Once upon a time, the idea of owning digital money probably sounded strange and impossible. However, as cryptocurrency has become more popular in recent years, more and more people have chosen to own and invest in it. Nowadays, almost everyone is educating themselves about blockchain tech and cryptocurrency. People are looking further into details like Kusama price and more blockchain technology to invest in the future.
If you want to buy a cryptocurrency and need help figuring out where to start, a cryptocurrency exchange platform is probably where you’ll begin. Cryptocurrency exchanges are online platforms where people buy and sell cryptocurrency. These platforms act as middlemen between buyers and sellers, letting people buy and sell cryptocurrencies with real money or other cryptocurrencies.
Due to the low trading costs, many investors choose to use cryptocurrency exchanges. But remember that some platforms might not be suitable for beginners and might be too complicated for people who aren’t used to trading stocks. Because of this, it’s essential to know how each exchange platform differs to find the one that works best for you.
Everyone has a different opinion about where to buy cryptocurrency. Before you commit to a cryptocurrency exchange, there are important things to consider, even if you’ve already decided.
Ensure the security authentication levels
One of the main reasons people use cryptocurrency is because it is safe, so it is just as important to choose a secure platform to keep your money safe. Some platforms offer insurance policies to protect your digital currency in case it is stolen or hacked. When choosing an exchange, consider other security features, like a two-factor authentication system.
Each bitcoin exchange utilizes its own unique set of safety precautions. Confirm that the marketplace you’re dealing with supports two-factor authentication (2FA). If this is not the case, the cryptocurrency exchange might not meet the requirements of the current security standards.
Check to see if two-factor authentication (2FA) is supported as well. Google Authenticator, Authy, and Yubikey are three standard methods for 2FA, and they will likely give better security than 2FA based on a cellphone SMS.
Every cryptocurrency exchange also has various security measures, some of which may need to be evaluated, such as reserves for cold storage and custody services.
Run a background check
More than 6,500 cryptocurrencies and more than 300 platforms are currently in use. Before choosing the best cryptocurrency trading platform for your needs, you should do your own research, as there are many options.
It may be a surprise that many cryptocurrency exchanges don’t offer all the cryptocurrencies. A few platforms might be unable to use new coins with small market caps. You should decide ahead of time which cryptocurrencies you want to buy and then choose an exchange that sells them.
Because the cryptocurrency business as a whole is still in its infancy, it is essential to be familiar with the track record of the various cryptocurrency exchanges. Many cryptocurrency exchanges were complicit in illegal operations, hacks, and exit scams, which resulted in their users being placed in a precarious position.
It is essential to research various cryptocurrency exchanges, search for such exchanges on Google with the word “fraud,” and assess the information obtained. It may also be good to search for cryptocurrency exchanges on the many different types of social media platforms available to determine whether or not complaints have been lodged against them.
If you come across something that makes you uncomfortable or is inappropriate, taking a look at the terms and conditions of each platform can be of assistance to you.
Coinbase, Binance, Kraken, Gemini, and Bitfinex are the most respected and prominent cryptocurrency exchanges currently operating.
Always complete your KYC
According to their locations, business methods, and the services they provide, various cryptocurrency exchanges are subject to various laws and regulations.
When creating an account on certain cryptocurrency exchanges, users must provide their personal information as part of the Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.
These requirements are different for each exchange that you use. To withdraw money from specific platforms or lift certain restrictions, KYC and AML are required.
Whether you’re new to crypto investing or have tried it before, it’s essential to think about how you can store your coins on that platform. There are different opinions about whether you should keep your cryptocurrencies in your hardware wallet or on the exchange. One thing that can be skipped about crypto exchanges is whether or not they have liquidity. You want to make sure you can sell your cryptocurrency whenever you want and for the best price. This means that the exchange needs to have enough trades going on. Usually, the more popular crypto exchanges will have more trades, which is called “liquidity.”
When you started reading this guide, you might have asked, “What is a cryptocurrency exchange?” You should now know better what to look for when choosing a platform. After all, keeping track of your finances, no matter which currency you prefer is an integral part of having a good trading experience.
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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.