Crypto-Exchange Specifics in Canada
If you have watched the movies "The Big Short," "Wall Street," "A Good Year," or "Margin Call", then you know how the financial exchange works. The crypto exchange operates on similar principles, with the only difference being that participants do not buy and sell dollars or pounds but cryptocurrency. This knowledge is enough to give a basic definition of the crypto-exchange term, it is a platform for carrying out various transactions using cryptocurrency.
However, the "buy-sell" is not the only operation. Crypto-exchanges offer many other possibilities:
- Secure storage of funds and digital assets in cryptocurrency since even Swiss banks can envy the security of crypto-exchange platforms.
- Optimization of business processes. Financial flows are always the basis of business processes, and to achieve success, it is crucial to manage these flows competently. Crypto platforms are an excellent tool, as with their help, you can save on commission fees, transfer money without delay, and increase the audience since customers always strive to build relationships with partners who follow digital trends.
- Payment for all possible goods and services using cryptocurrency. Since crypto is an international currency and has no boundaries for use, the speed of transactions to pay for something is much faster than traditional bank transfers.
- Invest business on the crypto exchange. The value of cryptocurrencies is constantly changing, and these fluctuations are a source of income for investors. Long-term investments in cryptocurrency are one of the most profitable forms of capital boost, and on Canadian crypto exchanges, users can find plenty of auxiliary data necessary for this business.
If you are going to become a part of the legal crypto exchange in Canada, then to the above-described characteristics, we can automatically add such items as the widest selection of cryptocurrencies, even the rarest; 100% guarantee of the security of your accounts; intuitive and functional interface and round-the-clock technical support system.
Canadian Crypto Exchanges Core Categories
The crypto exchange is a complex structure, and a detailed study of it can take a long time. Like any system, crypto exchanges have their own so-called "rules of the game," knowledge of which will ensure your success in transactions. The basis of these rules are two concepts that define the mechanism of crypto exchange functioning, namely, centralized and decentralized structures.
Centralized crypto exchanges (CEX)
The very name of this form gives a hint that all transactions and operations with cryptocurrency take place under the supervision of a single authority. If we move away from guesswork to a specific definition, then we can say that a centralized crypto exchange (abbreviated CEX for convenience) is a digital platform for trading digital crypto assets with the participation of an intermediary. This intermediary is an overseeing entity between the seller and the buyer.
Like any other system, centralized crypto exchanges have a number of unique parameters that set them apart from other alternatives. The main unique characteristic is that, for security reasons, the central organization holds all customers' keys to their digital wallets. In addition, this organization also provides technical support for the perfect functioning of the crypto exchange.
This fact implies the first advantage of centralized crypto exchanges, which you will find at number one on our list:
- Exclusion of fraudulent schemes. Before a trader, client, or guest of a centralized crypto exchange makes the first transaction, he will undergo special procedures to verify his identity. This requirement excludes anonymity preservation, but contrariwise, it permits the stop of any illegal and fraudulent schemes.
- Ideal interface for crypto-freshmen. If you are just discovering the world of cryptocurrencies, then do not consider anything else because centralized crypto exchange is your choice. Crypto exchanges in this category have a simple user interface. Anyone who takes the first steps in the crypto field will easily understand all their functions.
- Extra crypto tools. However, the intuitive display of a centralized crypto exchange is not the only privilege that awaits a beginner. On these platforms, you will find a lot of useful infographics, tips, and additional information to improve your skills and knowledge.
- Top-quality technical support. The presence of a centralized organization that oversees all operations also affects platform functionality. In case of any technical problem, difficulty, or sudden error, you can contact client support for qualified assistance.
Everything in our life has a downside, so it is crucial to clarify some disadvantages. The main weakness of this system is a reflection of the strong one, namely that not only you will have access to your crypto-wallet, but also a third party, which means the lack of complete anonymity.
Decentralized Crypto Exchanges (DEX)
If a centralized system implies a certain hierarchy between crypto exchange agents, then the prefix "de" in the name of this system indicates its complete absence. Thus, a decentralized crypto exchange is a platform on which traders buy and sell cryptocurrencies, as well as perform any operations without the participation of a third party.
You may ask, who provides security on the decentralized crypto exchange? This is a valid question as if the exchange does not have access to your crypto wallet, it cannot protect your assets. However, smart contracts, which became known back in the late 90s of the last century, completely eliminate these doubts. This is a system that excludes a third party from all transactions, encodes asset data, and does not allow attackers to make changes to users' personal data. Given the fact that in the decentralized crypto exchange paradigm, only you have data about your crypto wallet, the chances of hacking such an exchange tend to be zero.
However, the high level of security on decentralized crypto exchanges is far from the only advantage:
- Inviolable anonymity. By choosing a decentralized crypto exchange, you get a guarantee of anonymity. To be a full-fledged participant in the decentralized crypto market, you do not need to undergo multi-stage verification and confirm your identity. In turn, the absence of these steps means that your personal info will remain in the shadow of other traders.
- Low commission. A simple law of trade is that if there is an intermediary, you need to pay him a commission. The absence of a facilitator means that you buy and sell cryptocurrency without the strict need to pay large fees every time.
