Ever since Bitcoin took the world by storm it has been much talked about in news, television shows, and social media, among others. The huge profit that its pioneer investors were able to amass from what once was an obscure currency intrigued the world, and the buzz it created helped it secure a dominant position in the world of finance. It is thus not surprising that you want to join in and invest in Bitcoin.
A vital step in getting started on Bitcoin investing is educating oneself about buying Bitcoin and cryptocurrency exchanges. The first step investors often take is by signing up with an exchange, which is a service platform for changing cryptocurrencies into fiat money and an online marketplace wherein buyers and sellers can intermingle.
By choosing the right Bitcoin exchange, while still dependent on exchange rates and the market status, you increase possibilities for successful investing and limit the risks of regrettably investing funds in fraudulent transactions. Thus, it is important that you get to choose the right Bitcoin exchange for you.
Before you decide and select a Bitcoin exchange, however, we encourage you to read through the informative details below which are intended to help you make the right decision.
Where is the exchange located?
Because laws and regulations over Bitcoin and other cryptocurrencies vary from one country to another, it is important that you first get to know the country where the exchange that you are looking at is based out of. Also, some exchanges offer specific user functions that are only accessible from certain countries, so you need to join an exchange that allows full access to all features of their platform in your home country. Also, never ignore the fine print; make sure to always check it for other terms of service for the exchange, particularly if you are looking to trade in multiple currencies.
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How can Bitcoin be purchased?
Investors can pay for their Bitcoin using cash, credit and debit cards, wire transfer, or other payment methods like PayPal. It may not be the convenient choice, however, if an exchange’s payment options are limited. Use the payment method that is most convenient for you, also taking into consideration the privacy involved in such. For example, credit cards are the least private payment method with transaction and processing fees that are higher and also higher risks of fraud. Although it will take a lot longer for the banks to process, purchasing Bitcoin using wire transfer is still recommended.
Are there fees involved in buying and selling Bitcoin?
Different Bitcoin exchanges have different rates, and will thus charge different transaction fees. There are exchanges that will also charge additional fees on top of deposit, transaction, and withdrawal fees. The important thing to remember is that you choose an exchange with fees that are a reasonable amount and are not exorbitant compared to the rest of the market.
Also an important factor to check is if the exchange offers “locked in” pricing, which means that even with delays in the transactions, the charges stay the same as when you bought the Bitcoin. This is because fees tend to change over time and can vary from one exchange to another. Such rates can fluctuate up to 10% or higher in certain instances.
How secure is the exchange?
One thing you should never compromise in every transaction is security. First, check that the web address of the exchange is secure. Make sure that the exchange site has an https and not just an http as the latter is not secure and may expose your investment to too much risk. Other security features you need to check include a secure log in and two-step verification. Do not sign up to the exchange if you have doubts regarding security.
Majority of Bitcoin trading platforms require ID verification for deposits and withdrawals while some allow you to make such transactions anonymously. Although verification takes time, it helps protect the exchange from fraudulent transactions, money laundering, and other scams.
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Is the exchange reputable?
Finally, and possibly one of the most important consideration Bitcoin investors should look into when finding the best exchange is whether it is trustworthy and reliable. Does it have a good reputation, satisfied customer reviews, and positive feedback? Check out discussions about the exchange on internet forums, such as the Bitcoin Reddit.