The most ‘serious’ investors in cryptocurrency can also get hacked. An estimated 1.3 million Bitcoins (6% of the world’s supply) were lost forever when the Mt. Gox Bitcoin exchange was hacked back in February 2014. Currently, there is ~1 billion USD worth of crypto coins stolen from cryptocurrency exchanges worldwide. It is still unknown how much more might be taken, and this is just a beginning.
Losing all your crypto to a scam exchange can be painful. Rising fees and missing features, as well as inexperienced support and security, are just some of the factors that can weigh heavily when choosing where to trade your digital assets.
But, before you move any further, it’s highly recommended to learn more about cryptocurrency exchange threats in this comprehensive guide here. And if you are already aware of it, keep reading to discover some useful features which define the best cryptocurrency exchanges.
What Is A Cryptocurrency Exchange?
A cryptocurrency exchange allows you to buy and sell digital assets—usually referred to as cryptocurrencies—based on the value of those assets. These exchanges act as middlemen between the buyers and sellers who set their prices, meaning all of the money circulates amongst a large crowd without being controlled by any one party.
The benefit of using an online exchange is that you can buy and sell directly from your wallet instead of trusting another third party with your funds.
Ease of Use
Creating an account, signing up, verifying statements, depositing, trading, and withdrawing; it’s many procedures that aren’t easy or fun. A cryptocurrency exchange should offer ease of use and let you manage your entire life on the blockchain with comfort. It should allow you to track your funds from one location, lock them in time deposits if you wish, and trade from a centralized location with your wallet.
You should be able to manage all of this from ANY device – desktop/laptop/tablet/mobile phone – no matter where you.
Speed and Liquidity
Several cryptocurrency exchanges promise a quick exchange, but that’s all they do. The speed of their exchange is not backed up with enough liquidity. Lack of liquidity in the cryptocurrency market requires you to use a large amount of money to enter or exit the market, which is not always possible if you are a small player.
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Security is an important concern and has become one of the major factors for consumers to consider when they decide to engage in cryptocurrency trades. In particular, hackers and scammers are finding new ways to take over cryptocurrencies and thus seek ways to steal data and undermine the trustworthiness of the exchange network themselves. You must know about these security features to maintain your cryptocurrency safely.
Fees of cryptocurrency exchange vary from one exchange to another. They are based on the number of coins traded, number of currency pairs, currency conversion rate, trading fee, and many other factors.
One of the most notable and problematic fee structures is the transaction fee, typically 1% or more on the exchange rate. This fee structure would make it very difficult to purchase cryptocurrency if you don’t opt into a platform that offers a competitive fee structure.
Variety of Cryptocurrencies Available To Trade
There are a variety of cryptocurrencies that are currently traded. These include Bitcoin, Ethereum, Litecoin, and Feathercoin, among others. Each of these currencies has its unique set of characteristics that will help you position yourself in this new and booming market. So, before enrolling in any cryptocurrency exchange, it’s always a good idea to check if they offer a variety of cryptocurrencies to trade in the first place.
Many exchanges will give you an interface to help you buy and sell cryptocurrency, and more and more of these exchanges are opening up to new customers. However, not all exchanges provide good customer service.
As one of the most popular cryptocurrencies becoming more common, it is vital to ensure good customer support. So that, when you have a problem, you should be able to reach out to the company in the most efficient way possible.
Given the newness of blockchain technology and the complicated nature of these exchanges, it is not surprising that there is a sense of uncertainty within the market. Some even go as far as to call themselves ‘jobbers’ and establish their illegal needs.
They use shoddy software to manage the trading transactions, inflating figures used to market themselves, or even worse, totally scamming users and disappearing with their money, never to be seen again.
Good cryptocurrency exchanges offer excellent services at competitive prices for those who know where to look.