Cryptocurrency exchanges are essential if you want to buy, sell, and trade your currency or coin of choice. But as the popularity of cryptocurrencies grows, exchanges are popping up seemingly overnight. This makes it hard to know which ones to use.
Some of the newer exchanges have genuine intentions of success, but for a multitude of reasons, many go bust soon after they open. There are also some that are fronts for pump-and-dump scams or just there for the exchange creators to overcharge you and/or steal your money.
There are a lot of factors that go into choosing the exchange best suited for your needs, but for those who would prefer to cut out the time and risk of their search for a great exchange, we have compiled a list of what we consider to be the best cryptocurrency exchanges.
Our recommended exchange sites were chosen based primarily on what we consider our staple criteria. We look at a range of different factors when assessing cryptocurrency exchanges, but the following are easily the most important.
Let’s take a look at each of these factors and see why they matter so much.
Cryptocurrency exchanges are not infallible, and some have had major issues with hacks, crashes, and other security breaches in the past. These issues often end up directly costing the exchange users money.
We choose our sites based on how sound their security seems to be, meaning that we look at their history to see if they have been the victim of hacks or breaches. If they have, how many have they suffered? How did they deal with the situation? Have they taken steps to avoid such problems in the future?
Weaker security systems mean more frequent hacks and breaches, which is a huge red flag for any potential user.
Any new exchange you use, regardless of your familiarity with exchange sites in general, will have a learning curve because setups and layouts change from site to site. However, exchanges should make this learning curve as easy as possible to get through.
It’s essential for a site to be usable by everyone from absolute beginners to seasoned pros while still maintaining a clean and streamlined layout.
One of the most significant concerns about the cryptocurrency world, in general, is that exchange sites (and often the coins themselves) won’t be able to withstand the test of time.
The exchanges we have chosen have proved themselves to be strong, capable of handling an influx of users, and have a transaction history that goes back far enough to satisfy us.
Another big concern for cryptocurrency exchange users, in general, is the possibility that an exchange is basically a scam.
Some unscrupulous operators set up exchanges solely with the intention of ripping off any customers they manage to snare. Others launch exchanges as part of a pump-and-dump scam, where they attempt to artificially increase the price of a new cryptocurrency before selling their own holdings and seeing the value crash.
The exchanges we have chosen have proven themselves to be trustworthy with genuine intentions.
Cryptocurrencies are built with the user in mind, meaning that even the most beginner users should be able to pick up the interface and controls relatively quickly.
But it never hurts to get yourself acquainted with some basic information before you sign on for anything. Remember that cryptocurrency is different from traditional currency, so you need to learn some things before you start investing your money.
There are a few steps you should take before you even begin your search for a cryptocurrency exchange. Remember, you are going to be choosing a site that you will eventually trust with your money and information, so a little bit of preparation doesn’t hurt.
Here a couple of questions you should certainly be thinking about.
Before you decide which platform to use, you first need to ask yourself which cryptocurrency you want to begin buying. For absolute beginners, look into starting with more popular and established coins.
Choosing something that is well-known and used by many will make your exchange search a lot simpler, as you probably won’t have to scour the internet to find one that is compatible with your coin of choice. It also will mean that, even in the volatile world of cryptocurrency, your coin is relatively stable as compared to the newer and lesser-known coins.
Check out the following page to learn more about the individual coins you can choose from.
The second step is deciding how you’d like to finance your first coin purchase. Typically, your choices are bank transfers, paying via credit card, or purchasing new coins with coins you already have in your wallet.
If you are a beginner, you are typically limited to the first two options, but after you decide which exchange you’d like to use, you may find that they support other methods of payment.
But you should determine your ideal payment method (bank transfer versus credit) and keep it in mind when trying to find your crypto exchange. Even if you don’t use it as a vital factor in your search, it’s a good thing to keep in mind.
After you have chosen the exchange that you’d like to use, you’ll then purchase your first batch of cryptocurrency using the credit or bank account that you have chosen to fund the transaction.
Cryptocurrency wallets are an equally important part of cryptocurrency buying, selling, and trading. Some exchanges will provide users with a wallet that is directly connected to the exchange. And in some cases, signing up for the exchange requires the creation of a wallet.
But there are a few different wallet types to choose from, and your choice of wallet will depend on what your priorities are and how often you use your cryptocurrency. Here are a few different types of wallets that you can choose from.
To learn more about each type and see our recommendations for specific wallets, take a look at the following page.
As with most everything else in the crypto world, you have to choose your exchange not only based on its reputability, trustworthiness, and usability, but you also have to decide what your priorities are and make your decisions with them in mind.
These are all important questions to ask yourself before choosing a cryptocurrency exchange because your answers will affect which exchange is ideal for your personal use.
