When you are trying to select a cryptocurrency exchange resource, it is not just a matter of ranking by volume, availability, or other general characteristics for your SOL to BTC convert. It is worth checking the commissions and the level of security on this resource. It is also important that the service has elements that will help protect all of the user’s resources. Thus, it is worth paying attention to whether KYC verification or 2FA technology is used.
You can watch many tutorial videos and read articles about crypto exchanges before you realize that a good crypto exchange is a well-known resource. Indeed, according to statistics, people are more willing to share bad reviews than the experience of positive work. Not every exchanger is beginner-friendly. Some platforms may even be vulnerable to hackers. How to choose a resource for exchanging cryptocurrencies?
How cryptocurrencies are exchanged
So you’ve decided to invest in cryptocurrencies. However, you are confused and unsure of where to start buying cryptocurrency. With so numerous choices possible, it can be hard to determine the most suitable choice for you. In addition, there are things to think about before making payments.
The process of buying and selling digital currencies has been simplified over the past few years. There are four important factors to be aware of:
- Location
To find out how and where you can purchase e-currency, you need to check the rules of your state.
- Payment method
Popular payment methods for purchasing digital coins are as follows: credit card, bank transfer, or cash. Exchange services work in different ways. Therefore, you need to select a resource that accepts the required type of payment.
- Cryptocurrency type
Not all digital coins are available for purchase on every website. You need to find a resource selling the token that you want to purchase.
- Fees cost
Each resource has different commissions. Some are cheap, some are more expensive. Make sure you know how much the commission costs before creating an account on any resource. You don’t want to waste time without checking and then finding out if the commission is too high!
Types of exchages
1- Centralized crypto exchanges
These are cryptocurrency exchanges that are controlled by centralized organizations. This means that these exchanges have a centralized server (s) and therefore a centralized point of failure.
2- Decentralized cryptocurrency exchange
A decentralized exchange is a cryptocurrency exchange that does not have a centralized point of failure. Without a centralized company managing the exchange, the fees you have to pay are also lower compared to a centralized exchange.
In addition, the decentralized exchange is also free from security threats as there is no single point of failure. The exchange operates on several nodes around the world and will not be disconnected at any given time.
Many decentralized exchanges use smart contracts to make transactions. Also, the only commission you will need to pay is the miner’s commission, which is lower than the centralized exchange commission.
3- Hybrid cryptocurrency exchange
This means that the benefits of both a centralized and a decentralized exchange are available on a hybrid exchange.
Conclusion
Of course, choosing a cryptocurrency exchange can make a huge difference to your cryptocurrency trading experience and results. If you choose a cryptocurrency exchange that is not secure, you may end up losing your valuable crypto assets to hackers. Pay attention to prices list like Huobi price for example.
Last but not least, you can factor in the transaction fees charged by the exchange to make sure you don’t overpay the exchange for your trades. Binance, Bitfinex, KuCoin, Kraken, and Bittoria are among the exchanges that charge very low transaction fees.
