What is a cryptocurrency exchange and how does it work?

A cryptocurrency exchange is a platform that allows users to buy, sell, and trade cryptocurrencies. These exchanges can be centralized, where transactions are facilitated by a third party, or decentralized, where trades are made directly between users through smart contracts. On a cryptocurrency exchange, users can trade various cryptocurrencies, such as Bitcoin, Ethereum, and stablecoins, by matching buy and sell orders. Some exchanges also offer additional features like margin trading, staking, and lending. Exchanges typically charge fees on trades, and users must set up accounts and often undergo identity verification to comply with regulations.