Crypto exchanges - trust, but verify

What to look for when choosing a crypto exchange

If in the 2010s crypto was perceived as a toy for geeks, today it can already be used to pay in stores.

At the dawn of their appearance, cryptocurrencies were conceived as an off-system payment tool, and now they fit perfectly into the existing financial system.

However, to enter this “brave new world”, you need to choose the right exchange. The right choice will help beginners minimize mistakes and protect them from financial losses. It’s like with a bank - no one will take their money to a dubious institution that serves Colombian drug cartels. Therefore, you need to take the choice of a cryptocurrency exchange seriously.

In this article we will tell you how to choose an exchange that you can trust, what to pay attention to first of all, and what they offer today. Don't miss out on attractive offers such as free promo codes and percentage discounts and choose the most tempting deal for yourself right now!

What are the types of crypto exchanges?

In general, a crypto exchange is a platform where you can buy and sell cryptocurrency, store and exchange it, deposit it at interest, etc.

They come in two types - centralized (CEX - Centralized Exchange) and decentralized (DEX - Decentralized Exchange).

The fundamental difference between them is that decentralized exchanges do not store user funds and do not control transactions. Funds are transferred directly from the user's wallet, which connects to the decentralized platform.

DEX also does not have a user verification procedure (KYC - Know your customer), which allows you to make transactions completely anonymously, which is often used by scammers.

Safety

Of course, the list of criteria for finding your own crypto exchange can be individual for everyone, but security is the foundation from which you need to start. On the exchange, every step must be safe - from the moment of depositing fiat currency into the exchange wallet until the start of trading.

At first glance, assessing the security level of a crypto exchange is not easy. However, you need to ask what protocols and standards the cryptocurrency platform uses, how and what personal data it stores, and how transparently it conducts its activities.

For example, the American exchange Coinbase, founded in 2012, received a license to operate in many US states. In addition, it became the first cryptocurrency exchange to enter the stock market.

Binance has the internationally recognized ISO/IEC 27001 security accreditation. The company received this accreditation after two external audits of its information security systems.

An ideal exchange will be transparent to users, with clear terms of use, fee structure and transparent transactions. It will publish regular reports on its activities.

Due to the fact that exchanges are a tasty morsel for hackers, it is correct to use a platform that offers its clients various protection programs, where there is an insurance fund or a refund.

You should also find out what methods of storing crypto assets are offered. There are two of them: actually, on the exchange wallet, and on another cryptocurrency wallet.

Exchange reputation

Even a superficial search on the Internet about a cryptocurrency exchange can tell you a lot about it. First of all, you need to pay attention to information about hacker attacks, theft of user personal data, and complaints about the operation of the platform.

Information should be sought both in the media and on social networks (primarily Twitter and Reddit, because there is a fairly developed and active crypto community here).

Obviously, no exchange can guarantee 100% protection, because there are no networks that cannot be hacked. However, crypto exchanges that resumed operations even after serious attacks and managed to cover the loss of client funds (if any) with insurance premiums deserve trust.

Deposit and withdrawal of funds

The more options for replenishing a wallet and withdrawing funds from it, the more convenient it is, firstly, to work with it, and secondly, this is also an indicator of the company’s reliability. After all, popular payment systems, as a rule, do not cooperate with those who conduct illegal activities or have many complaints from customers.

It is also important that each of these payment channels is secure. Notice how each of them implements transaction security.

Find out about the commissions the exchange charges. This, in fact, is the main source of income for cryptocurrency exchanges. For example, the world's second largest cryptocurrency exchange, Coinbase, which is considered one of the best platforms due to its simple cryptocurrency investment process, has a high commission of 1.49% on each trade.

Cryptocurrencies and trading pairs

The world of cryptocurrencies is not only Bitcoin. Beginners are advised to choose exchanges that work with a large list of different altcoins and trading pairs, because the more they are represented, the more opportunities for trading and investing.

The most popular pairs are BTC/ETH, BTC/LTC, USDT/BTC, ETH/LTC, but the popularity of certain trading pairs depends on the exchange itself.

But there are sites that list dubious coins. In this case, a trader, especially a beginner, is at risk of investing in a token issued by scammers. The presence of such crypto-assets is a matter of reputation and attitude towards your clients.

Crypto exchanges should also continually consider new cryptocurrencies that are becoming popular for listing, thereby demonstrating that they are listening to users.

In addition, it is worth familiarizing yourself with the services offered. A good crypto exchange will usually have a variety of products that you can take advantage of depending on your risk appetite and your chosen investment strategy. This can be staking, loans, futures and margin trading.

More mature global exchanges are also introducing a new form of financial services known as DeFi (short for decentralized finance).

DeFi is an ecosystem whose participants interact with each other directly, without intermediaries - banks, credit institutions and others, which allows transactions to be carried out faster and cheaper. Its work is based on DeFi protocols, most of which operate on the Ethereum blockchain.

Registration conditions

When registering on a particular site, almost everyone simply clicks “I agree” and continues the process without thinking about the consequences.

Registering on a crypto exchange is not the case when you need to do this. The conditions here need to be carefully studied. After all, it may turn out that the platform does not provide services in our country or your country.

It is necessary to read footnotes and all the fine print with special attention, because, as we know, the devil is in the details. First of all, this concerns commissions and other payments that may be charged by the platform.

If something is not clear to you, it is better to consult with one of the industry specialists or contact the crypto exchange support service.

By the way, the presence and accessibility of such is also an indicator that you should take a closer look at.

Ideally, the support service should work around the clock, because the cryptocurrency market does not sleep, it is open 24 hours a day, 7 days a week, 365 days a year, without a break for lunch or coffee.