Cryptocurrency is one of the hottest new investments for people that want to try their luck at making a fortune. Some people have taken the plunge and have invested plenty of time and money into buying crypto. Buying the right currency can help you make money, but finding the right crypto exchanges can do a lot to help you grow your fortune.
Don’t let your tokens sit and hope they increase in value. It’s time to put that crypto to work and find the best crypto exchange to make even more money and investments!
It’s only natural to have some reservations about crypto trading if you haven’t done it before since the practice is so new. Luckily for you, we’re here to help.
Want to know how to choose a crypto exchange? Here’s what you should look for to ensure you find one that’s reputable and profitable.
Transparency
You never know who is on the other side of an exchange when you’re working with cryptocurrency. You could be dealing with another investor that’s just as passionate about trading as you are. You could also be dealing with someone that’s trying to scam others or even a bot.
This is why it’s important to think about transparency when you’re looking at exchanges. Take the time to dig deep into an exchange’s practices around identity verification.
Some exchanges have anti-money laundering and know your customer practices that require that users submit personal information to verify their identity before exchanges take place. This could include a photo ID or even proof of residence. In some cases, they may ban people from certain countries from participating in exchanges to lessen the chances of fraud.
Community Reputation
Reputation means everything to businesses of all kinds, and crypto exchanges aren’t any different. It’s important to do your own research before you use an exchange to see if they have a bad reputation.
Since crypto exchanges are relatively new, you most likely aren’t going to be able to find reviews for them on Yelp or Google My Business. Mainstream review sites may not have the information you need, but there are plenty of forums, specialty sites, and subreddits that do.
The crypto community is growing larger every day, and their users are very vocal about potential scams and unreputable exchanges. Before you sign up for an exchange, do a search for their name paired with the terms “scam”, “fake”, and “fraud”. Whatever you find in those results can tell you a lot about the exchange.
Security
Security is absolutely crucial when you’re doing exchanges. Trading with an insecure exchange can leave you vulnerable to hackers or other predatory traders.
Each exchange you consider using should have a clearly defined security policy you can check. If you’re on a site that doesn’t have a security or privacy brief you can access, they may not be reputable.
Check to see if your potential exchange has two-factor authentication (2FA) set up to do transactions. 2FA has become the standard for internet security. The right system can help protect your assets, identity, and other important information.
While you’re researching exchange security, see if they offer services like cold storage asset reserves or custodial coverage. Those services are the gold standard for crypto exchanges, seeing them offered means you’ve stumbled upon a reputable exchange.
Fiat Money
When we mention “fiat” in the cryptocurrency world, we’re not talking about the car. Fiat money is a currency that’s backed by a government and not a commodity like gold or silver. US currency would fall under the fiat category.
It isn’t completely out of the ordinary to find exchanges that only allow members to trade other cryptocurrencies. While it may not be unusual, it should give you pause.
Finding an exchange that allows people to exchange fiat money is one you can most likely trust. After all, a place this is trying to scam people wouldn’t want to give away legal currency.
If you do find an exchange that offers fiat money, make sure you read up on their trading policies carefully. Some exchanges may only allow fiat exchanges through certain banks.
Insurance Funds
You never know what can happen in the world of cryptocurrency. You may have traded with someone that didn’t hold up their end of the deal. It’s even possible that a reputable exchange may have picked up a few scam members that are trying to commit financial crimes.
This is why we recommend going with exchanges that offer their members some form of insurance. This insurance won’t be able to protect you from making bad investments. However, it could protect you if run into instances of fraud or other problems.
Volume
It’s going to be hard to exchange currency on platforms where there aren’t a lot of users. There’s nothing worse than putting all of your hopes on one exchange than noticing that you can’t move anything or find anything you want buy.
Figuring out how active certain exchanges are can be tricky. After all, seeing a lot of public listings for trades doesn’t necessarily mean that every poster is active or that people are engaged.
We recommended looking at crypto forum posts to determine how reputable an exchange is when you’re thinking about security. Forums can also be helpful when you’re figuring out how active the user base is. Search around and see what people have to say about the volume of users on some exchanges.
Find the Right Exchanges
If you really want to make money with cryptocurrencies, exchanges are an absolute must. Finding the right one doesn’t have to be difficult. As long as you focus on what we outlined in this article, you’ll be on your way to making your dreams of a crypto fortune come true!
Do you have other questions about the right way to find exchanges? Be sure to look around for other informative insider content on cryptocurrency.
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