What Crypto Exchange Should I Use?
By ROKKEX on Altcoin Academy
There are hundreds of cryptocurrency exchanges in the market. Some are ruling the industry and only care about the competition. Some are still trying hard to get to you through various ads and deals. But what really should you pick? Let’s talk about what you should care about while choosing a crypto exchange for you.
Security & Technology
So many cryptocurrency exchanges fall victims of hacks, data leaks, and user fund losses. This year alone, hackers already stole over $4 billion in crypto crime. To put it into perspective, it was around $1.7 billion for the whole of 2018.
You have to look at what technologies and data management methods the exchange is using. For example, the exchange website should be using HTTPS protocol and not HTTP.
It is the best practice if the exchange is keeping deposits in cold storage. It means that your coins are safely stored offline, beyond the reach of hackers.
The exchange should offer a 2-factor authentication (2FA) option. The best choice is either software (Google Authenticator) or hardware authenticators, as authentication via SMS has already been hacked numerous times.
Also, data encryption and email verification are essential, so you can know that your data will be safe no matter what happens and you can be notified of everything that is happening on your account.
Some additional features such as IP whitelisting would protect you from someone accessing your account outside your home, office, or another chosen network. And just as useful — session length limiting feature so you would know that even if someone did gain access to your device, the session would be already over, thus someone else could not access your funds.
Some providers make sure that everything is kept up to standards by going through the audit program while many centralized exchanges will go the extra mile and protect their users and themselves with KYC and AML procedures.
Transparency
Audits are important not just for security but transparency too. The industry already suffered from quite too many fraudulent projects and scams, so transparency is crucial. It is usually a sign of legitimacy.
You should look for a physical address associated with the exchange. Without knowing where the exchange is located, you will not be able to identify the legal ramifications of your investments. Also, if your account gets hacked, it would be easier to address this issue with the exchange and any regulators that may need to be followed.
Some exchanges introduce you to the whole team and the team’s life, so you can know who is behind everything and what is their experience. It helps you to evaluate the project and increases trust.
Liquidity & Volume
Liquidity refers to the ease of buying/selling your assets in the market. You can see it all in the order book of your exchange. Higher liquidity means that there is a higher number of buyers/sellers. High liquidity is good as it leads to better price discovery, and it allows you to transact faster.
Though, be aware that liquidity can be different for different trading pairs on the same exchange. For example, it can be high for BTC/EUR, but low for BTC/USD.
Also, some exchanges might not publish an order book. It is more common with new or smaller exchange platforms. Their order book might be still on the way, or it could be their choice because they have a lower volume than other exchanges. That does not mean that the exchange is not legit, but it does take away some points from transparency.
Fees
You should always check the transaction fees as it will affect your usage of the exchange. The fees should be reasonable as compared to the rest of the market.
The standard charges usually are less than 1% per transaction and may go lower if you are trading in higher volumes. Though, some exchanges are known to offer unreasonably high withdrawal fees for some assets, so you should check what applies to the cryptocurrencies of your choice.
Be aware of ‘convenience charges.’ Some exchanges offer a way to buy cryptocurrencies with your credit or debit card and place a significantly higher fee on such deposit.
User Experience
Of course, the experience and opinion can vary from person to person, so you should think about what is needed so you could have a good user experience.
Maybe you are interested in some specific pair that not every exchange has, or perhaps you are located in a country that is geo-restricted in some exchanges. If you are a newbie, you should look for a user-friendly interface, with a strong knowledge base and easily accessible customer support. If you want a high level of anonymity, you should go for a decentralized exchange. If you do not want to worry about the losses and hacks, you should go for high security, transparency, and probably more centralized exchange.
Take your time and do not cut it short on things that matter the most.
Also, if you are interested in helping us build a safe, fair, and reliable cryptocurrency exchange future, do not hesitate to join us by investing in our STO.
At ROKKEX, we take security extremely seriously, and our crypto exchange is built on ‘Security First’ principle. We want to share our expertise with the broader public for the world to become happy, safe, and wise :)
If you have any ideas and suggestions, contact us at
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