- Credit opportunities. Cooperation between the participants of the decentralized crypto exchange can have a basis similar to the principles of the credit system. That is, one participant can provide a loan in the form of cryptocurrency to another private trader and then receive digital funds back with a profit from interest.
- New banking. Decentralized crypto exchanges offer opportunities that are superior to banking in some aspects. In particular, if for some reason you are unable to make a transaction in your online banking or in the bank's office, then you definitely can perform this financial transaction on a decentralized crypto exchange.
To have a detailed picture of the functioning of decentralized crypto exchange, it is necessary to know the disadvantages of this system. In particular, low liquidity and much more confusing functionality compared to centralized crypto exchanges, as well as difficulties with currency conversion.
Best Crypto Exchange for Canadians: Essentials For The Right Pick
New exchanges are appearing on the cryptocurrency market at the same rate as young talents in the NCAA, so it is almost impossible to keep track of every new platform.
However, we have compiled for you the top ten that you can find in any list of highly rated exchanges, as well as crucial factors that will assist along with the selecting process:
| Top-10 High-ranking Cryptocurrency Exchanges | ||||
| Exchange logo | Cryptocurrencies number | Fee Rules | Withdrawal limits | Mobile app |
| Wealthsimple | 57 | 1.5% - 2% | $25000 daily | Yes |
| Coinbase | 150+ | 0.05% - 0.6% | $25000 daily | Yes |
| Bitbuy | 24 | 0.5% - 1.85% | $5000 - $10000 daily | Yes |
| Kraken | 230+ | 0% - 0.4% | $500000 daily | Yes |
| Coinsmart | 16 | 0.2% - 0.3% (depending on trade type) | $5000 - $10000 | Yes |
| Cranberry | 38 | 0% - 2.5% | up to $10000 daily | Yes |
| Crypto.com | 300+ | Depending on the payment method | Depending on the CRO index (max. 0.75%) | Yes |
| NDAX | 33 | 0.2% | No maximum limits | Yes |
| Newton | 70+ | 1% - 2% | $50000 per week | Yes |
| VirgoCX | 60 | 0.4% - 0.95% | up to $10000 daily | Yes |
Customer & funds safety
Providing ultra-reliable security is the credo of every top crypto exchange. Therefore, the first thing to do when picking a platform is to analyze ways to create a safe environment. In particular, study what methods the crypto exchange uses to encode user data, as well as what technologies it offers, e.g., a two-stage account login system or cold wallets for storing assets in an offline format.
Cryptocurrencies diversity
The presence of Bitcoin or Ethereum on a crypto exchange has long been no-nonsense. If you are interested in developing interesting and potentially profitable crypto projects, then study the "arsenal of cryptocurrencies" on the platform. Developed crypto exchanges offer customers not only well-known cryptocurrencies but also new coins with unusual characteristics that go beyond the well-known parameters.
Crypto exchange scale, a.k. Trading Volume
Trading volume is a key indicator of the development of crypto exchanges. A crypto exchange with a high trading volume creates “three whales” on which the crypto world stands, namely, increased liquidity, numerous bidders (in other words, potential transactions), and reliability, as experienced traders do not use precarious crypto exchanges.
Crypto transactions charges
Every successful cryptocurrency transaction is always a fee payment to the crypto exchange. Different crypto exchanges set different conditions for the payment of crypto transaction charges. On par with the thesis, it is crucial to know that crypto trading fee is not a one-dimensional concept. Experts can name dozens of categories, e.g., withdrawal, taker, or trading fees. Also, the size of trading fees can vary from currency to currency, and some platforms introduce hidden fees.
All this leads to one conclusion: Before entering the crypto exchange, analyze its policy on paying crypto transaction charges.
Payment possibilities
By analogy with the choice of cryptocurrencies, top crypto exchanges create the most comfortable conditions for customers in terms of available payment options. The best crypto exchanges in Canada, firstly, provide fast speed and minimize delays. Secondly, such crypto exchanges are flexible in terms of replenishment. Thirdly, the leaders of the crypto market offer customers unique opportunities, e.g., the ability to replenish wallets in different cryptocurrencies other than those that you use in trading.
Reputation level
Audience loyalty is the main indicator of quality in any industry, and the crypto-universe is no exception. If, according to reviews on third-party resources, you note that clients of the crypto exchange distinguish it from other alternatives, emphasize exceptional characteristics, and also advise it to other users. Then this indicates a high level of trust and an unshakable reputation.
Crypto exchange access
The final chord in the best crypto exchange selection is its accessibility. If the crypto exchange is ready to provide traders with the best user experience, easy access to functionality, and comprehensive support, then this is a great sign. Such crypto exchanges are ready to take care of their customers, follow the highest standards, and do everything to increase the audience. If you are striving for development and the crypto exchange also follows this principle, then perhaps this is the perfect match to start a long-term cooperation.
Conclusion
Cryptocurrencies will determine our future. More and more everyday business processes are migrating to this digital domain. Canada is on the list of advanced countries that offer people a variety of crypto exchanges for the implementation of investment ideas, project realization, and effective management of monetary and digital assets.
On the whole, the crypto exchange is a tool that opens up many possibilities. However, to take full advantage of them, it is necessary to carefully pick a crypto exchange, analyzing every detail and evaluating the prospects for future transactions.