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How Instant Exchanges Tackle Anonymity and Security Issues in Crypto: the LetsExchange Experience

Written by: Sara K

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Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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Jul 7, 2021

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Anonymity is considered to be one of the inherent features of cryptocurrency. However, in order to store or trade crypto on an exchange, you have to provide a lot of personal information. The registration process takes a lot of time, and to pass all the verification procedures, you have to submit piles of documents. 

Where is the promised anonymity then? Add the fact that submitting any information online is connected with risks, and you will see that the ideas with registration, verification, and KYC procedures are not the most convenient, indeed.

If anonymity and security are your priorities when swapping crypto, an instant exchange service might be the solution you are looking for.

Instant Swaps VS Traditional Exchanges: What’s the Difference?

For sure, cryptocurrency exchange giants such as Binance offer plenty of benefits for crypto traders. They provide you with wallets and tools to store your digital assets and trade them on the same platform. You can create orders at your preferred prices and move crypto without any additional services. Yet, this comes at the expense of anonymity and security. Traditional exchanges manage your private keys and store your assets along with your personal data. They require data verification and KYC compliance.

Instant crypto swap platforms take a different approach and offer a different set of features. LetsExchange is a prominent example as it doesn’t even require its users to sign up in order to exchange crypto. The only thing you need is your own wallet for the coins you wish to exchange.

Once you have it, you can simply select a currency pair on the LetsExchange.io website, enter the exchange amount, indicate your receiving wallet address, and send the exchange amount to the deposit address. The swap is then carried out automatically and your new coins reach your wallet in a minute or so. 

An instant swap service doesn’t match buy and sell orders of different users of the same platform. Instead, it uses its own inventory of coins and connects to liquidity providers to process a swap request. The liquidity providers are essentially other exchange platforms, the ones that require registration and data verification.

By using services like LetsExchange, you can access the liquidity of traditional exchanges without signing up with them. LetsExchange will find a relevant offer with the most convenient rate across multiple exchanges and process your swap. Meanwhile, your personal data is not disclosed and your assets are secured by your own wallet.

As you can see, this exchange process differs from the one on a traditional exchange. Let’s have a closer look at instant swap benefits using the example of LetsExchange.

Instant Exchange Pros

  • Privacy. You don’t submit any sensitive information online. Your personal and financial data cannot be stolen and misused.
  • Instant access. You can exchange coins immediately when you need it without wasting time for account verification. In the case of a traditional exchange, the verification process including KYC and AML might take up to several days. Needless to mention that the situation in the market might change, and the profitable opportunities might be lost while you are verifying your account on a custodial exchange platform.
  • Security. While a traditional exchange manages your private keys, LetsExchange offers non-custodial services. This means you have your wallet and you are the only one who owns and manages your coins. The platform just provides exchange services without storing your funds.
  • A wide range of coins. The integration with multiple exchanges enables LetsExchange to support hundreds of coins and tokens. The platform pulls liquidity from available providers to ensure fast transactions for any of the supported cryptocurrencies.
  • User-friendly interface. Most instant exchanges have a very straightforward interface. You just need to fill in the data needed for a swap and follow the instructions to complete the swap.
  • Fixed rates. LetsExchange offers its users to choose between a fixed and a floating rate. Fixed rates exclude slippage during a swap’s execution. 
  • No limitations. Many traditional exchanges either set low upper limits or require a lot of information to lift them. LetsExchange, on the contrary, doesn’t set limits for exchange amounts.

Instant Exchange Cons

A wallet is needed. LetsExchange doesn’t provide and manage crypto wallets for its users. Although it’s great for security, it might be a challenge for a crypto novice to set up and manage a third-party wallet for every coin they need.

Limited trading features. Instant exchanges don’t provide advanced trading options such as stop-limit orders, derivatives, or leverage and margin. Such platforms are great for swapping one coin for another and that’s it.

Bottom Line

Instant exchanges do offer crypto enthusiasts a way to retain anonymity and ensure the security of their assets when swapping crypto. This is probably the biggest but not the only advantage of such platforms compared to custodial exchanges. Yet, custodial exchanges beat the instant ones when it comes to advanced trading features. So, it’s up to you to decide which type of platform is more suitable for your next crypto trade.

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Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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