10 Criteria for choosing cryptocurrency exchange




 
10 Criteria for choosing cryptocurrency exchange
 
Thinking about choosing best cryptocurrency exchange mean you’ve understood what is cryptocurrency, altcoin or altcoins, and possibly what it means for trading digital currencies

 
Cryptocurrency and Blockchain assets is on a boom as many people are talking about it, believing it’s a great way of making money, storing values and exchanging one digital currency to fiat currency or other digital currencies. 
 
Cryptocurrency involves high level of risk, and the ability to manage crypto risks – Pseudonym identity, volatility, DDoS etc and move on for trading breeds precaution for choosing best reliable cryptocurrency exchange for buying and selling Bitcoin with other altcoins available in the crypto market.

 
Haven’t known what is in there opportunity cryptocurrency and blockchain technology present, where you take back the decentralized power from the centralized economy, becoming your own bank with your personal access keys and making more money through cryptocurrency projects like Airdrop, crowdsale, ICO, advancing the course of your cryptocurrency investment portfolio requires you choose the best exchanges for trading Bitcoin and altcoins.

 

What Exactly Is Cryptocurrency Exchange?




Digital currencies exchanges just like stocks, bonds and real estate market is where cryptocurrency is being traded or exchange for other virtual monies. At stock market exchange, stocks and bonds are traded. In forex exchange, indices, equities and commodities are traded. In cryptocurrency exchange, coins and tokens are traded. 
 
Cryptocurrency exchange works in form of blockchain because, it requires no third parties to carry out transaction, and sending, receiving and confirming transaction are all done in the pre defined consensus.
 
Since cryptocurrency exchange involves high level of risks such as hacking, volatility, non reversibility of transaction etc, it therefore requires acute consciousness and understanding of it modus for successful operation. Both email, username, password, private keys, secret pin, wallet, hash ID etc are all case sensitive that may required in a processes of logging into your exchange account to carrying out cryptocurrency transaction either as peer-to-peer, peer-to-merchant, peer-to-exchange, or exchange-to-exchange.

 
Against risk of hacking your exchange account by losing access to all your bitcoin and altcoins, it is highly recommended that you choose or reset both your password and withdrawal pins to a strong generate pins (*#@!3<$?Q% instead of “JamesSmith) longer than eight in digit.
 
Misplacement of private keys, 2 factors authentication and withdrawal pins is as good as misplacing your crypto treasure vault. Since the crypto transaction is non reversible using a wrong wallet address for receiving the coin or token is as good as throwing them into the sea. 
 
Cryptocurrency exchanges use Bitcoin as the market mover and that why BTC is listed in all existing crypto exchanges in the crypto market. To buy other altcoins, you must first purchased bitcoin and then trade deposited bitcoin for other altcoins.

Any cryptocurrency listed on exchange can directly receive any amount of coin or token sent from external wallet address of the same cryptocurrency, using the ’Deposit’ tab to generate receiving wallet address just like ‘withdraw’ tab for withdrawing coins or tokens to external wallet.

Order than Bitcoin as a exchange market mover, fiat currency – USD, USDT, and Ethereum have also been added in some exchanges as trading pairs (BTC/DOGE, ETH/ETN, USD/EOS, USDT/XRP) to support Bitcoin for buying various altcoins, but each of these trading pairs may not be able to trade all the listed cryptocurrencies on the exchange; so you must first fund the trading pairs of the altcoin you want to buy before trading.

Not all cryptocurrencies are listed on specific or all exchanges. Some exchanges have high number of listed cryptocurrencies and some have few. This limitation of cryptocurrency exchange listing includes failure to meet up requirements.

There are over 200 exchanges in the cryptosphere, and more and more will spring out just like new crypto projects. Some cryptocurrencies have also built in their own exchanges – Kucoin, Thether, Upcoin etc; and you need to be very careful choosing the best exchanges for building your crypto portfolio.


Criteria for Choosing Cryptocurrency exchanges


 
1. Exchange rate – Each crypto exchange has it fixed amount/price for trading coins or tokens, and this minimum transaction rate differs from exchanges. 
 
Binance as one of the most popular and crowded cryptocurreny exchange requires a minimum of $30 for buying any altcoin, while other exchanges live C-cex requires as low as $5 minimum exchange rate. 
 
In this case, Binance may not be the best exchange for crypto beginners or investors with limited fund to purchase a single cryptocurrency on a $30 minimum, whereas, $30 can trade 3 to 5 different altcoins in some exchanges like C-Cex.
 
High exchange rate may not be the best option for newbie trader mostly, with limited fund hoping to diversify crypto investment portfolio, when considering hundreds of other exchanges in the crypto-sphere.

 
2. Transaction fee – As a cautious crypto starter or beta tester, trading fee is the next criteria I personally consider before choosing cryptocurrency exchange after determining minimum transaction amount (exchange rate).


I know being expensive is not cheap, and not as a free stuff monger, but choosing best crypto trading platform with minimum transaction fee may be an opportunity for both poor and middle class crypto investor with limited investment capital to participate in trading cryptocurrencies on exchanges with least cost.

Just as Binance for example, with over 5 billion users with high exchange rate of $30 as the way of curtailing new users, so it can also has an high transaction fee compared to other exchanges like Whaleclub and Bitfinex that offers insanely low transaction fee.


3. Safety and security – I told you before that cryptocurrency exchanges works slightly like blockchain technology, which is an open distributed ledger that record transactions between two parties effectively and in a verifiable and permanently ways, where there is legal regulator of the market, and every user is responsible for his or fund.

