Since its launch in 2009, the cryptocurrency technology has been making waves in the market. And as that happens, more and more people are seeking ways to turn their cryptocurrencies into profits and cash. To do that, these people need to find a cryptocurrency exchange.
Now that we see cryptocurrencies growing at incredible speeds, owners – perhaps even you – are trying to find a way or a platform to use these tokens. Finding a platform – an exchange – isn’t easy. You got to consider many things.
We’re here to help you choose by giving you the things you should consider when looking for a cryptocurrency exchange.
Security
Wherever youare pouring your money on, it’s imperative to conduct some research. You need to have solid evidence that you’re not investing your money in something unpleasant, that is, fraudulent. Keep in mind that the biggest issues bugging the cryptocurrency industry at present are the pump-and-dump schemes. Exchanges are the ones responsible for the prevention of this kind of fraud.
Methods of Buying
The way you buy cryptocurrencies, or the methods of purchase, varies from platform to platform. Some exchanges require deposits via bank transfers, others use PayPal, others accept credit and debit cards, and others just use cryptocurrency for purchases.
If you’re among those who do not have any cryptocurrency before joining an exchange, it is very important that you choose a platform that can accept fiat currencies. Because, obviously, if the platform does not accept fiat currencies, you may not enter the exchange.
You should also take note of the speed at which long purchases are completed. Some platforms have the capability to process transactions nearly instantaneously, though other platforms can take days or even weeks.
The Tokens the Exchange Supports
A huge slice of all the exchanges support Bitcoin and/or Ethereum. However, investors in cryptocurrency know that that is just the tip of the iceberg, not yet scratching the surface. There’s a sizeable variation among the supported digital currencies across exchanges.
Some exchanges have a long list of altcoins which they trade, while others serve only a number of the major digital currencies. This is why it’s important to conduct research on the exchanges that you want to trade cryptocurrencies with.
Overall, you need to choose an exchange that supports all the cryptocurrencies that you want to have. Metrics like the 24-hour volume and market cap can influence these exchange rates, and you should definitely monitor them.
Fee Structure
Transaction fees and fee structures come in different amounts and values from one exchange to another. This is very critical when you’re choosing cryptocurrency exchange. Some exchanges provide discounts on the fees. This kind of offer usually takes place when the exchange’s token is used to complete transactions.
Trading Platform, Peer to Peer, Broker
In this industry, there are three main types of cryptocurrency exchanges. That means you need to know what they are before you can wisely choose a cryptocurrency exchange.
Trading platforms are the most common ones, serving as marketplaces where you can buy or sell orders for cryptocurrencies. You will only interact with the platform, paying fees for every transaction.
P2P exchanges, meanwhile, connect buyers and sellers to interact with each other directly while relying on both parties to agree to any given transaction. P2P exchanges are quite helpful in minimizing network congestion and maintaining secure trustless system for the exchange of digital currencies.
Lastly, cryptocurrency brokers are those that facilitate trades similar to forex brokers. The brokers set prices as buyers have the ability to buy the digital token through the platform.
