The Ultimate Guide to Choosing a Bitcoin Exchange Platform

If we know about the stock exchange then it is easier to understand Bitcoin trading. Unlike the stock market where we open accounts with a brokerage, BTC requires us to have an account with digital currency exchange or DCE. Once we buy our BTC, we can use the deposited funds in the exchanges.

 

What Should We Consider?

Crypto exchanges are not created the same. Again, every BTC user has unique goals when they buy digital coins. Choosing a cryptocurrency exchange in 2021 can be daunting now that the market is growing at an alarming rate. Before settling for one, we must consider:

 

  • Countries supported
  • Privacy policy
  • Security
  • Payment methods
  • Customer support
  • Past issues/reputation
  • Fees
  • Limits
  • Speed of delivering the coins
  • Liquidity

Countries Supported

Most of the reputable exchanges are limited to certain geographical regions. We can only legally trade in an exchange platform that is accessible in our country of residence. This is something to check before signing up or downloading any application. However, some countries have managed to crack down the accessibility of some restricted exchanges. The availability of a platform in any country depends on licensing, certification, and the local laws and regulations regarding crypto and blockchain. Some exchanges like Binance are open to any country except North Korea, Iran, Syria, and others on trade sanctions. We hope that different countries will create more crypto-friendly laws.

 

Past Issues and Reputation

The exchange’s history tells a lot about its credibility. Some sites have been hacked before and users suffered a great loss. We have heard cases of money being stolen from exchanges. For instance, a cybercrime case in 2018 resulted in the loss of <a href=”https://www.cnbc.com/2018/06/07/1-point-1b-in-cryptocurrency-was-stolen-this-year-and-it-was-easy-to-do.html”>over 1 Billion USD</a>, causing a drop in the value of BTC that year. Even though cybersecurity has improved immensely over the past few years, we cannot ignore the risks involved in exchanges. We must, therefore, factor in this point when choosing where to buy or trade crypto online. Like any form of shopping, we should be keen on online reviews and what the community says about the exchange. What tokens do they support? Platforms that disable withdrawals for extended periods are not worth using. Any site where people have complained about financial breaches is not worth signing up for.

 

Liquidity and Speed of Delivery

The exchange’s liquidity depends on the volume of trading. All we want to know is whether they are in a position to fulfill our orders at any given time. It doesn’t matter how small or big our transactions are, liquidity is extremely important in purchasing and selling crypto. If we intend to trade BTC in conjunction with other cryptos like Ethereum, a major centralized platform is ideal. A centralized exchange is highly liquid and fast. We can fulfill orders in seconds. But if we must trade lesser-known tokens, a smaller exchange or decentralized platform would serve us better. Not all the time can we afford to pay exorbitant charges for listings at centralized exchanges. So we can use smaller sites when need be.

 

Privacy Policy and Data Security

Security of our finances is at the top of our minds when selecting BTC exchanges. A centralized platform supports a large community, making it a potential target by hackers. Should hackers access our digital coins, they stand to gain a lot. That is why we must emphasize the privacy of our personal information so we can stay anonymous while trading. We don’t have to reveal our real identity when signing up and we need a private recovery seed. On the other hand, decentralized crypto exchanges eliminate the need for an intermediary. Rather, they connect us directly so we can place and fill orders directly.

When trading cryptocurrencies, we highly recommend taking extra precautions. A hardware wallet is a great way to store and safeguard BTC among other digital currencies. Once we accumulate significant funds, let us normalize moving our digital assets to hardware wallets and cold storage. Phishing scams, data breaches, and hacks are real. If you just got started in the world of blockchain, we recommend you use credit and debit cards to buy the first BTC using fiat on respected pioneer sites like Coinbase.com. Cryptocurrency exchanges are strictly for buying and trading. Do not store your BTC there.

News Reporter

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