A cryptocurrency exchange serves as the gateway for most people to get started with cryptocurrencies: be it trading or investing. Picking the right exchange can be a big challenge especially because new exchanges are launched on a regular basis to serve the ever-increasing number of crypto users across the world.
It’s worth, remembering that there is no such thing as best exchange all-round because individual preferences are never the same. That said, how do you determine if an exchange will be the best for you?
1. Your location
Some exchanges provide their services to the world at large (no geographic restriction) while other exchanges give access only to people from a particular location. So start by finding out if there is any reputable exchange in your country. If there’s one, fine, if not, there’re many international exchanges out there for you to choose from. In case you don’t know where to start, go to this site and select your country to view a list of exchanges that support your location.
Take note that the list of exchanges on the above site is not exhaustive. You may need to search further online to find more exchanges in your locality.
2. Payment options.
Each exchange has its own method of purchasing cryptocurrencies. For example, an exchange may only accept payments via cryptocurrencies ( bitcoin and ether in most cases) while others allow you to buy with both fiat and crypto.
For those exchanges that allow you to buy cryptocurrencies with local currencies (fiat), they further differ in terms of payment options. Some will allow you to buy crypto through bank wire, PayPal or credit card while others provide only one or two of these payment options. So it’s important to find out all payment methods that the exchange provides to ensure they meet your needs.
3. Types of cryptocurrencies you want to trade.
Each exchange has its preference with regards to which cryptocurrency it allows on its platform. Most exchanges usually start by listing the most popular cryptocurrencies on their platforms like bitcoin, ethereum etc. Thereafter, it may be a matter of the type of cryptocurrency – like whether it’s a security or utility token – and whether the said token has met all regulatory requirements.
4. Decentralized or centralized.
Centralized exchanges were the premier platforms for buying and selling cryptocurrencies but that is quickly changing thanks to the increasing number of Decentralized exchanges entering the market. The key difference between a centralized and decentralized exchange is that the former uses a third party to store its cryptocurrencies while the later keeps everything on its own platform.
If you’re completely new to cryptocurrencies and less techy, you will definitely want to start off with centralized exchanges because most of them are more beginner friendly compared to their decentralized counterparts.
5. Customer support.
In business and generally any financial venture, time is money. Having to spend a whole day waiting for customer support is certainly not worth it because that’s money you’re loosing. It pays to review the quality of assistance that the support team of any exchange provides to its customers before signing up.
6. Reputation and security.
Reputable exchanges always take security very seriously because it gives them a sound sleep. Make sure the exchange you’re considering uses a secure protocol. This is usually manifested by the HTTPS label alongside the site’s domain name. Also, find out if two-factor authentication is enabled because this serves as a basic security measure for every crypto-exchange.
7. Regulatory Actions.
All centralized cryptocurrency exchanges are subject to legislation ( regionally or internationally). It is your responsibility to find out if the exchange you’re interested in has fulfilled all regulatory requirements.
There’s this popular saying: “don’t put all your eggs in one basket”. This holds true for cryptocurrencies. The best thing you’ll want to do is not pour all your finances into a single exchange. Instead, select a few reputable exchanges to trade on. Whenever trading is over ( or you want to take a break), consider transferring your crypto from the exchanges to a more secure wallet – like cold or paper wallet.