In order to buy or sell cryptocurrencies, you need to join a cryptocurrency exchange which trades the ones that you need. Furthermore, in addition to offering the trade you want to execute, the exchange should be safe and reliable.
Are these the only factors that affect the popularity of exchanges?
To answer this question, we must first look at what the crypto exchanges really are.
What Exactly is a Cryptocurrency Exchange?
As you probably already know, the primary purpose of these types of exchanges is to purchase, sell, or trade cryptocurrencies (or “Cryptos”, as they are more commonly known). Some exchanges allow you to echange your fiat currency, such as Euro or Dollar, for cryptos such as Bitcoin or Ethereum.
Other exchanges only allow trading one crypto for another. One thing is fo sure; the popularity of cryptocurrency exchanges is growing as the crypto market is going up.
There are platforms for complete beginners where you can make simple trades with just a couple of cryptos. Then there are exchanges targeted at professionals who know various trading methods and trade significant sums. The former is usually more straightforward and has fewer options, while the latter includes a wide variety of tools that help with complex trading strategies.
Exchange platforms have their sub-categories. The primary division is to trading platforms, platforms for peer-to-peer deals, and broker platforms. Trading platforms usually act as a medium, peer-to-peer trading is done from one person to another, and brokers are the ones who set the price; just like ordinary exchanges.
What to Look for When Selecting a Cryptocurrency Exchange?
The number of options an exchange has is definitely not one of the factors that would affect its popularity. Let’s see what impacts the exchange platforms and makes people opt for some exchanges over others.
Reputation
Some websites are more reputable than others. Many factors influence this, and the main one is security. If the exchange was a subject to an attack and money was stolen, it is only natural that the reputation will go down. Some companies even shut down because of this.
The best way to check the reputation of the platform you are interested in trading on is to search no a social media website such as Reddit or the crypto-oriented forum BitcoinTalk.
Fees
Fees are usually taken when you trade cryptocurrencies or when you seek to deposit and withdraw the currencies to your personal wallet. Some exchanges have higher fees than others. Please bear in mind that higher fees do not guarantee better service.
Do you your research before you register on an exchange to avoid signing up for a platform that is slow, unsecure, or costly.
Requirements for Verification
One of the necessary processes that you must go through on an cryptocurrency exchange is called account verification, and it has several steps.
To be able to trade on these platforms, you need to give some personal information; which is something that many people do not really enjoy when it comes to registering on a new website.
You can usually register with just basic information about yourself, but if you are withdrawing a lot of cryptocurrency you may have to go through the exchanges KYC policy. KYC stands for “Know Your Customer” and it normally involves verifying your identity and address with legal documents.
Payment Options
There are dozens of payment methods available nowadays, including credit and debit cards, bank transfers, e-wallets, etc. Check whether the exchange of your choice supports the methods of payment you want for deposits and withdrawels.
Geo-Restrictions
Restrictions may not allow residents from some countries to register on the website. These exist because the exchanges may not have appropriate licenses for operating in some countries.
Which exchanges should you choose?
When taken all into account, we can narrow down our choice to three exchanges which excel at most of the items listed above.
CEX.IO
CEX.IO is a great platform if you are completely new to cryptocurrency. They provide the best software for complete beginners, but the professionals will appreciate it too. It is especially useful for fiat-to-crypto trading.
The security levels are excellent and the choice of the available cryptos is also great.
Please note, however, that there are clones of this exchange aiming to mislead would be cryptocurrency traders. The official website of CEX.IO is https://cex.io/. So be sure you use enter the correct address.
Coinbase
Coinbase is one of the leading cryptocurrency exchanges online.
The platform is easy to use and is secure too. Furthermore, you can download an app for your Android or iPhone and enjoy it on the go.
Kraken
When it comes to Euro trading volume, Kraken is the industry leader. They allow buying and selling Bitcoins for euros, dollars (both CAD and USD), pounds, and yens. There are also altcoins available, such as Ethereum, Zcash, Litecoin, and others.
SafeTrade
Developed by the SafeCoin team, SafeTrade is a cryptocurrency exchange that was launched in 2018.
Based in Canada, the exchange offers trading in SafeCoin, Bitcoin, Horizen, and over a dozen more.
Conclusion
As you can see, choosing the right platform is not an easy task. There are many factors that you should take into account before registering on any cryptocurrency exchange platform.
Apart from ecurity and reputation, you should always pay attention to fees, exchange rates, geo-restrictions, payment options, and verification requirements. These are the basic things that make exchanges such as Coinbase, Kraken, SafeTrade, and CEX.IO, popular.