchange?#Copy URL to this article section
Generally, an exchange is a platform where you can trade stocks, futures, and other financial products. Its primary goal is to promote fair and orderly trading and to have systematic broadcasting of fiscal information for all financial instruments traded on the exchange. Companies, governments, and other organizations utilize exchanges to sell securities to the general public.
Binance P2P—buying and selling your crypto
A cryptocurrency exchange is a website or platform where you may buy and sell digital currencies. You can utilize exchanges to trade one crypto for another (e.g. changing Bitcoin to Ether), buy and/or sell crypto with fiat currency like the Philippine Peso or the US Dollar, or exchange in-game fungible tokens to another cryptocurrency or fiat currency.
The pricing of cryptocurrencies on exchanges is based on current market prices.
What are the types of cryptocurrency exchanges?#Copy URL to this article section
There are mainly two types of exchanges—centralized exchanges (abbreviated as CEX) and decentralized exchanges (abbreviated as DEX). To compare the features of the two, we can look at the following table:
The difference between centralized and decentralized exchanges
How can I exchange in-game fungible tokens to fiat currency?#Copy URL to this article section
To exchange in-game fungible tokens for fiat currency, the most common route is as follows:
Through a DEX, swap your in-game tokens into another fungible token supported by a CEX.
Send these fungible tokens to your CEX account.
Swap these tokens into a stablecoin or altcoin that is supported by P2P trading.
Sell your stablecoins or altcoins through P2P trading for fiat currency. It will reflect on your preferred payment method (bank account).
For example, you want to convert $HON from WonderHero to fiat currency. You will be needing a DEX (i.e. PancakeSwap) and a CEX (Binance Smart Chain network). Here are the steps you should take:
Through PancakeSwap, you can convert your $HON into $BNB (a fungible token supported by Binance).
Send the $BNB to your Binance wallet.
Through Binance, convert your $BNB to $USDT (stablecoin).
Sell your $USDT through P2P trading. Your fiat currency will be reflected in your preferred payment method (bank account).
Here is a quick guide on how to register in Binance!
What should I consider when choosing and using an exchange?#Copy URL to this article section
Aside from exchanging one token for another, you can do a lot more in cryptocurrency exchanges, such as staking fungible tokens (e.g. governance tokens) and providing liquidity to the exchange in order to reap rewards.
For beginners who are mainly interested in converting tokens, the most important things to consider in choosing a cryptocurrency exchange are swap fees, user-friendliness, and supported tokens.
Swap Fees#Copy URL to this article section
Swap fees or transaction fees are the amount of money that the exchange charges every time a transaction is made. These fees vary depending on the cryptocurrency exchange. For example, PancakeSwap charges 0.25% as transaction fee, while Biswap only charges 0.1%.
User-friendliness#Copy URL to this article section
Some exchanges are easier to navigate than others, especially if you are a beginner. For instance, PancakeSwap is a lot easier to understand than ApeSwap.
Supported Tokens#Copy URL to this article section
Some exchanges do not support certain cryptocurrency tokens. As such, it is important to check beforehand which tokens you will be trading. For example, WonderHero $HON is not supported on Biswap, but it is supported on PancakeSwap.
Biswap exchange—trading tokens
Cryptocurrency exchanges, such as Binance, allow you to convert your cryptocurrency into cash. Want to convert your cryptocurrency into cash. Here is a step-by-step guide to help you create your own Binance account on your PC.
Cryptocurrency exchanges, such as Binance, allow you to convert your cryptocurrency into cash. Want to convert your cryptocurrency into cash. Here is a step-by-step guide to help you create your own Binance account on your mobile device.
You need a verified Binance account in order to convert your in-game earnings to cash. Follow our simple guide.
Withdrawing your funds is a process that depends on the blockchain, cryptocurrency and fiat that you prefer. Extra caution must be taken to make sure that you do not lose your assets.