Most exchanges will charge transaction fees, but there are different types of fees that they might implement, which may end up being your deciding factor. It’s an important thing to know for those who only want to buy because the fees (excluding a spread fee setup) are going to be there no matter what. But for those looking to sell and trade, the fee setup is a much more significant factor.
One of the first things you should make sure of is that the exchange site supports and is compatible with the cryptocurrencies that you currently use or would like to start buying.
You should also ensure that your country’s legal tender is supported for payments.
After you have narrowed your search down to a few different contenders, do a quick internet search of their name and look for sites that allow past and present users to discuss their experiences. You can get to know an exchange’s practices before you even sign up for the site, and it can be a great indicator based on your personal needs and priorities.
Get a feel for the overall tone of the reviews and look for anything you might deem a red flag. If the red flag or flags pop up in a lot of users’ experiences, you should consider crossing it off of your list.
For most beginner users, exchanges will be the best way to go. But once you begin to acclimate yourself to the cryptocurrency community, you may want to try peer-to-peer direct transactions with people you know to be trustworthy.
If you decide this is a route that may be better suited for you, it’s important that you understand the main pros and cons of using exchanges versus peer-to-peer transactions.
The biggest pro is that there are no fees with peer-to-peer transactions. Depending on how many transactions you are making, this could be a HUGE pro.
You are essentially cutting out the middleman, which can be great for some people but can also be extremely risky. In this case, you would have information like wallet account number, IP address, and username to make transactions.
Bitcoin was created as a means for direct peer-to-peer transactions, so it isn’t unheard of to buy, sell, and trade this way. It is, however, risky due to the popularity boom of cryptocurrency in the past few years. With more users now involved, there is a better chance that you will run into a scammer.
Most peer-to-peer transactions are made after two or more users meet online in a forum or on a dedicated website. But cryptocurrency is much more anonymous than traditional currency, which makes it ideal for those who would like to use it for nefarious or fraudulent purposes.
Though cryptocurrency exchanges are not perfect, they do provide an added level of security and a record through the blockchain of the transaction, although even if the transaction was found to be invalid or fraudulent, it is impossible to reverse.
If you decide to opt for peer-to-peer transactions, there are some precautionary steps you can take to lower your overall risk, but please note that they will not protect you completely.
Do your best to create a minimum time bracket for peer-to-peer transactions, meaning that you don’t allow yourself to enter into that situation unless you have been in back-and-forth conversation with that person for a set amount of time.
Most scammers won’t play the long game. If they want to lure you into a peer-to-peer transaction, they won’t keep the charade up for a long period; they will simply move on to their next target.
Many cryptocurrency users value the relatively anonymous nature, so they won’t necessarily want to divulge personal details that can make it easier for you to validate their trustworthiness. Additionally, the other user will probably be equally as wary if they have legitimate intentions, so keeping up a small, light conversation over a span of a few weeks shouldn’t be ruled out.
Trust your gut!
If you are going to make peer-to-peer transactions a regular part of your experience, you may want to consider having a backup wallet to store the majority of your coins in, while keeping a smaller amount in a more accessible wallet. Even if you are not thinking of going the peer-to-peer route, this is a good practice.
It enables you to have some coins that are easily accessible and liquid while keeping the rest on a hardware or paper wallet for safe keeping. This way, if the transaction goes wrong and the other user attempts to break into your online wallet, they won’t make off with your entire stash of cryptocurrency.
This should be clear by now. You are putting your hard-earned money and private information into this site with the expectation that they will not take advantage of that fact.
Cryptocurrency, although not tangible, is still a representation of money that you have earned and have chosen to invest in the growing market.
Although the use of currency exchanges is commonplace, there are platforms that do not exist in favor of the user because they are used for scams.
It might seem like a chore or an unnecessary step, but ensuring that the currency exchange is relatively highly rated by past users and has a transaction history of at least a few months can save you from falling victim to one of these scams.
Remember that your name and wallet information is tied to all of your transactions via the blockchain, so using a wallet that is as removed from the exchange as possible is only going to be to your benefit.
Whenever possible, you should be choosing safety over convenience. Using a wallet that isn’t connected to the exchange directly is a great first step and can save you from having your entire lot stolen or compromised by any potential hacks or security breaches.
Owning, buying, and selling cryptocurrency is becoming increasingly popular, and there are many good reasons for getting involved. There are many things to think about before you do, though, and choosing the right exchange for your trades is one of them.
In fact, it’s arguably one of the most important. Doing research beforehand and putting in that extra time to ensure that you are doing all you can to protect yourself and your money can save you a headache and loss in the long run.
So, don’t be afraid to take all the time you need to carefully select the exchange that not only meets your personal needs but also is as secure as any exchange could be. You can certainly go ahead and trust any of our recommendations, but there’s no harm in doing some additional research if that makes you more comfortable.