Bitcoin took the world by storm as the pioneer investors started obtaining early profit from the once obscure form of money preferred by tech geeks. Bitcoin is being discussed everywhere now – in news, TV shows, magazines, podcasts, etc. Even babies are named after the mighty Bitcoin – that’s no joke!
The coin gradually achieves a dominant position in the world of finance, attracting much attention from the public and organizations. People can obtain Bitcoin by performing various kinds of activity: mining, earning, or buying. We are mostly interested in the latter one. So, what does it take to find a reliable exchange and buy Bitcoin there?
Defining a Bitcoin exchange?
Exchanges are service platforms developed for converting cryptocurrencies into fiat money and vice versa. In addition to setting a specific exchange rate, the platform charges a minimal commission for trading services it provides.
As a rule, Bitcoin exchanges deal with different popular cryptocurrencies and not only with Bitcoin. If you want to buy some newly released tokens – it is better to go to altcoin exchanges that have a wider range of cryptocurrencies to offer.
Centralized vs Decentralized exchanges
In contrast to traditional centralized exchanges that require user registration and verification, there are decentralized exchanges that are less demanding and allow for buying/selling cryptocurrencies anonymously. It is more convenient, though bears much risk.
- Usually run by an officially registered company that acts as a middleman between a buyer and a seller;
- Legally compliant with government regulations and possess licenses and certificates required from a money services business;
- Offer a wide range of additional services and tools to facilitate user experience in trading;
- Implement advanced security measures;
- Impose stiff requirements for user verification and authentication;
- Support a limited number of payment options (generally, they include wire transfers, credit cards and cryptocurrency);
- Have a single point of control, and thus are vulnerable to hacks and external attacks.
- Act as a peer-to-peer marketplace with no third parties involved;
- Allow for conducting trading operations between a buyer and a seller directly;
- Do not require the users to disclose their personal information;
- Offer a wide range of payment options (bank transfers, credit cards, PayPal, cash payments, etc.)
- As a rule, involves higher fees and exchange rates;
- Do not guarantee full protection from scammers and fraudsters as it acts as a matching ground for individual traders;
- Offer a limited range of cryptocurrencies for buying/selling;
- Provide lower market liquidity.
How to choose the best Bitcoin exchange
When it comes to deciding on which Bitcoin exchange to use, the investors have hard choices ahead as the industry numbers hundreds of them now. Naturally, it is best to find out what kind of exchange it is (centralized/decentralized) and how it works on your own. Or you may look through our list of criteria that you should pay attention to when searching for the most reliable place to buy Bitcoins from.
- What do you usually do before opting for a marketplace to buy or sell goods at? Correct, you are looking for reviews from friends, colleagues, relatives, etc. With the choice of exchange, this option is also available. Study the crypto-related sites and forums, read reviews about the existing cryptocurrency exchanges and choose one with a good reputation.
- Before buying or selling Bitcoins, look at the amount of commission charged, as the fees among exchanges might differ significantly. Why do you need to pay an additional fee for transactions?
- If the exchange rate within a platform is much higher/lower than that of competitors or an average market rate – do not rush into an ultimate decision. The exchange rate largely depends on the market liquidity of a particular platform. The higher the liquidity – the easier it is to buy and sell Bitcoins.
- Even if you find the exchange that seems to perfectly suit all your purposes, pay attention to the minimum amount allowed for buying and selling Bitcoin at the exchange.
- Last but not the least – mind the geographical location of the exchange and the range of countries covered. Some exchanges are designed to serve only local customers, while others provide their services worldwide. Besides, the regulations imposed on the exchange may vary with the country.
Translating the theory into practice
Now that you know how to choose the exchange for buying and selling Bitcoin, let’s consider a specific platform as an example. We will fix upon one of the well-known and reputable exchanges – CEX.IO – and go through all the points outlined above.
So, CEX.IO is a centralized cryptocurrency exchange, run from London, United Kingdom. The platform has been favoured by investors, traders, and casual customers since 2013. As of today (June 12, 2018), the user base of CEX.IO totals to 2,483,130 active traders. That’s pretty impressive, isn’t it?
Though located in the UK, the company is available for users worldwide, covering a number of states in the USA as well. That said, as an officially registered entity, CEX.IO is fully compliant with the rules and regulations set by the governments and possesses licenses and certificates, proving the legitimacy of their activities.
When it comes to buying or selling Bitcoin, customers are allowed to utilize various acceptable payment methods, which are bank wires, credit cards and SEPA/SWIFT transfers. The commissions will vary with the payment method preferred.
Still, there are trading fees, ranging from 0% to 0.25% (depending on the trade volume), or the instant buy/sell fees, which go as high as 7%. Customers can use either the Trade option or the Buy/Sell functionality to acquire some Bitcoins. As it was mentioned above, many popular Bitcoin exchanges set their minimum amount for buying Bitcoin. With CEX.IO this amount totals to 0.01 BTC. The platform enjoys high liquidity, which is proven by the total 24h trade volume of 501.99 BTC.
Once all the criteria boxes are ticked, you can easily conclude whether the given exchange is worth your attention and money or not. Becoming a Bitcoin owner is a simple task, but it is a lot more complicated to find a reliable Bitcoin exchange to entrust your hard-earned money to.
This is a sponsored press release and does not necessarily reflect the opinions or views held by any employees of NullTX. This is not investment, trading, or gambling advice. Always conduct your own independent research.