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Choosing the Best Crypto-exchange
- the first steps
At times it may seem all crypto exchanges offers similar service which is buying and selling cryptocurrencies, but it’s only a part of the story. As the market emerge, there are plenty of new crypto exchanges being founded each month. Not all of them will be there to stay, a few might offer a great service, support, and low fees, but the others won’t. Some of them may get hacked, go bankrupt or even steal the digital assets. This is why anyone shall pay special attention while choosing the right exchange. We put some light on the topic of selecting the right cryptocurrency exchange for you. Stay with us and continue reading below the disclaimer.
Calm Down, Rush is Not a Good Advisor
Everyday you spot the news of the new and exiting ATH (All Time High) of the Bitcoin and alt-coins, and you don’t want to miss the bulls ride, do you? So you become excited, sometimes nervous. This exact moment you’re most prone to errors. Most of us know it already, for those who don’t know we have written the big disclaimer above – that cryptocurrencies are highly speculative and volatile. Buying crypto might be breathtaking roller-coaster by it’s own nature, but who would think that choosing a wrong broker or exchange platform might deliver similar emotions?
Don’t you think that your money and digital assets should be secure and accessible anytime, anywhere? We do think so too. We are more than happy that you invest your time to research this topic a bit by reading this short article before you jump-start to trading or investing into cryptocurrencies.
It’s one of the easiest indicators for anyone to look for. Services like CoinGecko or CoinMarketCap provides this data at real time. You can check and verify what’s the trading volume on platform you are researching. High volume usually means high liquidity, which leads to more stable prices and smoother transactions.
As mentioned above, trading volume might be a helpful indicator, but, as all the measures and indicators that we cover, there’s no single one that should be considered as the ideal one.
We highly encourage you to take into consideration at least the ones we describe. The list might not be complete, feel free to incorporate much more indicators for your own research. We focus on the ones that play the biggest role in our opinion.
It’s good to spend some time on the exchange website, verify their contact numbers, support channels, and even the physical address. A good exchange won’t hide the relevant information from its users. The information you may be looking for might be – establishment date, founder, CEO, licences they acquired etc. Some of the information may be found on “About Us” subpage, some you will need to google.
A top-notch exchanges usually advertise their efforts in security measures. We suggest to verify at minimum the following core aspects:
It’s considered a good practice for exchanges to divide the assets they take care of into two parts – online, with assets available for immediate trade, and offline, with assets being stored for customers by the exchange. By doing so, an exchange is able to distribute the risk by insuring the online funds and securely storing offline ones in a cold storage, with no access to the internet.
The most basic test that anyone can do is to verify the SSL Labs score – a score of A and higher can be considered good from the end-to-end connection standpoint. It means that no-one can eavesdrop on information exchange between you and the exchange servers.
You can also look for other security measures the company takes – WAF & DDoS protection or a BUG Bounty program is a great plus.
Verify if two-factor authentication (2FA) is available – it helps prevent an account takeover.
Look carefully at the fee structure of the particular exchange. Verify which actions lead to the fee, some exchanges let you pay-in for free, buy the digital assets with low fee, but than charge you on a pay-out. Choose the fee structure that suits your very own needs.
Find out what are the pay-in and pay-out options, and what are the transaction times. It’s good to see the transferred money quickly available for trade on your account. That limits the stress factor while doing your first trades. One of the fastest methods are: PayPal and credit/debit cards – but keep in mind those method’s might be eligible for an additional fee.
Some platforms allows exchange of only digital assets, so you won’t be able to use them at the beginning – assuming you have dollars in your pocket, not a cryptocurrency.
In the age of internet it may sound silly, but consider this factor as well. For numerous reasons it may be a good idea to consider an exchange located in your country. It may be handy if the exchange follows your country specific law and tax regulations. Usually it will be also easier for you to verify the authenticity of the exchange itself. Last but not least, bank transfers in the same country and currency are usually faster and less expensive.
Now you should have a better idea on how to choose the right broker for you.
- Take it easy – allow yourself for some time for the proper research.
- Always verify transparency & security measures.
- Use strong password & two-factor authentication (2FA).
- Store your digital assets in your private wallet – if that’s not possible, verify the security measures incorporated by the exchange to secure your assets, like cold storage and insurance.