Buying cryptocurrency should be straightforward if the market hopes to be highly adopted.
In the future, someone should be able to give a person who owns cryptocurrency some cash in return for cryptocurrency. Presently, the chances of finding a person willing to do so is fairly slim. This is where cryptocurrency exchanges come in.
The whole point of a cryptocurrency exchange is to convert quickly and easily between different currencies. It could be from fiat currency to cryptocurrency, or even cryptocurrency to another cryptocurrency. But for anyone hopping on to cryptocurrencies, starting from fiat currency to cryptocurrency is the way to go. Quite literally, what these exchanges do is replace your cash with cryptocurrency. However, as is true with many things, different exchanges have different features and advantages, and it is important to choose a preferred exchange wisely.
Factors to Consider when Choosing a Cryptocurrency Exchange
Location. Different countries have different regulations. Naturally, the exchanges in your local area should follow the regulations set out in your country. This will also help you in the long run should you run into any legal issues.
Available coins. The exchange must have the cryptocurrency you want to convert into. While most exchanges offer Bitcoin and Ethereum, other lesser known coins or altcoins are not as common. Also, take note if the exchange accepts fiat currency or just cryptocurrency as payment.
Security. Exchanges generally hold two things: personal information (for government compliance) and money. If any of these were to be stolen, the trust of the exchange would be lost, which is bad. It is important to find an exchange that will secure your information and money from potential hackers.
Trading fees. Needless to say, reasonable trading fees are highly sought after in an exchange. For traders, it helps maximize profit margins, and for everyone else, it helps keep the costs down. This is one of the key points to look for in an exchange.
Support. One of the more overlooked factors is great customer support which goes a long way to alleviate the concerns of users. If there are any issues related to the exchange, it should be easy to have problems resolved in a timely manner.
Ease of use. If a tool is easy to use, then it follows that a task will be easier to complete. This holds true for cryptocurrency exchanges. An exchange doesn’t have to be convoluted or packed with unnecessary features. What it needs is to make buying cryptocurrency as simple as possible.
Prior to the actual buying process, you need to register on the exchange (i.e. supplying them your personal details as part of government compliance). It may take some time for the exchange to validate your identity, so don’t expect to buy cryptocurrency immediately when you set up an account. After your account has been verified, you must deposit fiat money (i.e. US Dollar or Japanese Yen) into the exchange. This could be through your debit card, bank, or other methods of payment like PayPal. After receiving your money, the exchange will allow you to trade your money for cryptocurrency.
Further reading: What you Should Know about Custodial vs Non-Custodial Exchanges