Bitcoin Exchanges - Types, Features and Functions | Safetrading
A Bitcoin exchange is a platform, where users can purchase, sell or exchange crypto for other digital or traditional currencies like Euro or US dollars.
There are different types of crypto exchange websites depending on the level of user’s expertise and preferences.
Top Bitcoin Exchanges 2020:
For example, those who want to have access to a full range of trading tools and instruments, and know how to trade on a professional level, need to choose an exchange with ID verification and a registration process.
But if you just need to make a trade from time to time, there are BTC exchanges that don’t require registration or complex verification.
However, we will concentrate on the most reliable and reputable exchanges, which can guarantee the safety of data and convenience of trade.
Types of Bitcoin Exchanges
Before getting to the point let us remind you that you are reading the best Bitcoin exchange guide no matter what your level of expertise is.
So make yourself comfortable and don’t forget to take notes.
We have already discussed that crypto exchange is a platform, where users trade and exchange digital currencies on each other or on regular currencies like Dollars, Euros, Rubles or Yuan.
Along with mining, Bitcoin exchanges are considered one of the tools for obtaining cryptocurrency.
BTC exchange can be called an analog of a trading platform such as Forex. By investing real money every participant can conduct operations on analyzing rates, receive signals, as well as convert and buy Bitcoin (or other virtual currencies) on real money.
Every novice miner willing to try his hand at this type of earnings can turn to a huge list of crypto exchanges.
After learning a few lessons it’s rather possible to start making solid money.
Want to know where you can exchange Bitcoin?
Or to learn how to distinguish a good exchange from an unreliable one?
Just read further!
Why Do Traders Need Bitcoin Exchanges?
The main exchange function is selling currency pairs, which will bring traders outstanding profits.
When analyzing the best Bitcoin exchange activity, it is possible to distinguish two directions – trading and exchanging. Those who are willing to obtain crypto money at a beneficial rate should definitely turn to a crypto exchange.
There are also traders, who keep their assets on exchanges using them as a wallet.
However, experts don’t recommend such a strategy because exchanges sometimes end up as scams.
To make good money on a crypto exchange platform there is no need to know everything about these websites. You can make a fortune by speculating and many users, who started with investing a few dollars, have already earned millions!
To understand that there is only one step between you and extreme profits it is enough to follow how rapidly the cryptocurrency rates change on a daily basis. Due to a high volatility level, cryptocurrency can be used as a speculative instrument, which allows maximizing profits.
Exchange trading can definitely help you to hit the jackpot. For example, within a year stocks may increase by an average of 30% and it is considered a huge profit.
But let’s take crypto for comparison: during 2013 it has increased in price by more than 10,000%.
No wonder that such a market situation attracts huge investments, which only heat the interest in virtual currencies.
A BTC exchange allows trading and earning.
And the best part is that trading on a Bitcoin exchange is similar to the exchange processes.
By the way, this is one of the main differences of a crypto exchange from a Forex market, where the broker can assign stock quotes.
If to speak about Forex exchanges, you should know that they are formed artificially, while a Bitcoin exchange list differs by a single price and can conduct trade even with the minimum difference, which occurred as a result of its placement on a certain trading resource.
But how is it possible to choose the best Bitcoin exchange?
What features to consider?
We are happy to introduce you to the most secure BTC exchange websites on the global market.
Custodial VS Non-Custodial Service
When talking about a Bitcoin exchange the issues of storage and custody take a place.
This concerns the storage of user’s personal information including private keys and transaction history by a balance sheet, not through blockchain technology.
On the other hand, there are non-custodial services, which means that a crypto exchange platform doesn’t require customers creating a personal account. Such platforms don’t hold users’ assets on a balance sheet.
The approach means that there is an additional security layer involved together with better anonymity and protection.
Such services are able to make transactions automatic.
Centralized VS Decentralized Exchanges
To have a better understanding of centralized and decentralized exchange websites we have compared their features in a table below.
As you see from the centralized and decentralized Bitcoin exchange comparisons above, it is rather difficult to choose one because each of them has both drawbacks and flaws.
While CCEs have better functionality it is important to remember that the cryptocurrency market was created due to the appearance of blockchain technology.
To choose the best Bitcoin exchange UK you should first understand your goals and be aware of your expertise level.
How to Choose the Best Bitcoin Exchange?
Choosing the best and safest exchange is the same as choosing a provider – before entrusting side platforms with your money, it’s important to learn everything about it.
Below we have made a full list of the features that should be taken into account when choosing the best Bitcoin exchange 2020:
Reputation
The simplest way to learn more about the best cryptocurrency exchange 2020 is to read reviews of individuals and reputable websites.
It is also a good idea to ask questions on Reddit and BitcoinTalk.
Fees
Almost every crypto exchange provides users with the necessary details on the fees.
So before signing up make sure you are ok with the offered fees for depositing, withdrawing, and making a transaction.
The fees of various exchanges may greatly differ.
Payment Methods
Is it possible to pay via a debit and credit card?
Does the crypto exchange platform accept PayPal and direct wire transfers?
Exchanges with a limited list of payment options may be rather inconvenient.
Remember that when using debit and credit cards identity verification is compulsory, which means higher prices and fees, and risks of stealing your personal information.
Wire transfers may also be inconvenient because they take lots of time.
Verification
Most of the Bitcoin exchange websites require identity verification for making deposits or withdrawals.
However, some exchanges may let you stay anonymous.
But even though verification may seem time-consuming, it protects the platform from money laundering and scam, which is beneficial for both sides.
Geographical Limitations
There may be certain crypto exchange functions that are available only in particular countries.
So before joining make sure that the chosen exchange allows accessing all the tools and functions from the country you are living in.
Exchange Rates
The best Bitcoin exchange 2020 is often the one, which has better rates. Just imagine: there are platforms, which charge up to 10%! So if you spend some time looking for the best exchange rates you may save lots of money.
Problems With Bitcoin Exchanges Work
What is the best Bitcoin exchange USA?
How to protect assets and to trade without any fears?
Unfortunately, platforms are not immune to hacker attacks and problems, so when choosing an exchange, traders need to be aware of the issues they may face.
Here are the most common problems when dealing with an exchange:
- Security issues – 40%;
- High trading fees – 37%;
- Low liquidity – 36%;
- Weak customer support – 33%;
- Limited crypto pairs – 22%;
- Low-quality user interface – 21%;
- High withdrawal fees – 18%.
The Bitcoin exchange statistics above were provided by Statista and collected in the beginning of 2020.
The percentage means how many respondents have called the problem when asked about crypto exchanges work.
For example, 40% of traders said that exchanges have problems with security and 22% - with a number of crypto pairs.
Conclusion
With the growth of cryptocurrencies, popularity increases attention and interest towards BTC exchange websites.
To choose a reliable and secure european Bitcoin exchange you need to pay attention to the following features: its reputation, fees, payment, and verification methods, geographical restrictions, and exchange rates.
However, every exchange is nothing but a program and problems can happen from time to time.
They include security issues, high trading fees, low liquidity, weak customer support, limited crypto pairs, low-quality user interface, and high withdrawal fees.
But despite all the problems and limitations, crypto exchange websites remain rather popular.
In the next review we will tell you about the most popular platforms in more detail.
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