Tips on How to Choose a Crypto Exchange
Like any form of investment or business, cryptocurrency business and investment involves a series of steps. One of those steps is doing research on the kind of business you are venturing into before starting to determine how to buy cryptocurrency that suits and can enhance the business.
Your research will cover how to do the business, major pitfalls to avoid, things to note, and more. Likewise, in the cryptocurrency business, you need sufficient knowledge to thrive and you can get that from Paybis, especially if you are new to trading.
If you are a new cryptocurrency enthusiast and need to choose a crypto exchange, this article contains a few tips for you. There are many secure and legitimate crypto exchanges; you just need to know where to look. There are a few things an exchange must possess to make it the “best crypto exchange” for you. Thus, below are tips to follow on how to choose a crypto exchange that is ideal for you.
1. First Things First, Be Scam-Sensitive
One of the first things you want to confirm about the cryptocurrency exchange is that it is legitimate. There are great cryptocurrency exchange platforms in the cryptocurrency market, but it is equally easy to fall prey to scam sites.
When it comes to trading cryptocurrency, you cannot be too careful; a fraudulent crypto exchange will have a significant impact on your investment. Meanwhile, many exchanges have shut down, been hacked, or compromised due to fraudulent activities – a good example is Mt. Gox.
To confirm that the service offers legitimate service, first ensure there is a physical address linked to the exchange. You want to consciously steer clear of an exchange with an address that is not readily available. First off, that is proof of the exchange’s transparency, and also, it is easier to address issues when there’s an address. Additionally, you will have a good sense of legal ramifications of your crypto investments when you know the physical address of an exchange.
2. Research the Exchange, Note Its Reputation
Reputation is a big deal when it comes to cryptocurrencies and exchanges; it says a lot about the exchange. Even before you register with the exchange, you want to check its reputation; how trustworthy is it? Give maximum time towards researching the cryptocurrency exchange you have your eyes on and find out what other users are saying. One of the best ways you can confirm the credibility of a crypto exchange platform is through reviews.
Additionally, consider what the exchange says about itself and whether or not it has had issues in the past. Every cryptocurrency exchange has its issues, but not all handle them well, and how an exchange handles problems is important.
Dig deep in your research, checking out potential negative stories about the exchange platform, especially those kept away from potential customers. Thorough research on the exchange is necessary because you will be entrusting your crypto assets to it; you want them safe.
3. The Higher the Security, the Better
A standard cryptocurrency exchange should be extremely secure, particularly considering the sensitivity of the assets you will be storing with it. While user-friendliness is important in the best crypto exchanges, this feature should not fizzle out high security. You probably don’t want a cryptocurrency exchange that makes it too easy to create an account; the exchange is likely untrustworthy.
As far as cryptocurrency exchange platforms go, the harder it is to create an account with them, the better. When there is low security with a cryptocurrency exchange, you will have problems dealing with serious issues – like assets disappearing. In this instance, you will have a much more difficult time tracking down your assets and retrieving them.
Even with highly secure cryptocurrency exchanges, we often recommend that you keep the larger portion of your digital assets offline. A cold wallet, for instance, is an offline storage service where you can store assets that aren’t required for liquidity.
4. Consider the Impact on Your Daily Investments
If you have considered the platform’s security, ensured its transparency, and done deep research on the platform, you are only halfway done. Another important matter to take care of is how the platform’s transaction fees and currency pairs will affect your daily investing. One of the differences between a “good” cryptocurrency exchange and a “great” one are the fees and currency pairs being offered.
Sometimes, crypto exchanges are dependent on your level of activity, but most will charge some type of transaction fee. Essentially, you want to consider the platform’s fees and how they will affect your particular style of investing in cryptocurrency.
For instance, you might want to consider an exchange with a low fee per transaction if you plan to transact daily. Meanwhile, if you intend to trade ether, understand that there are gas fees you must pay for different transaction types. If the transaction fee levied on your investments is too much, you may experience problems in your investment journey.
5. The Varieties of Cryptocurrency Exchanges
Last but not least, understand that there are different types of cryptocurrency exchanges before: trading platforms, brokers, and P2P exchanges. You might want to first learn what each type entails; for instance, a crypto broker operates like a forex broker. That is they set prices and provide a platform where cryptocurrency buyers can buy them.
Meanwhile, trading platforms are the most common form used by investors because buyers and sellers don’t have to interact directly. With trading platforms, sellers advertise their offers on the platform and interested buyers will place their orders and the platform charges a fee.
P2P exchanges link sellers and buyers directly, leaving them to decide between themselves how they want to transact. Their job is to create a secure system that ensures safe exchanges of digital currencies. Research each type of exchange, consider the pros and cons and choose the one that suits you best.
Choosing the best crypto wallet and exchange is important if you want to have a seamless investing or trading journey. Blockchain technology is generally secure, meaning your assets should be safe; the issue is with the exchange platform. Thus, before you even sign up with the exchange, you need to do your homework and ensure your assets will be safe. One other factor to consider apart from these is the crypto offering the exchange has; choose the one with the currency you’re interested in.