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  • Franciscoby Francisco
  • 2 years ago

Beginners Guide into Cryptocurrency Exchanges

Cryptocurrencies have gained a lot of publicity in the last couple of years and there are myriads of stories about people who have made it in this sector. Today we are here to help you learn about various exchanges out there so that you can join the wagon and get your deserved share of the market.

Understanding a Cryptocurrency Exchange

So let’s begin from the basic, what exactly entails a cryptocurrency exchange? Well, In simple terms, a cryptocurrency exchange is a platform that allows you to buy, sell or exchange different cryptocurrencies for virtual currency or the conventional currencies such as the US dollar, GB pound or the Euro. Professional exchanges will mostly likely require you to have an account and verify it using your identification details. However, there are others that will not require your verifications or an account to execute your trades.

Different Types of Exchanges

There are three different types of exchanges that you should know about. These include:

  • Trading platforms: These consist of platforms which link the buyer and the seller earning a fee in every transaction.
  • Direct trading: Entails platforms that provide direct individual to individual trading where it is possible for people in different countries to exchange cryptocurrencies. In this platform, the seller sets their own exchange rate.
  • Brokers: these consist of various platforms that allow anyone to click and purchase cryptocurrencies. However, the broker sets the price. These platforms are similar to the foreign exchange dealers.

What are the Factors to Consider Prior to Joining an Exchange?

Before you start to trade, it is imperative to conduct a little research about the exchange you choose, so that you are sure your funds are well taken care of. Remember that while cryptocurrencies are completely decentralized, most exchanges are not, meaning that they are controlled by a single entity. Caution is an important factor here.

Here are some of the aspects you should consider before embarking on your first trade on an exchange:

  • Reputation: This is all about knowing your exchange and its past dealings. All you have to do is look at the reviews from other users as well as legit websites writing about cryptocurrencies. In case of any inquiries, you can raise them on cryptocurrency forums to get more knowledge about them.
  • Fees: Majority of exchanges post fee-related info on their platforms, including their official website and social media accounts. As a beginner, you don’t want to join one that charges unrealistic or too high fees.  Before making a decision to sign up, ensure you are privy to the deposit, transactions, as well as withdrawal fees. Different exchanges come with different amount of fees, so it goes without saying that the lowest is the best!
  • Payment methods: So how do you buy your cryptocurrencies – be it bitcoin, Ethereum or Litecoin? Can you use credit or debit cards? Is PayPal or wire transfer available? The more the payment methods, the more likely the exchange is convenient for you.
  • Verification requirements: most of the exchanges will require you to provide an ID, passport or some kind of credential for verification before making withdrawals and deposits. While this may take some time, we highly advise you to go for the exchanges that need verifications. But don’t ignore the basic ones that start with just email verification altogether.
  • Geographic restrictions: There are certain exchange functions that cannot be accessed in different countries. Ensure the one you join allows you to have full access to different functions and tools in your country of residence.
  • Exchange rates: Exchanges have diverse rates. Ensure you choose an option that allows you to save on costs. It’s all about making profits, right?

What are the best cryptocurrency exchanges?

There are myriads of exchanges to choose from, but not all are ideal for beginners. Some have a more user-friendly interface, while some are developed for the experienced gurus; some have unrealistic fees, while others have subsidized fees; some require you to go through a rigorous verification, while others are functional with simple verification. With all these factors kept in mind for a beginner, here are some great exchanges to start with. Again, remember that each one of them have their own pros and cons:

  • Coinbase
  • Kraken
  • Cex.io
  • ShapeShift
  • Poloniex
  • Bitstamp
  • CoinMama
  • Bitsquare
  • LocalBitcoin
  • Gemini

Conclusion

As a beginner in the cryptocurrency space, this information about exchanges could be helpful. While we covered a certain number of cryptocurrency exchanges available, remember that this industry is still fairly new, so there are chances that more exchanges will crop up. Be sure to keep yourself updated in order to reap even more in the cryptocurrency space.