Whenever there is huge and an unrelenting demand for a product there is bound to be a few astute people or groups of people who are quick to exploit that climate to provide the demanded product. The cryptocurrency industry has quite exploded into the mainstream and unlike before, it is fairly easy to get your hands on them in contrast the early days when buying a few Bitcoin was a nightmare of its own. This is where cryptocurrency exchanges come to play, and they are the subject of our piece today.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange can be simply defined using the classic example of our everyday moneychangers. These are organizations and companies spread all over the world, which are ready to exchange your fiat many for a cryptocurrency of your choice at an agreed rate. The main difference between a cryptocurrency and a moneychanger is that the cryptocurrency exchange, exclusively deals with the various kinds of virtual money instead money from different countries against one another.
Types of Exchanges
Broadly speaking there are two main categories of cryptocurrency exchanges, namely:
- Online Exchanges: These are what constitute the majority of the cryptocurrency exchange industry due to their expanded reach. They are exchanges that are hosted in certain countries or regions of the world but whose services are delivered online to a specific number of countries and in some cases to a worldwide audience. The main draw of online cryptocurrency exchanges is the relative ease with which a buyer can purchase their cryptocurrency, with a wide range of payment options from Credit Cards to Bank Transfers
- Offline Exchanges: As the name implies these are cryptocurrency exchanges that run their services completely offline, with their sites only being a showroom rather than a functional transactional portal. Offline Exchanges are walk-in only exchanges where the customer has to physically present themselves before they are sold the digital cash. Offline exchanges have a crucial advantage over online exchanges, in that they are considered much safer from hacks or cyber intrusion, and are ideal for big volume cryptocurrency buyers.
What Makes a Great Cryptocurrency Exchange?
There is a huge competition amongst cryptocurrencies and their exchanges as well, and choosing the right exchange that will work for you might be a bit tasking. However there are a few things to watch out for, some of which are:
Registration Process: Cryptocurrency exchanges differ from one another in the length and difficulty a buyer goes through before registering, and getting verified to begin buying their crypto holdings. This should be a major consideration as you choose an exchange
Means of Payment: Although advancement in verification technology has meant that most cryptocurrency exchanges accept credit card payments, there are wide variations in the volumes each cryptocurrency exchange allows for purchase using a credit or debit card. If you are a high volume and recurring buyer, it will help to choose an exchange that will effectively cater for this need.
Security Features: Most of the cryptocurrency exchanges claim they are highly secure, but the experience with a lot of them shows that not all are immune to hacks. In order to choose the best exchange, check on its reputation and modes of storage, as exchanges like Coinbase store their holdings in completely offline vaults which among the reasons it’s among the most reputable ones.