Beginners guide to crypto exchanges

Kyle Turnbull

July 09, 2021 · 5 min read

A guide to crypto exchanges

A guide to crypto exchanges

Navigating a crypto exchange 🤯

If you’ve made it to this blog, we’ll assume you already know a bit about Divi. Buying Divi, as well as most other cryptocurrencies, is still quite the hassle. We’re getting close to changing this through Fiat on-ramps on our mobile wallet, but until then, a reputable exchange is your best bet!

If you’re just searching for specific exchange instructions, use these quick links below. We’ve outlined the process to make it as easy as possible.  


Fiat 👉 Crypto. The on-ramp.

Before you can buy Divi, you have to have cryptocurrency to trade for it. Depending on where you are in the world, you will have different options to buy crypto with a debit card. Popular examples in this category are Coinbase and Binance, which have a global presence. The process of using a bank transfer, debit card, or credit card to buy crypto, is known as a ‘fiat on ramp’, with ‘fiat’ meaning any government-issued currency, such as the USD. Spend time finding the option that best suits your needs, in your region.

Security

Exchanges are centralized. When you deposit funds, they have complete control of them. 99% of the time, this isn’t an issue, but it’s important to take every precaution you can with your assets. We recommend the following: 

  • Establish 2-factor authentication before you send funds to your account. We recommend an option that allows back-ups.
  • Choose reputable exchanges.
  • Don’t leave funds on the exchange unless you understand the risks of doing so.

KYC

‘Know your customer’ or KYC, is a set of rules exchanges must follow when providing financial services. It refers to the collection of personal data and plays a role in combatting global money laundering. KYC is essentially an identity verification and usually includes providing personal details (proof of address), identity documents (driver's license or passport), and sometimes biometric information.

Many exchanges have the ability to offer ‘unverified’ accounts, which have daily withdrawal limits, ranging anywhere from 2 BTC - 5 BTC. The procedure and rules will differ from exchange to exchange. For most users (those withdrawing under 2 BTC worth of cryptocurrency), there will be the ability to remain unverified and not be required to conduct KYC.

Fees, fees, fees. 

They’re everywhere. You cannot escape them. You have to be careful when moving your assets around, as exchanges will clip the ticket at every opportunity. For example, you can expect fees at any point at which you move funds. 

  • When you use Fiat to buy crypto, the rate you get is usually not quite as good as the market rate. This is the first clipping of the ticket.
  • If you’re sending BTC from Coinbase to an exchange, expect a withdrawal fee from Coinbase.
  • When you’re trading on an exchange, there are maker fees (in the range of 0.1-0.5%) for a trade. It’s small, but it’s there.  
  • When you withdraw from an exchange, there is a withdrawal fee there too. It sounds like a lot. And it is. This is why Divi is building a fiat on-ramp in the mobile wallet. To make all of this easier, cheaper, and more attractive to newcomers

Basic Exchange Structure

This will vary from exchange to exchange, however, the basic structure and functionality are very consistent across the board. The basic trading screen can be broken up into a few key components.

1. The Price Chart 👇

Kucoin_detail_01.jpg

The price chart displays the historical trading price of the asset you're buying. The green and red lines are known as candlesticks and represent the price movement (green = positive, red = negative). It is the ultimate tool for experienced traders, as they seek to uncover trends. If you're new to trading and just looking to buy, don't worry about the chart.

2. Order Book/Depth chart 👇

Kucoin_detail_04.jpg


The depth chart shows you the amount of Divi people are wanting to buy, compared to how much people are selling. It’s not imperative for you to look at the depth chart to buy, however, it will give you an idea of the liquidity of the coin. If there aren’t many people selling at the price you’re trying to buy, you may have to pay a little more! 

3. Recent Trades 👇

Kucoin_detail_05.jpg

This one is pretty self-explanatory. This box just shows the recent trades that have been made by everyone. For the buyer, unless you’re interested in getting really technical, this doesn’t affect you. 

4. Your open orders and order history 👇

Kucoin_detail_04.jpg

This is where you see both open and closed trades. Here, you can check if your buy order was successful or not, by seeing how much the order has filled. If you’re buying 10,000DIVI at a certain limit, the open orders section will say 0/10,000, displaying that that none of the DIVI has been bought at the specified price. If you buy using the market price, it will fill almost instantly.

5. The order box 👇

Kucoin_detail_03.jpg

Order Box: This is where the magic happens. Where the trader can create and execute their trades. There are a few things that go on here, so let’s break down each part, as simply as we can. 

    • Market order (Instant): This option buys the amount of Divi you’re after, at whatever price the market is. If you’re buying a lot of Divi, this can mean a higher average buy price. But if you just want to get it done, this is an option. 
    • Limit order (Delayed): This is where you set a price to buy Divi at. Let’s say it’s 4 cents. When you buy some, the price may push up above your ‘limit’. The exchange will not execute any more trades for you until the price drops back to that limit. This approach will give you a better price but may take longer. 
    • Price: The price you are willing to buy the asset at. 
    • Amount: The total amount of the asset you wish to buy. 

Phew. That was a bunch of information, and probably quite overwhelming. You don’t need to tell us again. We know this process is prohibitive to most people. It sucks. It stops people from entering the crypto space, at the very first interaction. It leaves people with a bad perception of what cryptocurrency and blockchain are, and what they could be. 

That’s why we’re changing it. 

With the integration of fiat functionality into the Divi Wallet, users can seamlessly convert their fiat to crypto, and purchase an ever-growing range of cryptocurrencies. With Divi Wallet, we’re making sure that it’s as easy as possible to buy not only Divi but whatever crypto you might be after. 

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Kyle Turnbull

July 09, 2021 · 5 min read

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