What is a cryptocurrency exchange and how do they work?

A cryptocurrency exchange is an online platform where users can buy and sell digital currencies such as Bitcoin, Ethereum, and Litecoin. These exchanges facilitate trading by pairing buyers with sellers and charging a small fee for each transaction. They also serve as portals to track prices, research new coins and tokens, and keep tabs on the markets. Some popular exchanges offer advanced features such as margin trading and peer-to-peer lending. To use an exchange, users typically need to create an account, verify their identity, deposit funds, and then buy and sell coins using the platform’s order books. Depending on the exchange, some transactions may require additional verification steps.