Given the growing popularity of cryptocurrency there are an increasing number of exchanges to choose from.
You’ll find that even the most credible exchanges struggle when demand is particularly intense, so try and plan the process of choosing an exchange, rather than reacting to the next big price rise.
To make that decision easier we have summarised the key criteria and main operators, before providing a walk-through of what the first-time buying process will involve:
Security
Security should always be the uppermost consideration in choosing an exchange. A quick Google search would, for example, establish if an exchange has ever been hacked, experienced significant downtime or has been subject to any legal sanction.
Aside from the security of the platform itself, look into how seriously they treat customer security and your personal data.
Usability
If you are new to cryptocurrency choose an exchange that is focused specifically on helping you buy for the first time with ease. This means simple layouts and a great mobile experience.
Avoid exchanges targeted at experienced traders. This should be obvious from their home page, where language should be simple and understandable with a clear focus on first-time buyers.
As you’ll see in the next article, exchanges targeted at beginners will boil the buying process down to just a few clicks, just like a normal online purchase process. This removes a lot of the pain of buying crypto, but does compromise on the control you have over the exact price you buy it, and the fees you pay.
Some exchanges cater to both newbies and pros with separate products e.g Coinbase and Coinbase Pro. Make sure you are using the basic service as the Pro site will assume a significant level of understanding.
Fees
An exchange works as a go-between, matching people who want to buy with people who want to sell; they charge a fee for facilitating the exchange. The size of that fee is calculated as a % of the amount you buy or sell.
Fees should be a key consideration in your choice if you are intending on making a significant volume of purchases. If you simply want to dip a toe in the water then fees will be less significant.
Choice of cryptocurrencies
If you are buying cryptocurrency for the first time, the likelihood is you are buying bitcoin or ethereum.
Should you, however, have a specific alt coin (alternative coin) in mind, or think it likely you’ll want to diversify, make sure to choose an exchange with a broad enough range of cryptocurrencies. The are literally thousands.
The process exchanges use in adding differing cryptocurrencies varies greatly, so you’ll find a big difference in the availability. If you want to trade a niche crypto, check its availability in advance.
Localisation
One of the biggest factors in your choice should be based on how much the exchange is tailored to your local needs. Is the site translated? Does it provide relevant local payment options? Are there country restrictions specific to where you live?
Trust
Buying cryptocurrency is exciting and empowering, but isn’t without risk. Make sure to use an exchange that is trustworthy. Referrals from friends are a good practice, as is researching on Google, App Stores Social Media and Reddit. Avoid promoted reviews and try to find genuine opinions.
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