Why is it worth verifying the cryptocurrency exchange before investing?

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Several thousand cryptocurrencies are already available on the market, and more and more are added every month. Hence, people uninitiated into the meanders of the digital currency industry who want to try their hand at investing have several tasks ahead of them. Including one priority: choosing the optimal cryptocurrency exchange for paying your funds. So, where to buy cryptocurrencies safely?

Safe cryptocurrency exchange – what should you remember?

Firstly, the investor, regardless of his experience, must be aware of fraud and actions to the detriment of consumers, which unfortunately are a reality in this industry. It also does not apply to the biggest players on the market. Suffice it to mention Mt. Gox. At its peak, this exchange managed about 70% of transactions using bitcoin, and finally collapsed in 2014 due to accusations of theft of BTC worth hundreds of millions of US dollars.

So, how can you be sure that a given cryptocurrency exchange is actually, let us use this word, “legit”? Correct and verified exchanges should have nothing to hide. Only transparently conducted activities will give users the feeling that they are not dealing with a scam, but with a legally run business. In addition (unfortunately, this is not a standard), it would be good if there was a possibility to contact a physical employee of the exchange by phone/e-mail (as in the case of Kanga Exchange). Too many entities of this type rely only on consulting bots, capable of answering only questions predetermined by the operator.

Where to safely buy cryptocurrencies? Do your research!

Secondly, in the case of exchanges and digital currencies themselves, reputation is a key factor. Before creating an account on the exchange (this process, as it involves the transfer of private data by the user, is in itself a proof of trust in such an entity), it is crucial to spend time on research. In other words, verify both the exchange and the opinions of people using its services.

What is the idea behind its owners/owner? Does it have the right tools to protect users? What is its history, including ups and downs?

Even the safest cryptocurrency exchanges do not protect 100% against loss of funds

Thirdly, it’s time for a controversial opinion. The more “difficulties” you encounter when creating an account on a given exchange, the better it shows. This is a manifestation of the use of solutions aimed at securing the funds of current and future investors using a given stock exchange in the best possible way. Suppose your equity disappears from your account, in which case it will be easier to determine what happened to them.

Nevertheless, apart from the selected operator, it is optimal to keep at least some money for the so-called. cold wallet. This device allows you to deposit cryptocurrencies without having to connect it to the Internet.

Cryptocurrency exchange and the issue of currency pairs and commissions

Fourthly, commission fees and available currency pairs are among the main distinguishing factors of cryptocurrency exchanges.

An important note before we proceed: the vast majority of exchanges charge fees for user transactions. These may depend on the size of the transaction, but in some cases the amount of the commission has nothing to do with this factor.

Before investing, it is good to find out what style of investing would interest us the most. If we plan to do it often, but for small amounts, we can count on lower commission fees. When considering buying or trading ETH, there is a gas fee to consider.

When it comes to pairs, exchanges differ in terms of their availability. Just look at Coinbase, an exchange valued for its security but devoid of a more diverse range of currency pairs. It is therefore worth doing some research and answering the question: how our investment practices will be reflected in the opportunities offered by the exchange operator.

Cryptocurrency exchange – why do people use it?

Both novice and advanced investors simply need a platform that offers them tools to easily buy and sell cryptocurrencies. They are also places where, thanks to the technology used, they enable safe storage of digital resources. However, it should still be borne in mind that exchanges are among the targets of hacking attacks, so their users should also keep their funds in separate wallets.

Thank you for reading the article! We encourage you to regularly visit our exchange blog for the latest news from the world of cryptocurrencies!

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