Choosing a Crypto Exchange: What You Should Do

A cryptocurrency exchange is a trading platform where virtual currency assets are traded or converted to fiat currencies.

There are over 600 exchange services on the Internet. Therefore, it is difficult for a novice trader to choose a reliable company. We offer you our own set of rules on how to find the safest crypto exchange.

Opt for Decentralized Services

Decentralized services are provided by DEXs (decentralized exchanges). A DEX carries out the exchange of crypto between users without storing their funds. The exchange is managed by a smart contract, a special program in the blockchain that ensures the transaction and its reliability.

A decentralized exchange does not require a deposit — you connect your crypto wallet and exchange cryptocurrencies directly with other users. Such services are known for 100% anonymity, low fees, and fast transactions.

Prefer Cold Wallets Instead of Custodial Wallet Services

If you have a bank deposit, you can easily imagine what a custodial wallet is. You keep funds in a financial institution and receive additional services for:

• Ability to conduct transactions;
• Receive income in the form of interest.

The fundamental difference between cold and custodial wallets is that when using the former, not only do you have private API keys, but also custody. Therefore, it is recommended to store all your assets in cold wallets.

Check Safety Measures Thoroughly

Every platform wants its users to be safe. But how to assure them that a particular platform is secure enough? Of course, by applying as many safety measures as possible.

So, all you have to do is to check what opportunities are out there. Look for:

• Two-factor authentication (2FA). Each time the user enters the account, in addition to the password, they will enter a password code that comes to their mobile phone and is updated every 30 seconds.
• Anti-phishing password. Eliminates the possibility of transferring personal data to fraudsters by the user themselves. After connecting it, each email from the exchange will have an alphanumeric password. In this way, you can determine whether this letter is “original” or was sent by scammers.
• White lists. The white list is a set of addresses to which funds can be withdrawn.

Also, you can check which security protocols are implemented on the exchange’s side.

Make Sure There Were no Breaches or Leaks

One more way to check if the platform is worth your attention is to analyze its past activities. Search for some news on the web and read as many articles as you can find. Check whether the chosen website was subject to various exploits, breaches, or data leaks.

Of course, almost half of the current trading providers were hacked at some point. We advise you to check how the company sorted everything out, what compensation their clients got, and so on.

Read Other Users’ Reviews

Reviews serve as a great driver to speed up the decision-making of new users. They are ways to remove all unnecessary prejudices and increase the credibility of an exchange.

Comments from other participants provide social proof to potential customers. They make a brand credible and provide valuable feedback from the people who know the product or service best — the customers.

Thus, you can not only find what people love and hate about the service but also the answers to your own questions. You will see if there are problems with funds withdrawing, buying limits, or account blocking.

Summing It Up

Whether you want to compare BCH vs BTC or exchange BTC for ETH, you should decide on the most suitable and reliable platform. Our brief step-by-step guide should come in handy. The mentioned tips won’t take much time, but you’ll be 100% sure you have picked the right service.

Remember that safety is the #1 priority in this ever-changing crypto market!