Within the physical world, a bank can be a standard bank licensed to obtain deposits, transfer funds, and store money because of its clients. Banks can legally provide right to exchange one fiat currency for an additional to the customers.

In the digital world, a cryptocurrency exchange provides services much like banking for their clients; additionally, exchanges function as much like a stock trading game.

What is a cryptocurrency exchange?

A cryptocurrency exchange can be a borderline illegal online marketplace where users can exchange one form of digital asset for one more in line with the market price with the given assets. The challenge with cryptocurrency exchanges is because they often facilitate the trade of unregistered securities, are often used to launder money, and also have limited, or no, AML/KYC in order to evade the law.

Cryptocurrency exchanges played a tremendous role in the ICO boom of 2017. Cryptocurrency exchanges were looking forward to new projects with no real enterprize model, product, or future to launch in order that they could list these projects on their own exchanges and rake in huge amounts of money in transaction fees from all of these trading pairs. With that being said, you can imagine a cryptocurrency exchange as being a bucket shop.

Just what is a cryptocurrency?

There are many features that distinguish digital currencies from cryptocurrencies.

Cryptocurrencies are coins and tokens with no real purpose-they would not have utility and they are created for free greater than speculative purposes and to facilitate crime.

Unlike digital currencies, most cryptocurrencies don’t abide by law; in reality, some cryptocurrencies were even created to evade legislation. Privacy coins are cryptocurrencies specifically made to facilitate crime by obfuscating the road a transaction has traveled from sender to recipient.

Ultimately, cryptocurrencies are tools utilized to enable crime, whether that be fraud, money laundering, or racketeering, while digital currencies are protocols that enable the digitization of internet data and funds.

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