Last Updated on August 16, 2022 by aicrypto
Below, we have listed our most important test criteria to help you find the right crypto exchange.
You want to start trading as soon as possible? Okay, let’s find a reputable crypto platform. If you keep these tips in mind, it shouldn’t be difficult.
Regulation & Licenses
- Many crypto exchanges now have official, state licenses. This makes them extremely trustworthy and safe for you as a user.
Nevertheless, there are many good crypto exchanges that are not yet fully regulated.
Does this make them unsafe for you? – No, because many exchanges are relatively new, for one thing, and additionally cryptos as a whole are not regulated.
Binance, for example, is by far the largest crypto exchange and is not yet regulated in every country. Nevertheless, it is one of the best and most reliable crypto trading platforms simply because of its sheer size.
Security measures of the exchange
Security is hugely important, especially when it comes to your money or cryptos hugely important. Crypto exchanges take numerous precautions to protect themselves from attacks and hacks.
Specifically, we recommend the following steps when buying and selling cryptocurrencies on an exchange:
- Use a strong password
- Always use 2FA authentication if possible.
- Transfer your coins to a secure hardware wallet after purchase
When it comes to tradable cryptocurrencies, the first priority is of course to have as much choice as possible. As a user, you have at all good crypto exchanges, the best-known coins such as Bitcoin or Ethereum available.
However, it becomes interesting when it comes to lesser-known cryptos that have just come onto the market.
Here, you should definitely check in advance before signing up with a crypto exchange whether they actually offer the coin you want.
Basically, with most crypto exchanges, you have the choice between depositing with real money or by using your cryptos.
In terms of fees, there are sometimes huge differences between providers. If fees are above 1%, they are comparatively high and more likely to be found in regulated marketplaces.
Market makers, those who provide liquidity to the market, often pay less in fees. In addition, there may be fees on deposits or withdrawals that you should be aware of.
Nowadays, everyone owns a smartphone, so it’s natural to want to use crypto exchanges conveniently on your phone as well. Of course, providers have recognized the signs of the times and offer mobile apps or mobile versions of their websites.
All you have to do is install the provider’s app on your cell phone, log in on your phone, and you can start trading without any complications.
By the way, you can use all the functions of a crypto exchange directly on your smartphone.
All-round customer service
Getting help quickly and competently is very important in our view if you have problems or questions. Most cryptocurrency trading platforms are now available through various channels, such as:
- Contact form
- Live chat
- Messenger such as Telegram and WhatsApp
Sometimes the support is not available in your native language. You should check, where the crypto exchange is located.
Number of users
The popularity and reliability of a trading platform is also reflected in its number of users. If a provider already has millions of active customers, then it can be strongly assumed that they are also satisfied with the offer.
Large companies invest a lot of money in marketing and in their platform to get the trust of customers and also have to prove their good reputation.
If a crypto platform has very few users and the reviews are rather negative, you should think twice.
It is important that the exchange of your choice has enough trading volume. This ensures that you pay market prices for your cryptocurrencies.
However, liquidity also plays an important role when selling cryptocurrencies. Because if you want to sell a cryptocurrency on an exchange, there must also be a buyer for it. In the past, there was often the case, especially on very small exchanges, that not enough buyers could be found during sudden price drops when many investors wanted to sell.
What type of crypto exchange
There are different types of crypto exchanges. The different types of crypto platforms have an impact on trading.
Below, we have described the different types of crypto exchanges in more detail.
Centralized crypto exchange
With a centralized crypto exchange (CEX), your funds are held by the crypto exchange. You have to trust that exchange and hope that your funds are kept safe. Pretty much all major exchanges are centralized crypto exchanges. Examples include Binance, Coinbase, and Kucoin.
A decentralized exchange (DEX) like Biswap is a trading venue that focuses on decentralization. This means that the exchange is integrated into the blockchain and all transactions are confirmed and verified by the network.
It can also feature decentralized peer-to-peer transactions between users. Decentralized crypto exchanges (DEXes) are not yet as mature as hoped.
A small disadvantage, from the user’s point of view: At a decentralized crypto exchange, the private key must always be kept. If you lose it and want to recover your account, there is no way to get your cryptocurrencies.
A peer-to-peer exchange (P2P) is a website designed to link buyers and sellers of cryptocurrencies.
The P2P exchange is not an exchange that automatically initiates settlement. Rather, the platform assists with matchmaking.
Subsequently, buyers and sellers must independently agree on a price for the transaction.