Since cryptocurrency first appeared, an abundance of exchange platforms has been created to facilitate the transfer of digital coins such as Bitcoin, Ethereum and other altcoins. Cryptocurrency exchanges are online platforms that allow you to buy, sell or trade in digital blockchain currencies.
Although they perform similar services, cryptocurrency exchanges vary in terms of the level of privacy and security that they offer, as well as their costs and overall structure. Depending on the model of the exchange you use, you may use fiat currencies such as the US dollar to exchange for cryptocurrency, or be limited to exchanging cryptocurrencies for other cryptocurrencies. We mark the best cryptocurrency exchanges that are currently available.
How is a Cryptocurrency Exchange different from peer-to-peer models?
There are different types of online exchanges. The first is the traditional trade show, which works just like a traditional trade show. With a traditional stock market, the platform acts as an intermediary to facilitate transactions based on the current market price. These platforms usually support themselves through small costs, taking a percentage of each transaction. With a standard grant you do not know who you are trading with; the exchange suits you and acts as an intermediary, making the exchange anonymous.
Direct trade fairs or peer-to-peer networks allow direct transfer between buyers and sellers. In these networks, individuals agree their own prices, regardless of the current market value. In a peer-to-peer model, you generally have some information about the person you deal with; you may know their wallet address, public ID, username, or even meet them in person.
Peer-to-peer online platforms simply offer an online space to meet other crypto owners and arrange or arrange transactions. In a peer-to-peer trade, trust is very important and is often determined by the trader's history. Peer-to-peer transactions are less anonymous, but they also do not require that you provide your personal information to a centralized company and these can be fast, inexpensive options.
Best peer-to-peer cryptocurrency option
The most well-known and popular option for peer-to-peer crypto trading is the Cash app. The Cash app is made by Squaresoft. With the Cash app it is very easy to buy bitcoin and other cryptocurrency and use it to pay for goods and services.
Probably the best feature of the Cash app is that you can buy bitcoin without paying trading costs. You can also use the app to pay people in regular dollars, similar to Venmo, Paypal and other payment apps. The Cash app is available on Apple and Android phones.
What are some risks of an exchange?
Because cryptocurrency and the surrounding technology are relatively new, the legislation that protects and regulates their exchange has not yet stabilized. Online platforms operate in a new, digitized wild west in which the majority of the risk is borne by consumers instead of platforms. Security is the most notorious risk factor. Since 2009, nearly $ 4 billion in cryptocurrency has been stolen from online platforms; the majority of these coins cannot be recovered and many consumers do not yet have to compensate for their losses due to these incidents.
In addition to the danger that a hacker can pose, the stock exchanges are companies and they can go bankrupt without warning. Some have tried to artificially inflate their published number of daily transactions to manipulate or unexpectedly close their ranking, taking the consumer currency with them. Given the current uncertain climate regarding government regulation around the world, regulation can also be a potential risk factor; Unlike the blockchain, stock exchanges have specific geographical locations and are more easily subject to local legislation.
Some analysts believe that the fall in coin prices in early 2018 is partly due to the fact that world governments are blocking the trade in cryptocurrency. The prices of coins are extremely volatile and susceptible to flash accidents; if the stock exchange platform drops during a price shock, or is too slow, traders can be stuck for hours or days in the currency they want to sell. Unlike stock markets, which are closely regulated, digital currency exchanges are not required to stop trading during price fluctuations.
In all these cases, exchanges are often subject to ambiguous laws that do not reliably benefit consumers. Some of the problems that are avoided by the decentralization of cryptocurrency are therefore reflected in stock exchanges.
Is there a safe way for me to protect my cryptocurrency in an Exchange?
Simply put, you do not have to keep many of your coins in exchange if you do not trade actively. They are trading platforms, not banks. Move your coins from the stock exchange and in your own wallet as soon as you can / when you do not actively trade them. Spending your hard-earned cryptocurrency in the real world is easy with the right wallet.
When you use an exchange, you must carefully choose your platform and consider decentralized options or peer-to-peer blockchain-verified transactions instead of the more user-friendly platforms. The pros and cons of some of the most popular and trusted direct and traditional scholarships currently in use are described below.
Top Cryptocurrency exchanges
We give a brief overview of the best scholarships. We will periodically expand this list to reflect market changes.
Coinbase
Coinbase is by far the best known of the stock market-like trading platforms. It requires US credit cards and bank transfers and you can exchange USD or cryptocurrency for Bitcoin, Litecoin, Ethereum and Bitcoin Cash via the platform. It charges a small fee per transaction (varies depending on the currency, but currently 1.5% for Bitcoin sales and 0.25% for transfers).
