5 Things to look for in a Cryptocurrency Exchange
While the digital currency market was born in 2009, people are now flocking to the market and are investing at staggering rates. Because of the rise in popularity, it is now more important than ever before to choose the Best Cryptocurrency Exchanges to invest in.
The reason for this is that many exchange platforms have been hacked recently which is quite concerning. To help you avoid financial losses and having your personal information stolen, we will identify some of the most important things to look for in a cryptocurrency exchange platform.
Things to look for in a Cryptocurrency Exchange Platform
If you look in the news, one of the headlines is bound to be about cryptocurrency and the hacking of various platforms. To avoid experiencing the loss of your investments due to a security breach, it is important to conduct some research before committing to a platform. Security is important and one of the easiest ways to identify if a site is secure or not is by looking at the beginning of its web address.
If the web address begins with HTTPS, you are going to be conducting business on a secure site. If the address begins with HTTP, you are not using a secure site. This means that any information that you enter on the website can then be stolen or seen by hackers. It is in your best interest to look for a platform that not only uses the HTTPS address but also requires two-factor authentication.
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2. Where is the exchange platform located
It is important to consider where the exchange platform is located. The reason that this is important because you may find yourself trading at a great rate but in a different currency than your home country. While this may not seem like a big deal, you may find yourself being stuck paying extra fees due to the conversion rates on foreign currency. In addition, different countries have varying laws and policies relating to investments and exchanging currency online.
3. Exchange fees
Finding a great exchange platform can take some time but will ultimately save you money but it may mean that you have to pay a higher exchange fee upfront. Be sure to inquire about fees before you commit to trading on a platform. Some platforms charge additional fees over and beyond the typical exchange rate. It is also important to find out if the exchange rate varies or if it is the rate at the time of the transaction.
4. Transaction time
This can vary based on the platform you choose to use, but it is necessary to inquire about how much time you can expect to transpire before your cryptocurrency is showing up in your virtual wallet. Some transactions happen within seconds, while others can take several days. Knowing how long you will need to wait before you will have access to your investments is important as it can give you peace of mind while you wait for the transaction to clear.
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5. Volume requirements
A good exchange will likely publish their book order so that you can see it as a potential investor. This is a great sign that the exchange platform is credible. In addition to looking at the book order, inquire about the volume requirements. This is helpful as you would not want to begin to invest in a platform that requires an order volume larger than what you can feasibly afford.
After the Covid-19 pandemic, the global market is at the tip point investors all around the globe are looking for various options and waiting to invest in safe assets such as Bitcoin.
A special note for beginners, it can be a very tough and daunting task to purchase and hold bitcoin and knowing which exchanges are safe and legit. So, we have compiled a shortlist of 5 factors that should be kept in mind when choosing the cryptocurrency exchange. If you want more information regarding cryptocurrency, check out our other articles on this blog.
It’s also worth looking into the differences between centralised and decentralised exchanges.
0x and Airswap are building protocols to build decentralised exchanges.