There are many to choose from, so knowing which one to turn to can be confusing. We have set up a guide for you which is designed to help break down the features that you should be looking for in your chosen exchange.
Ultimately, you will be investing your funds into Bitcoin, and the exchange in which you buy them from, so it is important that you are choosing the right one for you. Our checklist has been designed to help you come to the right decision, without forgetting about anything. Although, you should always do your own research first, as exchanges will likely change based on the market itself and the exchange rate.
To help get you started, these are just some things you should be considering:
Where the exchange is located.
It is important to know what country the exchange that you are looking at is based out of, as you may find that laws and regulations can change dramatically from country to country.
It is much more advisable to buy your Bitcoin from an exchange that is based in your own country.
Whether you choose an exchange that is based in your own country or not, it pays to always read the fine print carefully, as there may be some currencies that are not accepted. This is particularly important if you are looking to trade in multiple currencies.
How the Bitcoins can be purchased and any exchange fees.
Before you commit to any exchange, it is important to determine how you can pay for your Bitcoins, and whether this is convenient to you. There are a number of possibilities, including wire transfer, cash, credit cards and PayPal just to name a few. It is important to find one that suits you best.
Pay close attention to the privacy levels as well, as some forms of payment will be more private than others. Credit cards are likely to be the least private way to purchase Bitcoins, so bear this in mind if you were considering using that as a form of payment.
Different exchanges will also charge different exchange fees, so it is important to look around and find an exchange where the fees are a reasonable amount, and are not overpriced compared to the rest of the market. It is also important to note that the fees can change overtime, and can vary drastically. It is worth checking to see whether your chosen exchange charges additional fees on top of Bitcoin transaction fees.
How quickly will you receive your Bitcoins?
Something that is very important to research prior to picking your Bitcoin exchange is how quickly you will receive your currency. Although the time frame might not bother you, it is worth knowing, so you can flag up any problems should they arise.
Check to see if your exchange offers a ‘locked in’ price. This means that the price, in which you buy your Bitcoins at, is the price that you will actually be charged; even if the Bitcoins take a few days to arrive, giving time for the price to change. It is best to find all of this out prior to signing up to an exchange, so you can be prepared. The Bitcoin exchange software in the exchange websites can do the quick transactions of fiat to bitcoin. The trading platforms have been now upgrading with the AI technology which it can automatically matches your trade.
Before committing to any exchange, it is important to decide whether anonymity is important to you or not.
Although complete anonymity is very difficult, there are a number of different things that you can check that will help to protect you. Make sure the exchange that you choose follow both the Know Your Customer (KYC) and Anti-Money Laundering (AML) laws in your own country. Although these will ultimately protect you in the long run, it does mean that some identity information will have to be sent to them before you can purchase any Bitcoins.
Preventing and avoiding fraud should be at the front of your mind all the time you are making decisions about the Bitcoin exchange. We will go into more detail on how you can prevent being a victim of fraud later on.
How secure is the exchange?
If you are only going to research one thing, it should be how secure the exchange is. It is not something that should be overlooked at all. Firstly, check that the web address is secure. If it has HTTP it is not secure. It must have HTTPS. If it is not secured, do not consider it, as it is too much of a risk.
Other factors worth checking are if the exchange offers secure log in, as well as a two-step authentication.
If you are not happy with the security features of an exchange, do not sign up to the exchange. Trust your instinct, and keep your money safe.
Has the exchange got a good reputation?
One of the most important things that you can do when it comes to choosing an exchange is to listen to what others are saying about it. Reputation and word of mouth are one of the most reliable pieces of feedback that you can get.
If you have not heard much about the exchange that you are looking, visit some internet forums and ask questions and get feedback. It is a great way to get an honest review about what to look for and might help influence your decision.