A quick search online reveals that there are a number of different cryptocurrency exchanges that you may wish to use. However, it makes sense that you are best to weigh up what each one can offer you as well as to understand the differences with the services that they currently provide. After all, you clearly want everything to run as smoothly as possible at all times as well as getting the best possible exchange rates for your cryptocurrencies.
With so many different coins available it's likely that you'll need to register on more than one exchange, especially if you wish to trade low volume coins.
However, before delving into the best exchanges, a quick explanation is in order.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is an online marketplace whereby you can exchange fiat currencies for various digital currencies, or swap one digital currency for another. However, there are several different types of exchanges to be aware of and the three versions do operate slightly differently from one another.
The first is a trading platform, and this is where buyers and sellers are connected via their platform to then allow a trade to take place. With this version, the cryptocurrency exchange will take a fee with each transaction, so that needs to be factored into the equation when it comes to performing the transaction.
The second version is known as direct trading, and this is something that is not for those just starting out in the world of trading in cryptocurrencies. With this version, you deal direct with the buyer and they can set the price that they wish to sell at. Alternatively, a seller can also state the price that they want to buy at and the platform can then link the two parties together so the trade can be completed.
The third and final version is known as the broker, and this version acts more along the lines of a foreign exchange dealer. With this model, the broker sets the price that they wish to sell at, which is usually the market rate with a small commission added on as their profit. This is perhaps the easiest way to get started in cryptocurrencies, but it is also going to prove to be the most expensive option out there.
How a Cryptocurrency Exchange Works.
So, now that you are familiar with the different versions of cryptocurrency exchanges, you need to know how they work, and this is going to be very straightforward.
First, you need to sign up for an account, and this is going to be quick and easy to do. After you have confirmed your account, you will need to look at adding some funds or a funding source. This could be a Paypal account for some exchanges while others will look at alternative online payments or linking to your bank account via the likes of Visa or Mastercard.
What then follows will depend on the exchange option that you are looking at using. If you are dealing with a broker, then you simply look at the board of digital currencies that are available via that exchange and the current rates. This is identical to the way in which you purchase foreign currency, so if you are familiar with that, then this will run as smooth as possible.
However, if you are using the direct trading option, then you have a couple of options available to you. At the outset, you can state the digital currencies that you are looking at purchasing as well as the rate that you are willing to pay. At that point, you can sit back and wait to see if a trader approaches you or, alternatively, you can go hunting yourself. When you get something that appeals, you are able to complete the trade by exchanging at the agreed rate with both parties.
In other words, a cryptocurrency exchange operates as a marketplace for people to swap one currency for another and do that in a secure manner.
Key Things to Look for in an Exchange.
As was previously stated, there are a number of different exchanges out there so you do need to be careful as to which one you use. To help, there are several key things that you should be looking out for when it comes to making your decision.
The first thing is the reputation of the exchange. If it is busy and well-known, then there is little chance that you are going to run into problems. Look at forums and review websites to help with determining just what kind of reputation it has before you sign up for an account.
You should also be aware of the fees associated with the exchange, and this is information that should be easily found on their website. Do note that there can be fees for funding an account, using it and also withdrawing so make sure that you know in advance what they will charge to then allow you to factor it into your various transactions.
Also, security is going to be a big issue, so it can prove to be useful to see the different forms of identification that will be required even though not all exchanges appear to have the same ideas as to the importance of verification. However, it is advisable to only use those that do want some kind of ID simply because it is going to offer greater protection against the likes of fraud as well as scams.
Finally, do pay attention to the fees and exchange rates that they offer because you can save some money simply by looking into each one independently. You might save yourself in the region of 10% when comparing the fees, and it is always better for that money to stay in your pocket rather than with the exchange.
The Overall View of Cryptocurrency Exchanges.
Just prior to us looking at the best exchanges around, it is worth pointing out that you would be advised to use one of the exchanges listed for the sake of your own security. Two-step verification should be essential and you should never look at using any trading option that doesn’t include that. Also, do your research on the exchange in advance to see who is behind it and the kind of reputation that they have because there are some scam, or potential scam, sites out there.
The Best Cryptocurrency Exchanges Around.
So, keeping everything that has been said above firmly in your mind, we can start to look at the best cryptocurrency exchanges that are in existence and the reasons as to why they should certainly be on your short-list of ones to explore. That is not to say that those exchanges that do not appear below are to be avoided as there are certainly more out there than we can cover at this point, but this is merely offering some guidance that you may wish to follow.
Also, they are not in any kind of preferential list.
Exchange 1: Binance.
The Binance cryptocurrency exchange is relatively new, at least compared to several others in the list, but that does not mean that you should then go ahead and write it off.
However, in a short period of time, this exchange has been able to gain a significant foothold in the market and it is primarily because of the way in which they charge very low fees for the transactions. Also, they offer a total of 48 different coins on their exchange but you can only deposit and withdraw in cryptocurrencies and not fiat currencies.
With this exchange, you have both a basic and advanced option when it comes to the trading aspect. Primarily, the difference between both options is just the ability to study everything in more depth when you are using the advanced method but even the basic screens could be confusing for those just starting out. Upon opening your account, you will be provided with a public wallet and it is advisable to fund it with either Bitcoin or Ethereum rather than one of the other alt-coins that they also deal with.
For the trading part, then you are restricted to using limit and market orders which is rather restrictive for those individuals that are more experienced in trading cryptocurrencies. However, at least they have kept this part simple as opposed to their interface which doesn’t quite match up.
For most, the best part about this exchange is that their fees are exceptionally low. You pay nothing when you deposit, and if you use their own tokens then you pay nothing for the transactions. Also, you get a bonus when you sign up whereby you get a 50% reduction on your fees for the first year which then takes them as low as 0.05% which is pretty impressive.
Overall, Binance has been making waves in the industry, and it is easy to see why. They have 48 different coins available and an ever increasing number of users so there will be ample opportunities to trade at various levels. You do need to get their two-step verification to make full use of their platform but considering that just involves sending in your ID then there is no reason not to. Sign up to Binance here.
Check out our full review on Binance.
Kucoin is a cryptocurrency exchange that pretty much comes across like a brother to Binance as there are various similarities to be found. However, the first thing that strikes you with this exchange is that it is substantially easier to use than Binance making it the perfect exchange for people just starting out with trading.
They also offer their own token as well as shares and a buy-back program. However, you might also want to know that they offer a profit share whereby their fees are spread between those people that own shares, and they are one of the few cryptocurrency exchanges to offer such an opportunity.
Signing up takes just a minute but you do need to then go through the verification part to allow you to really start to trade on their platform. When you do this, you are then shown a nice and plain trading screen that details the various trading pairs that are available. They do cover the key cryptocurrencies and after selecting the appropriate trading pair, you are then able to complete the purchase as and when you want.
Once again, they plan on keeping their fees low as they run at 0.1% depending on the asset that you are trading with. You pay nothing to deposit money into your account and then if you want to withdraw it all depends on the currency in question. The fees for this range from 0% to a fraction of 1%, so they are still not too high compared to other options that are out there.
Overall, Kucoin has been able to simplify the entire cryptocurrency trading experience and with them gaining a significant number of followers, it does also mean that there will be additional options and more ways to trade. If you are just beginning your cryptocurrency journey, then this could prove to be the ideal exchange for you.
Sign up to Kucoin here.
Coinbase claims that it has over 10 millions users on their database, so it is reasonable to assume that their interface and exchange must be running smoothly in order to facilitate everyone. The company is based in San Francisco and they are a Bitcoin company with them being seen by many in the industry as being the biggest trader of Bitcoins in the world.
With Coinbase, it does operate in a slightly different manner to a number of other exchanges that are out there. With them, you will discover that traders have the opportunity to set prices for their currencies in accordance with the market. They state that this does then allow individuals to purchase cryptocurrencies in a shorter period of time than other exchanges, but the difference with this can be relatively small.
There are a number of other differences with this exchange that could push them to the top of your preferred list. They are listed as being one of the few that do allow bank transfers and credit cards to be used to deposit money as most will look at using cryptocurrencies only.
Of course, there are fees involved, and Coinbase is not the cheapest out there. On average, their fees are going to range from 1.49% to 3.99% and this will vary depending on the payment method that you are using. If you plan on using a credit card, then you will automatically end up being pushed to the upper end of that scale.
The problem with Coinbase is that they do only offer the opportunity to purchase Bitcoin, Litecoin and Ethereum. They do plan on offering additional currencies at some point in the future, but they state that it depends on the security aspect for every new altcoin.
