A Cryptocurrency Exchange is a digital marketplace — a place to buy and sell cryptocurrency. Before choosing the place to do the ‘digital-marketplace rhumba’, there are a number of factors to consider…
Any trade-wins are pointless if you can’t keep them safe.Is your exchange safe?
Basic security protocols
Regulatory Compliance and Connection to Industry
With the state of the industry right now there are less and less excuses for being open to malicious hacking Mt Gox type events.
Fees eat margins. It’s a painful reality. The best way to hedge against this is a ‘start-to-finish’ type approach. Ask the questions —
Can also be a challenging aspect on some exchanges. A limit to what you can trade and when you can trade outside of regulatory limits can be stifling and in some cases might mean you miss out on maximising returns. The freedom to trade in the volumes you want, when you want is an important factor.
Try to avoid limits — such as minimum deposits and withdrawals — if you can, if you can’t, be very aware of them.
Is your exchange user friendly? The transition from fiat currency to cryptocurrency should be;
From beginner to top-dog trader the exchange, interface should accommodate everyone. User interface can be the make or break factor in selecting an exchange. Educational tools or guides are also becoming a welcome extra, as well as detailed summaries of the coins you are investing in.
Look out for;
User education is starting to become the major point of difference between the quality of exchanges at point of writing.
A good exchange is built on these principles.
Is the ability to handle volumes large and small — quickly and on demand — is essential in the world of trading. Be sure to pick an exchange that will be there for you to when mainstream markets come into play.
Works hand in hand with ‘scalability’ but means the ability to buy and/or sell assets without affecting the price of the coin, token or fiat all that much.
Beyond the big ten, there are more than 1600 cryptocurrencies — a huge possible pool of what can be listed. Some Exchanges will only have Bitcoin, Most will have a small variety (10 or so), some will have a gigantic variety of altcoin. The most important thing here is the exchange has what you want. **A solid exchange will have;**
It’s all about choice — what does your exchange have on offer? Does the exchange have the coin you want to trade at the price (including fees) you want to trade at?
Of course there is a lot to look at when deciding which cryptocurrency exchange(s) to choose. We are currently on the cusp of a renaissance in exchange trading and as the market expands and cryptocurrency becomes mainstream, there will be loads more features, improvements and must haves. For now let these five basics point you in the right direction.
Trade with Confidence.
