What is a cryptocurrency exchange?
Cryptocurrency exchanges are websites where you able to buy, sell or exchange cryptocurrencies for other traditional currency or digital currency like US dollars or Euro. For those that wish to trade professionally and have this access to fancy trading tools, you will probably need to use an exchange that needs you to confirm your ID and open an account. Also, if you just want to create the occasional, straightforward trade, there are also platforms that you may use that do not need an account.
Types of exchanges
- Trading Platforms – These are websites that connect sellers and the buyers and take a fee from each transaction.
- Direct Trading – These platforms provide direct person to person trading where individuals from dissimilar countries can exchange currency. Direct trading exchanges do not have a fixed market price, instead, each seller creates their own exchange rate.
- Brokers – These are websites that everyone can visit to procure cryptocurrencies at a price set up by the broker. Cryptocurrency brokers are the same to foreign exchange dealers.
What to look out for before joining an exchange
It is significant to do a little homework before you begin trading. Here are a few things you should analyze or check before creating your first trade.
- Reputation – The best way to find out about an exchange is to look through reviews from each users and prominent industry websites. You can really ask any questions you might have on open forums such as BitcoinTalk or Reddit.
- Fees – A lot of exchanges should have fee-related details or information on their websites. Before you decide to join, make sure you understand deposit, transaction and withdrawal fees. Fees can vary substantially depending on the exchange you utilize.
- Payment Methods – What are the payment procedures obtainable on the exchange? Credit & debit card? Or wire transfer? PayPal? If an exchange has limited payment choices then it may not be comfortable for you to use it. Remember that buying cryptocurrencies with a credit card will constantly need identity verification and along with a premium price as there is a higher risk of fraud and higher transaction and processing fees as well. Purchasing cryptocurrency by way of wire transfer will take importantly longer as it takes time for banks to process.
- Verification Requirements – The extensive majority of the Bitcoin trading platforms both in the US and the UK demand some sort of ID verification in order to create deposits & withdrawals. Some exchanges will allow you to stay anonymous. Although verification, which can last up to a few days, might seem like a pain, it secures the exchange against all kinds of scams and money laundering.
- Geographical Restrictions – Some particular user functions produced by exchanges are only accessible from specific countries. You need to make sure the exchange you want to join permits full access to all platform tools and functions in the country you presently live in.
- Exchange Rate – dissimilar exchanges have dissimilar rates. You will be truly surprised how much you may save if you shop around. It is not unusual for rates to fluctuate up to 10% and even higher in some instances.
The Best Cryptocurrency Exchanges
Nowadays there are a host of platforms to select from, but not all exchanges are made equal. This list is based on user reviews as well as a host of other criteria such as user-friendliness, accessibility, fees, and security. Here are 10 of the best crypto exchanges in no specific order.
Backed by the trusted investors and utilized by millions of customers across the globe, Coinbase is one of the most prominent and well-known brokers and trading platforms around the world. The Coinbase platform makes it simple to securely procure, use, keep and trade digital currency. Users can purchase bitcoins, Ether and now Litecoin from Coinbase by way of a digital wallet obtainable on Android & iPhone or by way of trading with other users on the company’s Global Digital Asset Exchange (GDAX) subsidiary. GDAX presently operates in the US, Europe, UK, Canada, Australia and Singapore. GDAX does not presently charge any fees for transferring funds between your Coinbase account and GDAX account. As of now, the variety of tradable currencies will, however, depend on the country you live in. Check out the Coinbase FAQ and GDAX FAQ
- Pros: Great reputation, beginner friendly, reasonable fees, security, stored currency is covered by Coinbase insurance.
- Cons: Has customer support, limited countries supported, limited payments methods, non-uniform rollout of services worldwide, GDAX acceptable for technical traders only.
Founded in 2011, Kraken is the biggest Bitcoin exchange in euro volume and liquidity and is a partner in the first cryptocurrency bank. Kraken allows you to procure and sell bitcoins and trade between bitcoins and euros, US Dollars, Canadian Dollars, British Pounds and Japanese Yen. It is also possible to trade digital currencies other than Bitcoin such as Ethereum, Monero, Ethereum Classic, Augur REP tokens, ICONOMI, Zcash, Litecoin, Dogecoin, Ripple and Stellar/Lumens. For more knowledgeable users, Kraken provides margin trading and a host of other trading features. Kraken is an excellent choice for more knowledgeable traders. Check out the Kraken FAQ
- Pros: Great reputation, low transaction fees, decent exchange rates, minimal deposit fees, feature rich, great user support, secure, supported worldwide.
- Cons: Limited payment methods, not appropriate for beginners, unintuitive user interface.
Cex.io produces a broad range of services for utilizing bitcoin and other cryptocurrencies. The platform allows the users simply trade fiat money with cryptocurrencies and conversely cryptocurrencies for fiat money. For those who are searching to trade bitcoins professionally, the platform provides personalized and user-friendly trading dashboards and margin trading. Alternatively, CEX also provides a brokerage service which offers novice traders an exceptionally easy way to buy bitcoin at prices that are more or less in line with the market rate. The Cex.io website is safety and intuitive and cryptocurrencies can be kept in safe cold storage. Check out the Cex.io FAQ
- Pros: Great reputation, support credit cards, good mobile product, beginner friendly, decent exchange rate, supported worldwide.
- Cons: Average customer support, drawn out verification process, depositing is expensive.
