What is a broker?
A cryptocurrency broker is a third party between the buying party and the cryptocurrency exchange. The brokers work together with a network of other exchanges to offer sufficient offers at a reasonable price. The brokers often have an easy system and built-in wallets to store your coins. You can also almost always buy directly from the broker with ideal, bancontact and other payment methods. Brokers often have extensive live customer service in Dutch.
For the additional services they provide, the brokers charge a higher fee for transactions than exchanges. A broker mainly focuses on novice traders, people who choose convenience and want more service or do not trade very much. Examples of well-known brokers are LiteBit (NL), Bitcoin Master (NL) and Coinbase (USA).
What is an exchange?
A cryptocurrency exchange is a platform where you can buy, sell and exchange crypto coins for other crypto coins. Unlike BexChrokers, many exchanges do not accept the euro or the dollar.
On an exchange, there are multiple buyers and sellers who bid to buy and sell at the same time. Buyers can choose to buy at any price, but the order will not be completed until a seller agrees to the transaction. The equilibrium price on these exchanges is set as the last agreed price between buyers and sellers. The fees are usually lower than Brokers and they have more opportunities to trade such as limit orders, stop losses or margin trading. Examples of well-known exchanges are Binance, Kraken and Bitvavo (NL).
Kahuna advice:
Brokers and exchanges are increasingly moving towards each other in terms of fees and functionalities, but in general the advice is: