Cryptocurrency is rising in popularity more and more. New digital currencies keep popping up on a daily basis, and the platforms where users can exchange cryptocurrencies are doubling at a startling rate.
Some trading platforms use a peer-to-peer model, enabling direct exchanges among users within clearly set terms. This process may be quite suitable for one-off transactions but certainly not the fit for long-term trading, mostly due to the scarce selection of cryptocurrencies because often a user’s choices are comprised of only Bitcoin and Ethereum. Consequently, as the cryptocurrency market advances and gets more massive, more users see the value of using of popular and reliable cryptocurrency exchange platforms for their continuing transactions.
Of course, there are also certain risks to making transactions on a cryptocurrency trading platform such as loss of funds, hacks, and scams. Currently, a majority of cryptocurrency trading platforms do not offer users much protection and security with regards to their funds, which raises the risk of them losing their assets. So, the safekeeping of your funds is an essential aspect you should keep in mind while selecting a trading platform.
Even if you can make transactions anonymously, you need to keep in mind that cryptocurrency exchange platforms operate in adherence to the regulations of their country. So it is worth noting that even if you choose a platform that offers you anonymity, you may still be required to divulge some personal information to exchange cryptocurrencies and withdraw funds. Moreover, a growing number of governments are gearing up to put in place a more structured regulatory system in the exchange of cryptocurrencies.
5 Rules for Choosing a Cryptocurrency Exchange Platform
#1 Don’t ignore security
When a trading platform provides its users with deals that are almost too good to be true, it is usually only because they cut corners on data security. But inexpensive fees will not keep your funds protected from a hack.
#2 Make sure the platform is well-reputed
The risk of fraudulent activities is lower on larger, more popular trading platforms. If you are interested in a smaller trading platform, make sure you do your research and read user reviews.
#3 Be aware of what’s happening
Following the news and updates is also paramount because learning about a hack or scam promptly can give you a chance to take out your funds from the trading platform before it’s too late.
#4 Be familiar with country restrictions
Some countries like China are readying to monitor cryptocurrency exchanges with strict regulations, which can be restrictive for some users.
#5 Pinpoint your trading preferences
Trading fees and withdrawal terms differ according to exchange volume and the number of cryptocurrency pairings, meaning it may serve you well to begin trading with a clear idea of what and how much you want to trade.
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Posted on May 22, 2023