How to choose a crypto exchange?

Table of Contents:

Crypto guide for beginners - Part 5 - blog-min

This is the 5th article within Crypto guide for beginners. Read other ones:

What is cryptocurrency and how does it work?,
What is blockchain technology and how does it work?
What is crypto exchange and how does it work?
Crypto exchange: essentials

Modern hype for crypto keeps growing, and it means that more and more people would like to enter the world of crypto. One of the brightest examples is the rumors that China is planning to lift the ban on cryptocurrency issued by the Chinese government in 2021. Even if communists cannot help but admit the growing share of the crypto market existing in the country, then we can only imagine how big is the share of the crypto market in other world economies.

One of the ways to get crypto is to trade it on the crypto exchange. Another way is through the crypto wallet. This post stresses the following topics:

How to choose a crypto exchange?
How is trading within the crypto wallet different from a crypto exchange?

Let’s buckle up and start our journey.

What you should know while choosing a crypto exchange?

1. National jurisdictions

Unfortunately, crypto trading worldwide is still unregulated. Each country has its own rules and ways to interpret what is crypto and its status. That’s why it’s important to make sure that the crypto exchange you would like to operate covers your national jurisdiction. For example, Binance is the largest crypto exchange worldwide. Due to US regulations, access to the Binance crypto exchange is closed for US citizens.

2. Liquidity

The more users the exchange has, the bigger the trading volume is. Higher liquidity is guaranteed by users who hold digital assets and perform frequent trading operations. If these requirements are not met, trading fees could be higher than on other platforms with higher liquidity.

3. Target crypto to trade

Depending on what crypto you are seeking to trade, the choice of a crypto exchange will differ. Higher-market cap crypto can be found on a bigger number of exchanges, namely big exchanges. Smaller crypto exchanges are likely to offer lesser-trading crypto.

4. Platform fees

All crypto exchanges charge users for transactions. Moreover irrespective of the trading pair users have to pay the platform fee in the native crypto of the platform. For example, if you want to exchange ETH into BTC, then you should have BNB (Binance native crypto) on your account or purchase it specifically for the transaction. This means more headache and more fees. Read carefully the terms and conditions of the crypto exchange and make sure it’s suitable for your goals and expectations as a trader.

5. Security check

Security could be an issue for a crypto exchange, especially if we talk about centralized exchanges. Due to its centralized nature, such exchanges have a single point of failure. When cybercriminals hack centralized exchanges, they drain assets from the crypto wallets hosted there. This process is irreversible, users will never return their funds.

Having this in mind, it’s a good idea to check for the safest crypto exchanges, opt for decentralized exchanges, or start using crypto wallets that offer crypto trading on its premises.

Summing up

Crypto exchanges are an important part of web3 enabling users to trade, hunt for new promising crypto, as well as invest in well-known crypto such as Bitcoin or Ethereum. It’s important to take the right steps and choose the crypto exchange you need. However, there are other ways to trade and exchange crypto in web3. Peer-to-peer (P2P) swaps is one of them. Spatium Feeless Wallet is an ideal solution for those who want to protect their assets but are not technically skilled in blockchain intricacies.

Download it for free and expand your knowledge of what a crypto wallet might be. In addition to Feeless crypto transactions, Spatium Wallet will perform P2P swaps in the near future.

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