To buy cryptocurrencies there are many exchanges and some very famous ones, like Binance, Coinbase, e-Toro, Crypto.com, just to name a few.
One thing that all these trading platforms have in common is that they are centralized and are defined as exchange CEX, where the purchase of a specific currency is managed and regulated by third parties. The advantage are that they are very easy to use and intuitive, and you can pay directly in fiat currency.
If these are the advantages there are many disadvantages in terms of cost, since these platforms apply quite high commissions on each transaction, which even reach 4/5% of the amount.
It exists an alternative where the commissions on operations are almost zero, which represents a true direct exchange of cryptocurrencies (peer-to-peer): we talk about the DEX exchanges, like PancakeSwap!
What’s so special about PancakeSwap
Before going into the heart of PancakeSwap we need some premise to understand the mechanism behind this particular type of exchange defined as decentralized.
Taking it remotely, there are so many blockchain networks in the world, but an application built on a certain blockchain network does not work on a different blockchain. In short, you cannot transfer Bitcoins to the Ethereum blockchain, each of them has its own network and they only work on that.
DEX exchanges however always have a reference blockchain on which they were born, even if in the course of their life they try to expand with supports to new networks, and were created for the exchange of cryptocurrencies operating on this same blockchain.
PancakeSwap was created for the exchange between cryptocurrencies in a standard that works on BSC, that is Binance Smart Chain. Therefore, if the cryptocurrency you want to buy works for example on Ethereum, then it will not be present on PancakeSwap, but it will have to use a different DEX exchange like Uniswap.
How to download a digital wallet and start buying cryptocurrencies on PancakeSwap
And we come to the use of PancakeSwap: the first step is to download a cryptographic wallet: a “digital wallet” where cryptocurrencies can be stored. A cryptocurrency wallet interacts with multiple blockchains, meaning you can store different types of cryptocurrencies at the same time, such as BTC, ETH, BNB, etc., all in one place.
Since PancakeSwap and with it all the DEX exchanges are cryptocurrency trading platforms in the strictest sense, you can not pay with euros, dollars or other legal tender currency, or with any debit or credit card.
The first step to using PancakeSwap is then buy BNB. BNBs are utility token of the BSC blockchain and the main cryptocurrency of the network. The purchase of BNB can be done directly from MetaMask or TrustWallet which as an integrated function allow you to top up your cryptocurrency wallet by purchasing directly with card, where it will be the user to choose both the cryptocurrency and the currency for payment, for example euro or dollar.
Connect the crypto wallet to PancakeSwap
Now is the time to go to PancakeSwap and click connect: it is about connecting your wallet to the platform, an operation that involves a few simple clicks.
In this way the exchange can read the amount of BNB or other cryptocurrency that works on the BSC blockchain kept in the wallet and can interact with it for exchange.
Buying cryptocurrencies on PancakeSwap
There are only two other parameters to set: how much to spend and what to buy.
If the first is easy to solve, for the second you can select a cryptocurrency, always from the income menu.
Actually, the fact is that before a cryptocurrency is sold on these CEX platforms, it must pass a thousand checks and compliance standards, which take time. Otherwise, anyone can put in listing a BSC token on PancakeSwap or another decentralized platform, precisely because there are no third parties to dictate laws.
Read also: What Tips Should Crypto Investors Follow in 2022
PancakeSwap vs. Uniswap
In truth, PancakeSwap currently also has an advantage over its direct competitor, which is Uniswap, where the cryptocurrencies of the Ethereum blockchain are located.
If we put aside the commissions of the exchanges, there are also other commissions to be paid and which are applied directly by the blockchain to users for its maintenance. Exchanging cryptocurrencies on BSC costs practically nothing, while Ethereum has a unique and particular commission which is the gas fee, and at the moment they are very high.
