A cryptocurrency exchange is a website or app where you can buy, sell, and trade crypto using regular money (like dollars). Think of it like a digital currency exchange at the airport—but for Bitcoin instead of euros.
Why It Matters
Exchanges are where most beginners buy their first crypto. Choosing the right exchange affects your fees, security, and ease of use.
Example
You want to buy $100 of Bitcoin:
- Sign up for Coinbase (a popular exchange)
- Connect your bank account
- Transfer $100 to Coinbase
- Buy Bitcoin at current price
- Bitcoin appears in your Coinbase account
Later, you can withdraw it to your own wallet (recommended) or leave it on the exchange (not recommended for large amounts).
Types of Exchanges
1. Beginner-Friendly (Coinbase, Kraken, Gemini)
- Easy to use
- Higher fees
- More regulation/insurance
2. Advanced (Binance, Crypto.com)
- Lower fees
- More features
- Steeper learning curve
Common Mistakes Beginners Make
- ❌ Leaving all crypto on exchange (you don't control the keys)
- ❌ Using exchanges with no US regulation (higher risk)
- ❌ Not enabling 2FA (two-factor authentication)
- ❌ Falling for fake exchange websites (always check URL)
- ❌ Ignoring withdrawal fees (can be 10-50x higher than trading fees)