How to Choose the Best Cryptocurrency Exchange for You
So, you want to get involved in cryptocurrencies? Well, let me salute you on a good choice, and welcome you to the world of digital currencies. For those of you looking to find out just what cryptocurrency exchanges are, how they work and just how to go about choosing the best one, then this is the guide for you.
What is a cryptocurrency exchange?
If you’re completely new to cryptocurrency and the exchanges, then this section will be invaluable to getting you started. Well, as far as exchanges go. If you aren’t sure on cryptocurrencies just yet, it may be worth doing a little more research before you get started to investing in them on an exchange.
A cryptocurrency exchange, for those who aren’t sure, is a website where you can buy, sell and exchange cryptocurrencies – this can be done with other digital currencies, or fiat currencies like US dollars, GBP or Euros. Professionally exchanging usually takes verification of an ID, and you’ll need to open an account. While there are platforms available that don’t require quite as much verification of registration that allow you to make occasional, straightforward trades, it is arguably more secure and even more sensible to set up an account if you want to get involved in the long term.
There are a range of different types of exchanges to choose from, and which one is best for you really depends on what you want from your exchange. The types to choose from include:
- Trading Platforms – Trading platforms are websites that connect buyers and sellers. This particular type of exchange will take a fee from every transaction that takes place.
- Direct Trading – This type of exchange offers direct person-to-person trading. Individuals from different countries can exchange currencies over this type of exchange. Direct Trading platforms don’t have a fixed market price and each seller has the opportunity to set their own exchange rate, allowing for more freedom.
- Brokers – Anyone can visit these websites to buy cryptocurrencies, though this is at a site set by a broker. Brokers for cryptocurrency aren’t unlike foreign exchange dealers.
What do you need to look out for?
Now we come to choosing the right exchange for your needs. There are a variety of things that you need to consider when it comes to choosing the right exchange, and we’ve gathered together just a few for you. From looking into reputation, to ensuring you’ve checked their geographical requirements, here are a few things you need to consider:
- Reputation – The reputation of a cryptocurrency exchange is something that you need to pay attention to when it comes to cryptocurrency exchanges. The best way to find out the reputation that an exchange has is by looking into reviews from not only trusted sources, but from real users too. Make sure you get a good feel for everything that has to be said about the exchange, and from here it should be easier to work out whether or not the exchange is the right one for you for your future in cryptocurrencies.
- Payment Methods – Payment methods are probably one of the most important things to look into when it comes to an exchange. What payment methods do they have available? Can you only pay by credit and debit cards? What about wire transfers? Is PayPal or any other card-less payment available for you? If there are limited payment options available to you, it may be worth looking elsewhere unless you feel comfortable in the single payment option. Purchasing cryptocurrency with a debit or credit card will always require ID verification when it comes to withdrawals and deposits, as there is a higher change of fraud. Wire transfer also takes a long time, so it may be worth searching for an alternative payment method.
- Fees – Fee-related information should be fairly easy to find on the website of your cryptocurrency exchange and if this isn’t the case, avoid it at all costs. You need to be able to understand all deposit, withdrawal and exchange fees before you start trading, so you aren’t caught out with any unexpected costs! Fees will differ depending on the exchange you use, to make sure you do your research.
- Verification Requirements – Verification is a big part of cryptocurrency exchanges. Practically every bitcoin trading platform in the US or the UK will require some form of verification of ID, though there are some that will allow you to remain completely anonymous. While verification can seem like an unnecessary stress, it does add security and protects you and the exchange from all kinds of scams.
- Geographical Restrictions – Unfortunately, some cryptocurrency exchanges can, and do have geographical restrictions. Some are only accessible from certain countries, or may not have enough support in some countries compared to others, so it’s worth investigating this before you set your heart on any one exchange. You need to make sure that the exchange you’re signing up for can give you full access to all of the tools and functions it has to offer from the country that you live in.
- Exchange Rate – The exchange rate is almost as big of a part as the fees, if not more so. Different cryptocurrency exchanges will have different exchange rates, and you’ll definitely be surprised at just how much you can save if you just shop around a little. Rates can fluctuate a lot, so remember that the exchange rate you sign up with might not be the one that sticks around.
Overall, the cryptocurrency exchange you choose will ultimately come down to your personal preference. While there are things to avoid like high fees and bad exchange rates, the geographical location and exchange type will differ from person to person as to preferences. Look around, and research each exchange as much as you can – you never know what information you could come across, and what gems there are hiding in amongst the cryptocurrency exchanges of the world.