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bitcoin

Some exchanges of cryptocurrencies accept fiat money such as dollars, euros, etc. and some are Bring Your own Bitcoin (or sometimes other digital assets). The differences run deeper. Here are the differences.

Entry and Exit

Crypto exchanges that accept fiat currency make life easier for newcomers to the world of digital coins. You sign up for an exchange, deposit money and you can hit the ground running. The more comfortable exchanges accept credit and debit cards (typically higher fee) while others only allow wire transfers. In both cases, you already have a card and a bank account. The same goes for withdrawing funds. You can make a transfer back to your account and spend the money as you would do with other funds. The one-stop shop is much more accessible than the other option.

With cryptocurrencies that do not accept regular or fiat money, the process is longer. You first need to buy an intermediary cryptocurrency such as Bitcoin or Ethereum before you can join the action at the exchange. You first need to pass through the first hurdle of opening an account at an exchange that does accept fiat, described earlier. This requires going through the document verification process twice.

Another option is to open a wallet, buy Bitcoin in a peer-to-peer manner and then transfer it to the crypto-only exchange. The process may be cheaper but harder for most people that want to enter this world.

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