The first part of this article addressed what a cryptocurrency exchange is and its types. Aside from deciding which type of exchange will suit your needs, here are 7 significant things you’ll need to think about before choosing one.
1. Accessibility or Jurisdiction
Before signing up with an exchange, find out if they serve customers from your state and your country. In the US, some states have stricter regulations than others. Some states require crypto exchanges to get a license. If you live in those states, it will serve you well to choose an exchange with a license. Where you live may also affect the coins that an exchange can offer to you. Some countries have banned certain coins. You can find information on the limitations of an exchange on its website or in the terms of service.
Before you stay in a particular hotel or eat in a restaurant, you check out reviews. More likely, you’ll patronize businesses with great reviews. The same goes for crypto exchanges. Aside from customer experience, check for any scams or security breaches that have been associated with an exchange. Useful search terms are “name of exchange scams” and “name of exchange reviews.” One more aspect to check in customer reviews is an exchange’s customer service. See if they respond quickly, how satisfied customers are, and if they have live representatives that customers can speak with.
Digital assets aren’t as protected as fiat money in the bank. Check on an exchange’s security features, such as two-factor authentication and password recovery options. It’s also worth your time to find out how they store customers’ coins and if they have insurance against hacking or fraud. In certain exchanges, the Federal Deposit Insurance Corporation (FDIC) cover a set amount of users’ funds.
Simply put, liquidity refers to a crypto exchange’s ability to exchange your coins can be traded to other coins or fiat money. You’ll want to find out the volume of orders that go through an exchange. A high volume indicates the number of transactions, how many users there are or how large the users’ assets are in the exchange. High trading volume is important because it means you will have a better chance of buying or selling crypto at the best price. Don’t just rely on the exchange’s declaration of volume. Double-check with third-party websites that assess volume data, like CoinMarketCap.
5. Coin Offerings and Prices
There are over 18,000 crypto coins as of March 2022 and exchanges don’t offer all of them. Popular coins such as Bitcoin or Ethereum are available in most exchanges, but newer ones may not be. Crypto coin prices may also differ from one exchange to another.
6. Transaction Fees
Most exchanges charge a fee for each completed transaction. Fees may either be fixed or a certain percentage of your trade. There could also be fees for deposits and withdrawals. Knowing all the fees is crucial if you plan on trading frequently or if you plan on withdrawing coins often to keep them in your own crypto wallet.
A crypto exchange that has a user-friendly interface will be best for beginners. This will help you make trades easily and it lessens your risk of making mistakes that can be costly. Some exchanges have “basic” and “advanced” views. You can start using “basic” layout and switch to “advance” when you’re more comfortable.
Choosing the right exchange can help make for a smooth crypto journey, but it’s not the only thing to you’ll need to research as a beginner. You will also need to know which coins are worth investing in, how to be secure online, especially when making crypto transactions, and the importance of crypto wallets.
If you plan on buying the top privacy coin Monero as one of your digital assets, you’ll need a web-based wallet for easier and faster transactions. XMRWallet allows you to send and receive Monero instantly on the blockchain, while remaining in control of your XMR and keys. XMRWallet is open-source and allows you to use Monero without requiring you to download any software. It has multiple language support. And best of all, it’s completely free, including importing previous transactions. Registration is not required, and it’s easy to use. Create your account now and take advantage of everything XMRWallet offers. Using XMRWallet for your Monero coins will expand the privacy and anonymity that Monero provides.