Online marketplaces for digital currency traders buying, converting, and selling cryptocurrencies are known as cryptocurrency exchanges. Trading crypto is not a simple process, but crypto exchanges work to simplify and accelerate such processes.
So, making the right choice of crypto exchange is crucial considering the issues you need, like trading fees, convenience, speed, and other special financial products. Using our tips, you will easily select the crypto exchange to your needs.
7 Tips to Choose the Most Secure Crypto Exchange
When selecting Cryptocurrency Exchange, crypto traders should consider various factors, such as their safety fees and cryptocurrency offerings. It should be understood as much as how the digital currency is stored or how you can keep it in your digital wallet. Cryptocurrencies are mostly traded on centralized or decentralized platforms. So, here are some tips to consider when choosing the right Crypto assets exchange:
#1 Number of Coins for Trading
Nowadays, it is possible to trade more than 10,000 different coins as the crypto market gains popularity in the modern world. However, no universal cryptocurrency exchange offers crypto trade for all existing crypto assets.
So, while choosing is necessary to check whether the exchange provides desirable digital currencies. In addition, consider the menu and intuitive user interface if you are a beginner and have little experience in crypto trades.
#2 Consider Sufficient Liquidity
Look for an exchange with proper liquidity (the possibility to turn cash into coins and vice versa). As the prices of crypto change with enormous speed, it is crucial to know how fast the exchange occurs to be sure that the price will not change in some time. The easiest way to check it is to look at the trading volume. The higher the volume, the better it is for clients.
#3 Crypto Exchange Fees
As a rule, most exchanges charge fees when users make their deposits, trade, or withdraw money. The cost varies from 0% to 5 % per trade. Everything depends on the transaction type and payment methods. Active traders often pay higher trading fees if your trade lower amounts, and vice versa; if your trade bigger sums, the low trading fees are guaranteed.
#4 Security Assurance
Many exchanges are prone to cyber-attacks. Therefore, as a rule, you must go through two-factor authentication to get to the crypto exchange. However, extra measures can be like biometric login in Crypto.com Exchange, which is essential for facial and fingerprint smartphone identification.
Many crypto exchanges ask for providing such government-issued identifications as a driving license or passport for new crypto exchange account opening. There may also be an additional code layer for making account adjustments or when you buy or sell cryptocurrency.
#5 Insurance Policy
All exchanges should consider insurance from security breaches. In addition, customers must be sure that they are protected from crypto fraud and theft. So, insurance must be provided, and customers must be aware of the covered cases.
Moreover, traders must be confident in cash protection and be sure of offering FDIC (Federal Deposit Insurance Corp.) It will assist and insure deposits of up to $250,000 in case of bank failure. The prevailing number of exchanges offer such protection, but not all.
#6 Think About Security Controls
When selecting among the best crypto exchanges, paying attention to those with audits and security controls is desirable. In addition, every exchange should deliver reports of Security Organization Control that endure the credibility of financial operations and change functionality. Finding such reports on the exchange with easy access may be challenging. However, you may always request to provide it by the customer service department.
#7 Consider Tax Reporting
Profit from crypto or fiat currency is considered an income that requires tax reporting. Therefore, you should send a special form to a stockbroker when you report income. The problem may arise when cryptocurrency exchange platforms do not send such documents or fail to send deadlines. So, you should be careful and follow tax reports regularly.
Types of Crypto Exchanges
There are three commonly recognized types of crypto exchanges:
- Decentralized exchanges (DEX): The bright representative of such a decentralized exchange is Bitcoin, which has no single controlling point. It operates using servers on computers all over the world. It means that in case of one computer attack the system keeps running.
- Centralized exchanges (CEX): Are considered to be the most common crypto exchange type. One owner offers crypto investors or traders their crypto exchange platforms for trading. Thus there are greater trading volumes, liquidity, and amount of trading pairs. However, such a system has more risks of being attacked.
- Hybrid change: It is a combination of both exchange types. It aims to widen the functionality of older systems and combine centralized liquidity with security matters of decentralized exchanges.
So, when making your final choice, it is necessary to consider the type of exchange in addition to all the benefits of the platform to simplify and protect your cryptocurrency trading process.
Conclusion
When starting crypto trading, studying the market and selecting the suitable exchange for your needs is essential. In addition, it s required to consider all the security issues as digital assets are a rather attractive aim for fraudsters and hackers today.
FAQ
Some cryptocurrency exchanges provide access for customers with credit cards and bank accounts. You may exchange them for any crypto you want. Although some exchanges only offer a simple market order, some offer a more complex type of purchase, such as stop orders and limits.
Crypto exchanges have their registration and setup processes. Some exchanges may give you access without verification of your identity. You’ll need the following information and documentation in order to register on most cryptocurrency exchange platforms. The signup process typically begins by requesting identifying information.
All the respectful exchange conduct audits and pentests to eliminate vulnerabilities and ensure the security issue of the platform. So, before trading, it is essential to get familiar with all previously conducted audits and their results.
If one is searching to find crypto exchanges, one needs to look at fake sites or app stores. Even on legitimate platforms, ensure there have been no errors in the text, no fake logo, and in some cases if there is a little lock icon near the URL. In addition, remember that trading cryptocurrencies are dangerous, even with scams.