1.
They allow exchanging one cryptocurrency for another, the buying and selling of coins, and the exchange of fiat money into crypto.
Crypto exchanges set the rate of the currencies — both coins and tokens. The cryptocurrency rate usually depends on the actions of sellers and buyers, although there are other factors that can affect the price.
Various crypto exchanges may have different options and functions. Some of them are made for traders, while others are made for prompt crypto-fiat exchange. Crypto exchanges — that are designed for regular traders — allow you to buy crypto and sell them with lower commission fees than on crypto-to-fiat exchanges. Also, trading platforms charge fees for withdrawing money from the account.
Basically, crypto exchanges work similarly to regular stock exchanges. The difference is that, on a stock exchange, traders buy and sell assets — shares or derivatives — in order to profit from their changing rates, while on crypto exchanges, traders use cryptocurrency pairs to profit from the highly volatile currency rates.