ShapeShift is the leading exchange that supports a variation of cryptocurrencies including Bitcoin, Ethereum, Monero, Zcash, Dash, Dogecoin and a lot more. Shapeshift is really good for those who need to create quick straightforward trades without signing up to an account or relying on a platform to hold their funds. ShapeShift does not permit users to purchase crypto’s with debit cards, credit cards or any other payment system. The platform has a no fiat policy and only permits for the exchange between bitcoin and the other supported cryptocurrencies. Visit the Shapeshift FAQ
- Pros: Great reputation, fast, fairly good prices, Dozens of Crypto’s available for exchange, beginner friendly.
- Cons: Average mobile app, no fiat currencies, limited payment options and tools.
Founded in 2014, Poloniex is one of the world’s prime cryptocurrency exchanges. The exchange provides a safety trading environment with more than 100 different Bitcoin cryptocurrency pairings and advanced tools and data analysis for advanced traders. As one of the most well liked trading platforms with the highest trading capacity or volumes, users will always be able to close a trade position. Poloniex employs a volume-tiered, maker-taker fee schedule for all trades so fees are dissimilar depending on if you are the maker or the taker. For makers, fees span from 0 to 0.15 percent, depending on the amount traded.
For takers, fees range from 0.10 to 0.25%. There are no fees for withdrawals beyond the transaction fee needed or demand by the network. One of the distinctive tools on the Poloniex platform is their chat box which is constantly filled with user help and just about anything and everything. Any user can write almost anything but improper comments are sometimes deleted by moderators. It can sometimes be hard to recognize the good advice from the bad, but the Chatbox is an excellent tool that will keep you engaged.
- Pros: Feature rich, fast account creation, BTC lending, high volume trading, user-friendly, low trading fees, open API.
- Cons: Slow customer service, no fiat support.
Bitstamp is a European Union site bitcoin market, it was founded in 2011. The platform is one of the first generation bitcoin exchanges that have built up a loyal customer base. Bitstamp is popular and truly trusted throughout the bitcoin community as a secure platform. It provides advanced protection features such as two-step authentication, multisig technology for its wallet and completely secured or insured cold storage. Bitstamp has 24/7 support and a multilingual user interface and getting started is relatively simple. After opening a free account and creating a deposit, users can begin trading instantly. See the Bitstamp FAQ and the Fee Schedule
- Pros: Great reputation, worldwide availability, high-level security, low transaction fees, good for large transactions.
- Cons: Limited payments methods, not beginner-friendly, high deposit fees, user interface.
CoinMama is a veteran broker platform that everyone can visit to procure bitcoin or Ether using your credit card or cash by way of MoneyGram and the Western Union. CoinMama is great for those individuals who wish to create quick straightforward purchases of digital currency utilizing their local currency. Although the CoinMama service is obtainable around the world, users should know that some countries may not be able to use all the functions of the said site. CoinMama is obtainable in English, German, French, Italian and Russian. Check out the CoinMama FAQ
- Pros: Good reputation, beginner-friendly, great user interface, good range of payment options, available worldwide, fast transaction time.
- Cons: A premium fee for credit card, high exchange rates, no bitcoin sell function, average user support.
Bitsquare is a user-friendly peer to peer exchange that lets you procure and sell bitcoins in exchange for fiat currencies or cryptocurrencies. Bitsquare promotes itself as a really decentralized and peer to peer exchange that is quickly accessible and needs no need for registration or reliance on a central authority. Bitsquare never keeps user funds and no one unless trading partners exchange personal data. The platform provides great protection with multisig addresses, security deposits and purpose built arbitrator system in case of trade disputes. If you want to stay anonymous and do not trust anyone, Bitsquare is the right platform for you. Check out the Bitsquare FAQ
- Pros: Great reputation, it is great for advance traders, open source, decent fees, no sign-up, secure & private, a vast amount of cryptocurrencies available, available worldwide.
- Cons: Limited payment options, average customer support, not beginner friendly.
LocalBitcoin is a P2P Bitcoin exchange with sellers and buyers as well in thousands of cities across the globe. With LocalBitcoins, you can meet up with people in your local area and purchase or sell bitcoins in cash, send money through PayPal, Skrill or Dwolla or arrange to deposit cash at a bank branch. LocalBitcoins only receive a commission of 1% from the sellers who set their own exchange rates. To make sure trading is safety, LocalBitcoins gets a number of precautions. To begin with, the platform rates every trader with a publicly displays past activities and reputation rank. Also, once a trade is requested, the money is held on LocalBitcoins’ escrow service. After the seller verifies the trade is done the funds are released. If something does appear to go wrong, LocalBitcoins has a support team and conflict resolution team to resolve conflicts between buyers and sellers. Check out LocalBitcoins FAQ
- Pros: Available across the globe, beginner friendly, no ID needed, usually free, instant transfers.
- Cons: Hard to buy large amounts of bitcoin, high exchanges rates.
Co-founded by Tyler and Cameron Winklevoss, Gemini is a completely regulated licensed US Bitcoin and Ether exchange. That means Gemini’s capital requirements and regulatory standards are the same to a bank. Also, all US dollar deposits are held at a FDIC-insured bank and the majority of digital currency is held in cold storage. Gemini exchanges in 3 currencies, US dollars, bitcoin, and ether, so the platform does not serve exchangers of the plethora of other cryptocurrencies. The exchange operates by way of a maker-taker fee schedule with discounts obtainable for high volume traders. Remember, all deposits and withdrawals are free of charge. The platform is only completely obtainable to customers in 42 US states, Canada, Hong Kong, Japan, Singapore, South Korea and in the UK.
Check out Gemini’s FAQ
- Pros: Slick/minimalistic and user-friendly design, Security and Compliance, great analytics, high liquidity.
- Cons: Limited currencies, small community, average customer support, limited worldwide availability, no margin trading.