Cryptocurrency investment is trending all over the world. People are earning a lot of money through it and it has become really common in a short period of time. As this is a digital currency, the withdrawal of money earned is a little different. A cryptocurrency exchange is where you would go to exchange your digital money into dollars or any other currency.
A cryptocurrency exchange is a website whose only purpose is to provide a platform where you can buy, sell or exchange conventional and digital currencies. A professional approach towards cryptocurrency needs an account. Your ID is verified and a legit account is established on a website. However, for occasional trade, you don’t need to make an account. There are platforms that will allow you to do straightforward occasional trade without an account.
There are three main types of cryptocurrency exchanges.
- Trading platforms are the websites that act as a bridge between sellers and buyers. They deduct some percentage from successful transactions.
- Direct trading is more of a person to person approach. It allows you to connect with people from all over the world. A direct trading platform won’t set a price. Every seller has their own exchange rates.
- Brokers are websites that any individual can visit to buy digital currency at the broker’s price. A digital currency broker is similar to foreign exchange dealer.
There are several things that you need to keep in mind before joining any of the best cryptocurrency exchanges. Your research is really important. You should respect your money and time. All in all, before joining an exchange you should check its reputation. There are several ways i.e. Checking customer reviews or going to forums like Reddit or BitcoinTalk.
Fee is another important factor that will influence your decision about the currency exchange. Read the details of transactions and save them in your notepad. There are multiple charges in the form of deposit fee and withdrawal fee. Also, on every transaction you have to pay a small amount named as transaction fee. This might sound a lot but is not unfair. After all, the website is providing you a platform and they deserve to get their cut.
The payment methods are a mighty problem for some people. Sometimes the payment platform they use is not compatible with the ones provided by the website. This means you cannot use that website and that simply goes out of your list.
Difference in exchange rates makes the market competitive and hence gives the user a benefit of getting good rate. So this is another factor that falls into the personal research domain.
After considering all the above factors, you must be able to decide which cryptocurrency exchange to choose. Reviews, pricing, and exchange rate are the priority factors that influence your decision. A few of most reputed ones are:
Founded in June 2012 by Brian Armstrong and Fred Ehrsam, Coinbase is a digital currency exchange headquartered in San Francisco, California. They broker exchanges of Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Tezos, and many others, with fiat currencies in approximately 32 countries, and bitcoin transactions and storage in 190 countries worldwide.
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies. Since early 2018, Binance is considered as the biggest cryptocurrency exchange in the world in terms of trading volume.
Founded in 2011, Kraken is the largest Bitcoin exchange in euro volume and liquidity and is a partner in the first cryptocurrency bank. Kraken lets you buy and sell bitcoins and trade between bitcoins and euros, US Dollars, Canadian Dollars, British Pounds and Japanese Yen. It’s also possible to trade digital currencies other than Bitcoin like Ethereum, Monero, Ethereum Classic, Augur REP tokens, ICONOMI, Zcash, Litecoin, Dogecoin, Ripple and Stellar/Lumens. For more experienced users, Kraken offers margin trading and a host of other trading features. Kraken is a great choice for more experienced traders.
Bitstamp is a European Union based bitcoin marketplace founded in 2011. The platform is one of the first generation bitcoin exchanges that has built up a loyal customer base. Bitstamp is well known and trusted throughout the bitcoin community as a safe platform.
CoinMama is a veteran broker platform that anyone can visit to buy bitcoin or Ether using your credit card or cash via MoneyGram. CoinMama is great for those who want to make instant straightforward purchases of digital currency using their local currency. Although the CoinMama service is available worldwide, users should be aware that some countries may not be able to use all the functions of the site.
LocalBitcoin is a P2P Bitcoin exchange with buyers and sellers in thousands of cities around the world. With LocalBitcoins, you can meet up with people in your local area and buy or sell bitcoins in cash, send money through PayPal, Skrill or Dwolla or arrange to deposit cash at a bank branch. LocalBitcoins only take a commission of 1% from the sellers who set their own exchange rates.
Remember that you are not limited to using only one cryptocurrency exchange. Hopefully, the information provided will assist you in deciding which exchange platform to use.