The most common criticism of Coinbase is that it invades the privacy of its users, something many crypto enthusiasts don't like. Trading on Coinbase requires an account registered with important personal financial information. It can keep track of how you use "their" coins and has closed accounts in the past that are involved in a variety of transactions, including illegal / darknet exchange, but also potentially more random reasons. It also has ambiguous links with the banking sector and is under attack because of its relatively "institutionalized" motives.
However, these features also make it less vulnerable to shutdowns from the government, and its security functions are robust; only 2% of its coin ownership is simultaneously exposed to the internet and it insures Bitcoin stored on the platform against theft for up to $ 250,000 USD. The more advanced functions, such as GDAX, are designed for experienced traders, but the basic functions have the most user-friendly interface of any platform and the user interface is very easy to set up and use. For this reason it is often recommended for beginners.
Kraken
Kraken was another early platform, established in 2011. This allows you to buy / sell / trade in Bitcoin, Litecoin, Dogecoin, Ripple, Stellar / Lumens, Monero, Ethereum and many others. It supports many currency pairs (for example, USD with Ripple, Monero with Yen, etc.) and supports more fiat currencies than Coinbase. It requires credit card and bank transfers from fiat currency and costs considerably lower transaction and down payment costs than Coinabse. In general, it has a great reputation in the cryptocommunity.
Kraken's global reach is better than Coinbase and offers a number of trading functions, including margin trading. Although the platform is much more robust, it is also confusing and counter-intuitive. There is no mobile support, the website can be slow in processing transactions and their customer service has a mixed reputation. In short, Kraken is a good option for experienced traders, especially those who operate outside the US, but is not so good for beginners.
Poloniex
Poliniex is an American company and has one of the highest trading volumes of all stock exchanges. It supports margin trading and allows transactions of more than 90 pairs. However, it does not accept fiat currencies. To use this exchange, you must purchase Bitcoin or other cryptocurrencies elsewhere and then transfer them to a wallet on the platform. The user interface is simple, but relatively simple. The costs are very low (less than 0.25%) and it has an excellent security reputation and history.
However, their customer service is notoriously bad; there are anecdotal examples of support tickets that wait 90 days or more. Withdrawing money can also be difficult with Poloniex; some have waited months to do this. Their terms of service also prohibit class action lawsuits against the platform and give them the unilateral option to terminate your account for any reason.
Privacy is also a concern; they use a layered approach where each 'trade level' requires that you provide more personal information. The more you want to trade, the more information you need to disclose. If low costs are your priority, this may be an option, but Kraken offers a similar service with a better reputation of the community.
Bittrex
Bittrex is another crypto-only platform (no fiat currencies). It charges slightly higher costs than Kraken, especially with larger transactions. Bittrex has repeatedly been the target of phishers trying to get login information, but has restored its reputation and aggressively invested in security measures.
Just like Coinbase, most of its funds are kept offline, it increases its security and has an excellent reputation in customer service, partly because the company is trying to restore its image. It does not have a mobile app and is less beginner-friendly than Coinbase, but also offers considerably more currencies (more than 190, compared to the 4 of Coinbase).
Many novice users purchase Bitcoin with Coinbase and then migrate their property to Bittrex to use the more advanced features after they have more experience. The reputation of the community is similar to Kraken; it is slightly more expensive with large transactions, but also offers a smoother user interface.
shapeshift
Finally, Shapeshift is another crypto-only platform, but unlike the traditional stock exchanges on this list, you can immediately start trading without an account. The process is decentralized. It has low entry barriers for new coins, which means that altcoins are often available on Shapeshift before they appear on larger exchanges. It offers fast, reasonably priced exchanges between users and is fairly beginner-friendly. It has an (albeit average) mobile app and supports limited payment options and tools.
Because his transactions are peer-to-peer rather than centrally mediated, it is more vulnerable to user errors; some have reported losing money on failed transactions. However, their customer service is responsive and has a relatively good reputation. For experienced fans of the underground, peer-to-peer aspects of cryptocurrency, or for those looking for a quick, inexpensive option, Shapeshift can be a great alternative to traditional exchanges.
Final thoughts
There are hundreds of platform options out there; This list contains scratches on the surface of the most popular, reputable options. For beginners, Coinbase is the most popular option, and it is a very user-friendly, simple option. For those looking for more anonymity, Shapeshift may be a better option, and Bittrex and Kraken both offer solid alternatives for those looking for low costs and more advanced trading options such as margin trading.
Although these platforms are relatively safe, every internet-based platform offers a small risk. Whichever option you choose, make sure you carefully examine the reputation of the community, the terms and conditions, the security record and the features. Save your cryptocurrency wherever possible in a secure, offline location.