What is a Ditigal Exchange?

Digital currency Exchange

Evidently, 2017 is a big year for cryptocurrency; most digital coins are taking off exponentially. New millionaires are being minted as Bitcoin, Litecoin, Ethereum, Ripple and other digital currencies hit their all-time highs. We’re actually seeing some sort of the modern day “gold-rush.” However, many people find buying cryptocurrency quite confusing. It’s a totally new phenomenon, different from a usual investment or stock. So, how is it different? When you purchase cryptocurrency, you don’t get shares; you buy tokens or digital coins. You do it in a digital exchange.

Buying digital coins or tokens

Platforms that enable traders to buy and sell digital currencies for an asset such as the conventional fiat currency, or any other digital currencies are called Digital currency exchanges (DCEs). In principle, these exchange businesses match sellers with buyers. If you intend to trade professionally and access a range of trading tools, an exchange that requires identity verification is preferred. You can as well use platforms that do not require an account for occasional simple trades.

When signing up for an exchange account, verification can be quite irksome due to the number of processes involved. Setting up an account may include several procedures that users may deem ‘unnecessary,’ but actually quite crucial for security and credibility of online platforms. Here are some verification steps you can expect;

Phone number verification

Evidently, 2017 is a big year for cryptocurrency; most digital coins are taking off exponentially. New millionaires are being minted as Bitcoin, Litecoin, Ethereum, Ripple and other digital currencies hit their all-time highs. We’re actually seeing some sort of the modern day “gold-rush.” However, many people find buying cryptocurrency quite confusing. It’s a totally new phenomenal, different from a usual investment or stock. So, how is it different? When you purchase cryptocurrency, you don’t get shares; you buy tokens or digital coins.

Identity

You will obviously need to submit some form of verification at some point during registration. A webcam or mobile camera may be required to complete this process. In some instances, you could be required to take photos of your ID, passport or driving license and upload them. Once verified, you will be prompted to agree to terms of a platform which imply that you are accepting to take responsibility for some activities in your account. It is essential to read your agreement carefully and pay keen attention to crucial details that could be buried in fine print.

Online threats and hacks are becoming more and more common; hence there has never been a time where cybersecurity countermeasures were of grave importance. Identity verification is imperative, in a day and age where unauthorized access to data has led to the loss of millions of dollars and significant breach of trust. Also, exchange accounts action has serious outcomes such as a binding financial obligation to complete purchases or even worse to entirely terminate the account’s services. Therefore, if account holders did not authorize a transaction, it could severely disrupt business and have a detrimental impact on an exchange’s reputation.

Holders of exchange accounts can convert their fiat currency into bitcoins, which can be used to trade without the interruption from third parties such as governments, banks or other financial intermediaries. This instills a higher degree of freedom and enhances user experience. Through Bitcoins, users can invest in ICO and buy tokens by exchanging them with their Bitcoins. This is a great way to generate returns within a short time. However, such investments bear high risks, so, be careful not to get swindled in an ICO. Digital currency is indeed a revolutionary technology with a potential to enhance financial inclusion, transform our shopping experiences and expand international commerce to levels we cannot even comprehend yet. A transition into the digital currency presents numerous advantages such as;

Cryptocurrencies protect you against fraud because they cannot be counterfeited Transactions are made faster and cheaper at lower fees Virtual currencies are not bound by exchange rates or any other rates of any country; hence, you can transact business at international level without experiencing problems.

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