When Choosing A Crypto Exchange: Security or Reputation?

Whether you are a trader, miner, or just a crypto enthusiast, at some point you might want to try your hand with another cryptocurrency. It might be the curiosity that drives you to do that or the need to expand your trading or mining portfolio. A great way to do that would be to use a

cryptocurrency

exchange. Why, would you ask？ Well, it is fast, easy, and doesn‘t require you to start your own mining operation to get some crypto. How to choose the service that you would like the best？ All cryptocurrency operations are final, so you need to be extra careful with your assets. WikiBit has compiled a list of characteristics that you can use to find a

cryptocurrency exchange

that will offer the best possible benefits to you. Let’s take a look, shall we？

#1. Reputation

While the crypto world is all about transactions and systems that work without trust, reputation is what makes or breaks the platform. As any sensible crypto owner does research before trusting a platform with their assets, they should look into what other people think about the exchange in question. Since the crypto world is rather novel, at least in comparison to other financial markets, it is important to know who is who on the scene. While the research doesn‘t eliminate the possibility of being scammed, it helps to minimize it. A good idea would be to search the name of the cryptocurrency exchange with a ’scam addition. Reddit crypto-related communities are usually a golden trove of information, as long as you can filter it. And, of course, crypto-related blogs often talk about the best exchanges. In fact, we at Changelly did a piece on the biggest

cryptocurrency exchanges

of

2019, so you can start here.

#2. Security

Now, that you are sure that the exchange wouldn‘t disappear with your hard-earned crypto, it is time to make sure that others wouldn’t do it either. That‘s where the security of the platform comes in. There are a few ways to judge if the platform has needed security. First off, check whether or not it has two-factor authentication (2FA). Nowadays, it is basically a security standard to have one. It would also be a good idea to check what type of 2FA they have: Google authenticator, SMS codes, email verification, and so on. Secondly, check if they offer security-related services and different storage options. Maybe cold storage reserves, or custodial storage services. While storing assets is in no way bad, it makes cryptocurrency exchange look more favorable for a hacker attack. Some exchanges don’t store your transactions, only relaying them to be exchanged.

#3. Available Assets

We can‘t talk about cryptocurrency exchanges and their criteria without mentioning probably the most important of all: what you can actually swap there. While almost every one of them (and most definitely the big players) has Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), smaller coins and tokens rarely have that much of a representation. So, it would help if you kept in mind what kinds of assets you want to exchange and look up whether your chosen platform has them available. However, even if you didn’t find your desired coin or token, it doesn‘t mean that it wouldn’t appear there soon. Most exchanges keep listing more and more coins and tokens, as they keep gaining popularity and volume. So just keep an eye out, and you will be able to find it sooner or later.

#4. Trading Volume

Another criterion that you could use to judge a cryptocurrency exchange is its trading volume. While it might seem strange for a miner or a person who just wants to buy some crypto out of interest, it is a rather important part of any platform that deals in swaps and trading. After all, you can‘t expect to quickly swap 20 BTC on a low-volume exchange, as there would be little demand for that. This means that your transaction will take longer to process, and if you need to swap your crypto quickly, this just won’t do. Basically, the higher is the trading volume of the exchange in question, the faster you will be able to get the crypto of your choosing. This also minimizes the chance of you losing a lot of assets due to the volatility, as the price wouldnt be able to change that quickly. So choose a platform with a high trading volume for faster swaps.

#5. Transparency

While there is no trust in the crypto world, there are ways to make sure that your users can at least be assured that you are not going to just disappear with their money. Reputation and security are good ways to go, but the one thing that cryptocurrency exchange can reassure its users is making their transactions transparent. Basically, transparency allows you to see what is happening to your money once youve started using the platform. On a transparent exchange, there are no hidden fees or small prints. You see every price for every service and transaction right there and now. By using such a cryptocurrency exchange, you will not lose money on an arbitrary charge, and you will be able to calculate your fees and losses adequately and on the fly. As you can see, it is something that would be useful for anyone using the platform, and not just traders.

#6. Fees

While it might seem not that big in comparison to other criteria listed here, fees definitely play a big role in the day-to-day life of a cryptocurrency exchange user. Even the smaller fees have a tendency to add up. So seeking a platform is an obvious choice for anyone. Especially so if you are using it often, as traders often do. There are different types of fees as well. Some platforms have ‘flat fees’, meaning that you pay the same percentage from the sum no matter how big or small it is. Other exchange platforms charge fees depending on the sum of coins you are trying to swap, with bigger swaps requiring bigger fees. So pick a platform that will let you have the best profit and lose the least amount of money.