How to choose the perfect crypto exchange platform for Ethereum?
The majority of all trading operations with Ethereum and other altcoins are carried out on regular cryptocurrency exchanges. Daily trading volume on Poloniex, Kraken, Bitfinex and other top platforms is estimated at hundreds of millions of dollars. At the same time, there are more and more services, which allow you to buy and sell cryptos faster, easier and more convenient. Is this really the case? Can exchanges of such type be seen as a worthy alternative to regular trading platforms? How do these differ from each other in general? Let’s find out more!
What is crypto exchange platform?
Crypto exchange is a service that allows you to exchange cryptocurrencies (obviously). You can exchange one coin for another (e.g. ETH for XRP) or for fiat money (e.g. ETH for USD or vice versa).
There are two types of exchanges:
- Offline. Really convenient option if need to exchange cryptocurrencies for cash. For example, you want to exchange your Ethereum for dollars. You make an application for exchange on the website of the exchanger, and cash is taken already in the physical department (office, cash desk, etc.). This type of exchange platforms is not very popular, so we will focus on online options.
- Online. An online exchanger is a website where you can buy or sell cryptocurrency you are interested in at the rate set by the system.
You can buy or sell digital currencies not only on exchanges, but also on cryptocurrency trading platforms. But their users often need to undergo a tedious verification procedure. For actions on exchange platform you do not need to verify your identity in most cases.
How does it work?
Your transactions can be processed in different modes:
- Manual — each time you re-enter your data, they are manually checked by the exchange operator, you pay for the exchange through the selected service (eg, pay from a WebMoney wallet), the operator checks the payment and transfers the funds specified in the exchange. The whole procedure may take several days.
- Semi-automatic — you pay for the transaction yourself, and the operator checks the payment, but the rest of the system does automatically. You will have to wait from 10–15 minutes to several hours, depending on the technical capabilities and current workload of the exchange.
- Automatic — you create templates for exchange, and the system does the rest, the operator is not required. The exchange takes place almost instantaneously.
What is the difference between crypto exchange and trading platform?
A crypto trading platform provides a marketplace and acts as an intermediary between buyers and sellers. When trading on it, you deal with private owners of assets, that is, the same traders as you.
The exchange platform is directly involved in trading. Trading operations are carried out not with other users, but with the exchange itself (more precisely, its owner or owners). What does it mean for a trader? Price conditions on a trading platform depend on many players (who can pump prices of individual cryptocurrencies). Price conditions on an exchange depends only on its owner.
It would seem that this is an advantage for exchanges — they are not suitable for manipulations and schemes like Pump&Dump. But experts emphasize that trading platforms environment is more democratic. After all, pricing is influenced by a large number of players, not just the owner of the platform.
But the process of price formation on exchanges is not so simple. The most famous platforms bind their rates to the exchange market. Most often, specific exchangers are chosen as a reference point. For example, the exchange rate on BTC-Trade is tied to the current rate on BitStamp.
However, many exchangers set their own rate, which may differ significantly from the current prices on top trading platforms. And, despite the active promotion of exchanges themselves about the benefits of their use, the set rate does not always play into the hands of the investor. Another important point — on an exchange you cannot choose a price for buying or selling the cryptocurrency, there is only one current rate.
Advices for choosing the best crypto exchange platform
A reliable exchanger has the following features:
- It has been successfully operating for at least a year;
- There are reviews about this exchange platform on the Internet, most of them are positive;
- It works in automatic or semi-automatic mode and offers a really good exchange rate (after all, even for a day the situation in the market can change, and you will be in the disadvantage) if you do not have time to quickly buy or sell the right assets;
- It offers a wide range of pairs for exchange, it presents all the most popular cryptocurrencies;
- It has sufficient reserve for operations (experienced users advise to choose platforms that have a stock of top-level cryptocurrencies from $100 000 and above);
- It operates 24 hours a day and is not noted for malfunctions, idle time and prolonged technical faults;
- The website has online support, specialists who promptly advise users on all issues.
Choose exchangers that are hosted on specialized aggregators. For example, on BestChange or YChanger. These are services that display online exchange rates on different exchangers. But most importantly, they collect detailed information about trading platforms, their cryptocurrency reserves and the number of currency pairs, as well as user feedback.
Exchangers who have long worked in the market, have many positive reviews and offer the most favorable exchange rates, automatically fall into the top sites-aggregators.
How to avoid scammers?
Unfortunately, the Internet is full of exchange platforms, which are actually made for stealing users’ money. And the options to steal money can be so sophisticated that perhaps they are not described in one article or even a book.
For example, scammers can use the whole site to steal money. This will be a full site or just a couple of pages that depict a service exchange. Those fraudulent sites that have already worked online at least a month, usually fall into the blacklists.
The problem is that fake site, consisting of a couple of pages, can be moved to a new domain relatively easy. Fraudsters do this: as soon as their site is highlighted, blacklisted or on the note of the police, criminals immediately close it and create a new one.
Another way to deceive unsuspecting users is so-called “phishing”. This option means that real exchange platforms are created for fraud. Such services can actually make exchange transactions with small amounts, even get positive feedback on forums and social networks. Fraudsters can actively order advertising for their resource, attracting new victims. When it comes to a really “big fish” — the service receives money, but does not give anything in return. It is very difficult to defend against such deception. That is why it is recommended to use only those services that have worked at least a year, or even two or three years.
Another variant of deception is when a criminal uses a normal exchange platform for his purposes. In this case, the client will not check the cheater, because he can take all the information and details from the real exchanger. After the client sends money to the account specified by the attacker, the latter evaporates along with the money. Subsequently, the user begins to make claims against the exchanger, whose employees are in fact not guilty of anything.
Pay attention to details!
So, how do you choose a reliable exchange platform? First of all, read the customer reviews. Read not the “reviews” that are on the service website, but only reviews on independent websites. Of course, comments can always be faked.
Some other signs of cheated comments:
- Repetitive expressions;
- A large number of reviews made in a few days;
- Extensive use of slang;
- Very standard user names or nicknames.
There is one more fairly reliable way to check the integrity of the exchanger: to use the service Bestchange or similar. Such aggregators place in their lists only verified sites. So all the exchange platforms that are in the lists, you can use without fear. In addition, Bestchange displays data on exchange reserves, which can be useful to learn.
You should check the reality of the legal entity that is displayed on the exchanger site, the presence of the necessary licenses, etc. It is important to know who works in the exchange. Employees can be found in social networks, where you can check their real work experience, friends, habits, that is, make sure that these are real people.
You can check the age of the domain of service. If the exchange has several contacts for communication, then at first it is better to use each of them.
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