Finally, it should be mentioned that it is very easy to operate your Coinbase account. Creating the account in the first place takes a minute and you should look at getting yourself verified as soon as possible. Also, you need to establish your funding source to then allow you to begin trading. Once you do this, you will then see a list of potential trades and the rates at which the exchange can be made possible. Completing the trade is done in a few clicks of a button.
Overall, Coinbase does primarily focus on Bitcoin but do not rule it out if you are looking at trading in Ethereum as well. They have a huge customer base so that does open up new doors for trades to occur if you are willing to spend the time checking out everything that the platform has to offer.
This is the ideal place for those new to cryptocurrency who just wish to purchase some of the more popular coins and hold them or then send them on to exchanges where they can purchase smaller coins.
Sign up to Coinbase here.
The Cryptopia exchange will allow you to trade various cryptocurrency assets with other traders and it operates on a peer to peer level. This means that you deal directly with the other individual rather than through a third-party, so that may mean that this is not the best approach if you are new to cryptocurrencies.
At the same time, Cryptopia is also different in that it provides you with the opportunity to purchase or trade in virtually anything that can be bought and sold with cryptocurrencies. This is a unique angle to take, and the marketplace does help to push the exchange and increase its popularity.
They do have some rather extensive support for cryptocurrencies, and that does mean that it is possible to trade in those lesser known digital currencies on their platform. This, once again, opens up new possibilities as they do state that there are very few cryptocurrencies that cannot be found on their network.
They also offer you the chance to study the different cryptocurrency rates on other exchanges as this then means you can make a better call as to whether or not you want to go ahead with the trade. It can often be useful for those lesser-known cryptocurrencies where information may not be so readily available as the likes of Bitcoin.
Their overall approach is rather straightforward and easy to follow. Their CoinInfo section details over 500 different coins including the block height, their listing status and a number of other important factors that can play a role in you making your decision.
Cryptopia also offers payment options, the ability to mine coins, and it also has its own lottery so it is seeking to work its way into different areas.
Signing up for this website is easy, and you get a $5000 daily withdraw limit just by verifying your email. If you then go through the 2 step process, this is raised to $50,000 per day and if you go to a third stage of verification then it increases ten-fold once more.
However, there are still a few issues with this cryptocurrency exchange. There are too many different areas to focus on so it is easy to lose track of what is going on. Also, unless you have New Zealand Dollars then you will have to use a cryptocurrency to fund your account.
Overall, Cryptopia is a rather involved cryptocurrency exchange with so many facets that you could easily end up being rather confused as to what to do next. Their fees are low, and they do have over 500 coins on their system as well as offering random rewards to their users. Other things such as the lottery are a bit of fun, but do not allow this to distract you from the serious business of trading cryptocurrencies, and with this you will find an easy to follow interface that completes the process with the least amount of hassle.
Here it's possible to often find smaller coins than those trading on Binance.
Sign up to Cryptopia here.
The Coinfalcon cryptocurrency exchange is viewed by many as being one of the easiest interfaces to use when you wish to trade in a variety of cryptocurrencies. They state that they offer one of the fastest exchanges out there along with a strong fee structure that should not break the bank for any trader.
They offer support for a number of cryptocurrencies including Bitcoin, IOTA, Ethereum and Litecoin, but it is the fact that they say the trades happen instantly that is going to generally be the most attractive thing about this exchange. Also, they state that security is a major concern for them, which is why 98% of all of the currencies that they hold are stored in an offline wallet making them far more secure and giving you a certain peace of mind.
Their fees structure depends on the asset in question, although there are no fees for deposits and even when it comes to withdrawing things it is kept relatively low. They do charge 0.25% as their commission, but that is well within industry rates at this moment in time.
This is a new exchange though so the volume on there isn't as high as the other options listed. I do however expect them to grow quickly due to how easy it is to use and a support team who respond quickly.
Overall, Coinfalcon likes to keep things as streamlined and as easy to use as possible. They do not offer anything fancy when it comes to trading cryptocurrencies, but then why would you need that in the first place? Their interface shows you the trading prices and what is available, and creating the account and verification runs along similar lines to other cryptocurrency exchanges that are out there. Out of the different options, it could easily be argued that this is the one that is the most straightforward and ideal for beginners who wish to dip their toes in this industry.
Sign up to Coinfalcon here.