How to pick the best cryptocurrency exchange differs. It involves what you need and choosing the best exchange for those needs; requiring a process such as consideration and evaluation of several factors. The factors and issues to be considered includes security, liquidity, user experience and fees. The moment you discover an exchange that meets with your basic needs such as support for the currencies, trade partners and additional enhanced features, you also consider those factors:
The insecurity of an exchange could lead to stolen funds, prying into one’s transactional privacy, and exposure of other advantages of the exchange to devaluation. In respect to this, other aspects are considered such as:
– The web address should begin with a more secured web i.e https, not http.
– It should have a two-factor confirmation (username and password), with another piece of private information unknown to any other source.
– Monitoring and auditing of exchange transactions should be round the clock and the use of alerts (SMS and email) gives the exchange customer more guarantee of safety.
– Deposits made by customers should be kept offline in cold storage.
2) Legal aspects:
It is advisable to use an exchange that is based in your country or the country you reside in; it makes it easier to understand and follow the changes in regulations. However, it is not impossible to use another country’s exchange, but some exchanges are only for a limited number of countries.
- Is the exchange open and discloses the owners and members of its group?
- Exchanges that are transparent also do a publication of their cold storage address to customers.
As the case may be, always remember not to keep too much funds on one exchange, do not keep more than is required for your trading on an exchange. Keep your remaining Bitcoin in other secure wallets that you can also control.
Other factors to consider when choosing an exchange are:
The higher the trading volume of an exchange, the more liquid it is, increasing its chances of completing transactions faster, easier and not having to face too many major changes in price. You also consider if the exchange proffers “locked in” pricing, which gives you a standard price at the time of purchase. Note that liquidity differs among the different trading pairs; it can be high for some exchanges and low for the other.
– If privacy is highly considered in choosing an exchange, you would not want to choose an exchange that requires disclosing much about yourself.
– Know the report of other users about the drawbacks of a particular exchange, notice if there are also any advantages that comes with it.
The charges in each exchange should be compared to the other. Usually, they are less than 1% in each transaction and is likely to decrease if the volume of your purchase gets bigger.
Note that Bitcoin is a developing system with a lot of structural works that needs to be done and put into place. Therefore, any changes might be rapid and prompt. There might be improvement in regulations, with new ones that can be introduced at any time. Improvements in technology is always aimed for in order to cater for any technological developments over time. This also applies to new problems as they can surface spontaneously, and require immediate attention which leads to changes in some structures. Furthermore, to get answers to questions, follow up on our news and updates. Choosing a cryptocurrency or asking for the most suitable Bitcoin is not a question that can be answered in a day. Follow up with us for more information and engage in personal research for more answers. Enjoy!