It is very important to look at the security level crypto exchange before choosing for trading by determining if there’s provision for secret pin either as second login pin, account authentication pin, fund withdrawal pin, private key, etc as a measure for securing and to access the crypto exchange personal account dashboard.

You wouldn’t want to lose guard your coins or tokens  by not choosing the best crypto exchanges with smooth technical functionalities, or exchange that's prone to users account hacking, or by any means with history of overwhelmed DDoS. All these are bit of what must be considered as safety and security provision for choosing secured cryptocuurency exchanges.


4. Design – While some cryptocurrency exchanges by design are starkly stuffed and can take a lot of data to clearly open a page, some are really user's friendly on both web and mobile views.

The theme, template or script of a cryptocurrency exchange has a lot to make or mar the exchange popularity. Some stuffily designed crypto exchanges requires users to watch videos to clearly figure out deposit tab, withdrawal tab, balance and exchange market tab. This may not be a good choice for beginners, whereas, in some exchanges, a starter can easily get the glimpse of utilizing the platform without delay.

Many exchanges fails to integrate into theme design some important features like “show/hide total balance,” percentage of price change indication (+ or -) and the lifetime trading history of all user’s deposits, exchanges (orders) and withdrawal for reference purpose. 


5. Trading volume – This may be referred to a trading capacity of a given exchanges per day, or a total number of Bitcoin and altcoins traded as listed on a given exchange in the past 24 hours, and can be determined through Coinmarketcap – HERE. The higher the volume of trading (total volume of trade per exchange), the more investors have entrusted their fund to the exchange.


Older exchanges always have higher number of cryptocurrencies listed for trading, but that doesn’t necessarily mean new cryptcurrencies in the market are sure listed on old exchanges. Some exchanges may not be that older, but are popular with high trading volume due to merited criteria drawing in more investors.
 
However, it worth staying away from new crypto exchanges with low trading volume by giving them chance to proof themselves.


6. Deposit and withdrawal method – You need to check the crypto exchange method of depositing fund and withdrawal as well. You need to determine if the exchange platform accepts Bitcoin or just subject to only USD. You also need to figure out if the listed coins and tokens are traded using a single currency or multiple trading pairs (BTC/STORJ, ETH/POLY, USDT/MOON).


Since some cryptocurrency exchanges are stuffily designed, you need to find out the method of withdrawing coins and tokens by determining if all the respective listed digital currencies have their instant deposit and withdrawal tab, and if its free to deposit any amount of a given coin or token as listed on the exchange, or requires a fixed minimum deposit that may not suite your budget.

As very important, you must also consider the minimum withdrawal number of a given cryptopcurrency. The higher the minimum withdrawal limit of any cryptocurrency as listed on exchange, the more unfavorable it is to investors with limited trading capital.


7. Account registration and verification – Binance for example, reaches 5 billion users, and the increasing huge traffic due to ICO boom breeding new users was slowing down their server, which makes the platform to stop accepting new registered members. I also remembered Cryptopia suspending new users registration based on reasons best known to them. Issues like this can be an hindrance to a desperate crypto investors.

While some crypto exchanges like Bittrex and HitBTC still allowed new users registration, completeting the registration and verifying the trading account could be another bulging issue, knowing fully well that not every one may have Android device for downloading exchange app and completing 2 factor authentications.

Some exchanges goes as far as requiring you upload a scanned front and back authorized identification card like international passport, driving license, or government issued identification of you as new users account verification process, which may be one simply factor driving you to other exchanges due to inability to meet up criteria for approval and trading.


8. Smooth payment and fast confirmation A streamlined integrated cryptocurrency payment interface increases conversion and makes better experience of the trader. Any persisting delay to validate order, confirm deposit and withdrawal may be a big time quit notice for traders to go elsewhere.

While trading Bitcoin and altcoins on a certain exchange, expectation of assured liquidity and execution of orders must be as fast as possible with respect to volatility nature of the cryptocurrencies prices.


9. Reputation or user’s review – Reputation is one factor for choosing cryptocurrencies exchanges and thus, can be determined by positive or negative reviews, ratings, citations and mentions.


Determining the exchange founders is also necessary before choosing cryptocurrency exchange to know if the exchange founder is anonymous with lack of proof of reserve or othewise. You can simply track people’s thought and review about a given cryptocurrency exchange by searching its name on Google and watching related videos.


10. Geographical location – Digital currency exchanges are not usually licensed and majority of countries do not have any law related to cryptocurrency, but this could hinders user’s ability to use and trade Bitcoin and altcoins, should there be such law in the future.
For example, some government like South Korea are already on the seek out of some degree of control over the digital currency transaction due to problematic factors like money laundering, illegal drug smuggling and terrorism. 

China on the other hand, has banned the existence of some of these exchanges from their territory. It is better know the geographic location of the crypto exchange before making decision as an investor, since the location of the exchange dictate the law it will have to comply with.


Summarily, not all cryptocurrencies in the cryptosphere are listed on a single exchange, that’s why diversifying crypto investment and exchange is a recommended. Considering 1587 cryptocurrencies in the cryptosphere as at the entry of this article, following the upcoming ones, many of them are already a failure due to inactivity.

Bitcoin has already proved it potential while altcoins like Ethereum, Litecoin and Monerio are trying to show some strength. We can truly tell which of these digital currencies will make a good investment and which will fail. Diversifying your cryptocurrency investment portfolio by diversifying into best exchanges may be the best option for you, and not keeping all of your eggs in one basket.





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