A cryptocurrency exchange platform is an online website that connects sellers and buyers of cryptocurrency. It also promotes the selling, buying, and/or trading of cryptocurrency contracts or assets.
Whether you’re purchasing your cryptocurrency for the first time, looking at how to expand your coin portfolio, or considering the best cryptocurrency exchange platform, it’s essential to get the lists of the top cryptocurrency exchange platforms and compare them.
Here are the advantages of comparing cryptocurrency exchange platforms at first before making a transaction:
1. More options
As a cryptocurrency trader, it’s a must to do your due diligence so you can have more options for better comparison. Instead of trusting one specific platform, why not try to make a list of three or more among the best cryptocurrency exchange platforms of your choice.
From the lists of the three or more best cryptocurrency exchange platforms that you have chosen, make some in-depth study and analyze them. Consider factors like payment methods, trading pairs, security, geographical restriction, customer support, and other benefits.
For comparison, you can create a table of your chosen best cryptocurrency exchange platforms and give points with all the factors. The winner would be the platform with the maximum points earned. By this, it can help you make the final decision on what cryptocurrency exchange platform you can use.
2. To check its reputation
In choosing a cryptocurrency exchange platform, try to check-out on its reviews and the approximate date of launching. An old cryptocurrency exchange platform will most probably have already gone through its development stages. Some may even gain a good reputation over those years.
Before you trust the cryptocurrency exchange platform, it must have a license and is officially registered. Have in-depth research to check-out whether the platform that you’re trying to consider has cases of hacks or scams. You can learn about its reputation through the online reviews made about it. Or search on different social media platforms about cryptocurrency exchange, and it’ll show posts or forums about it.
3. To ensure the security of account and transaction
Security is another vital factor you have to take seriously before you start your cryptocurrency transactions. Most of the cryptocurrency platforms offer two-factor authentication (2FA), which is a form of protection for your account. It means that whenever you make any transaction, you’re required to enter the security code received from the authenticator app or on your phone to process your transaction.
Security features on the exchange include anti-phishing procedures, encryption, cold storage, Know-Your-Customer & Anti-Money Laundering procedures, two-factor authentication, and IP protection.
Only a few platforms provide IP protection; its function is to provide warning if login is made from an unauthorized user or device. The best platform to consider is one that offers the best security for your transactions and account.
4. To check for an insurance provider
Trading on an insured cryptocurrency platform means you have the right to receive compensation in case someone hacked the platforms and stole the coins from your account. Unfortunately, only a few cryptocurrency exchanges provide insurance for their digital assets which are stored either in cold storage vaults or on their servers. So it’s essential to check a platform that also offers insurance.
That way, you won’t have to experience the nightmares of other cryptocurrency traders who lost thousands and millions worth of money when their cryptocurrency exchange platform suddenly vanished.
5. Get an idea about the types of cryptocurrency exchange platforms
You need to check on the two types of cryptocurrency exchange platforms, which are centralized exchanges (CEX) and decentralized exchanges (DEX). Centralized exchanges (CEX) performs as a middleman or the third party company between the seller and buyer in trading cryptocurrencies.
On the other hand, in decentralized exchanges (DEX), the concept of the middleman is removed as it directly connects the sellers and buyers through the blockchain. A decentralized exchange (DEX) is technically safer. Nonetheless, they have their drawbacks of slow platform updates, low liquidity, and low popularity.
Today, the centralized exchanges (CEX) are the go-to cryptocurrency exchange platforms. However, the cryptocurrency community is working on some decentralized exchanges (DEXs) in solving their drawbacks.
6. Choose the preferred payment method
If you’re serious about being a long-term trader of cryptocurrency, then selecting the best cryptocurrency exchange platform with low fees is the best thing you must do. In this case, you can save a lot of money from the trading fees.
Trading and cash out has a smooth process if cryptocurrency exchange platforms have several payment offers, like Crypto and SEPA deposits, credit or debit cards, wire transfer, and PayPal. Or else, you will also need your funds to be transferred from one platform to another.
7. Identify the best customer support
A cryptocurrency exchange platform or any company should have a devoted customer support team to immediately solve the issues and concerns that customers face during transactions.
Sadly, only a few cryptocurrency exchange platforms provide 24/7 or live chat for customer support. Other platforms can even take up to a week or more to answer some customers’ questions, or they just send standard reply messages which don’t help in solving customers’ problems.
In choosing the best cryptocurrency exchange, make sure it has excellent customer support that provides immediate actions to the issues and concerns of customers. Learn about them through online reviews as well, or you can directly ask them about it. The length of time they reply says it all.
Today, there are more than five hundred cryptocurrency exchange platforms, but not all of them are reliable. Not all of them can secure your account and transactions. Not all of them provide some benefits, and not all of them come up with fair fees.
That’s why it’s good to compare various crypto exchange platforms so you can have more options. Then you can check the ones with the best reputation, security, and insurance provider. Moreover, by comparing these exchanges, you can learn the two types of crypto exchange that will suit your preferences. Also, knowing the payment methods and customer service can determine whether you can easily reach out to them.