What is an ‘Exchange’?
According to Investopedia, An exchange is a marketplace in which securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments and other groups a platform from which to sell securities to the investing public.
Crypto Exchange is a place to buy or sell your cryptocurrencies for fiat currencies or other cryptocurrencies.
Image Source: bitemycoin
Criteria for choosing a Crypto Exchange
1. Daily Trading Volume
1. How many Bitcoins are being traded on daily basis
2. Higher the volume, more trustworthy is the exchange
2. No. of Trading Pairs
1. Currencies which can be exchanged for each other directly are called trading pairs
USD/BTC, INR/BTC. ETH/BTC are examples of trading pairs
3. Fees – Questions you need answers to
1. How much fee do they charge per transaction?
2. Is there any fee to deposit fiat currency? if yes, how much?
3. Is there any fee to withdraw fiat currency? If yes, how much?
4. How much is the fee to transfer cryptocurrencies?
4. Ways to deposit/withdraw funds
1. How convenient is it to deposit and withdraw fund to/from the respective Exchange
5. Complexity of Registration and Verification process
1. Check how convenient is to register on an exchange
2. Also, is there any requirement for verification process
6. Customer Service Performance
1. How active is their support team in responding to queries. You can check for same by following them on Twitter.
2. Good exchanges tweet all relevant updates on Twitter first.
7. Review on Reddit
1. www.reddit.com/cryptocurrency is the best resource you can check for reviews
8. Hacks
1. Has the exchange been hacked recently?
2. Do check – How robust are their security protocols
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