Bitcoin has been creating a lot of buzzes lately, especially within the investment community, as the coin has gradually grown into a very valuable asset.
The internet is currently witnessing a great number of discussions and debates concerning Cryptocurrencies, particularly BTC and how to obtain and earn Bitcoin.
If you are one among the thousands looking for ways to grasp some Bitcoins, let me start by telling you this, there are a great number of ways by which you can buy bitcoins. Nevertheless, it is necessary to find the right way.
Cryptocurrencies
It is quite interesting to know that virtual currencies that are on and about to rule the monetary system of the world were the result of a simple concept.
When the creator of Bitcoin, Satoshi Nakamoto, invented BTC – the sovereign of the crypto world – his only intentions were to create a peer to peer system, which could work on its own as a decentralized cash exchange.
Satoshi’s purpose was to develop a system with no central authority, which led him to cryptocurrencies where there is no server, besides each peer included here bears his part in all the transactions made possible.
If you are a beginner in the cryptocurrency system and feel like you should learn more before investing your valuable money in Bitcoin, I suggest you take a look at this complete guide for beginners.
What is a Bitcoin Exchange?
To put it simply, a Bitcoin exchange is an online marketplace which makes it easy for traders to buy or sell bitcoins ( and other cryptos in their exchanges) in transfer for fiat currencies or altcoins.
A Bitcoin exchange joins customers and traders together just like any regular currency exchange does. Both dealers and buyers will be asked to select a market order or a limit order to buy or sell Bitcoin and other virtual currencies.
Market order in the exchange, allows a trader to sell his coins for the best returns in the digital market. While in case of order limit, the deal will be directing the exchange to trade his currencies for a price that is below the prevailing rate or over the present proposal, depending on whether they are buying or selling.
The cryptocurrency exchange will list you as a maker or taker depending on your pick.
When a customer places a limit order, the transaction places them in its order book until the price is met, and the seller is called a maker.
Takers on the other hand are dealers who take a market order which is usually immediately filled.
However, take note that none of these services are free, all Bitcoin/ Cryptocurrency exchanges exact transaction charge that is employed to each transaction carried within the trade.
The fee exacted is correlated to the number of Bitcoin transactions that a trader transfers on the exchange, and would differ for each exchange.
Getting started
Now that you have familiarized yourself with a bitcoin exchange you are ready to start trading for your coins.
However, there are hundreds of currency exchanges available in the market, which one do you choose?
Choosing the Right Exchange
There are many factors to be considered for finding the best-suited cryptocurrency exchange. Each trader will have his/her personal preference, yet the basic qualities remain the same.
Exchange Rates
Make sure to check if the exchange rate provided by the system is close to the global average price.
You can do this simply by comparing a local Bitcoin exchange’s prices to a Bitcoin price index. This way it is easier to get the best Bitcoin exchange rate.
Method of Payment
Be sure to look for a Bitcoin exchange that accepts your preferred payment method. Different payment methods also incur different fees.
Keep in mind that the payment methods or preferred apps of almost all exchanges will be different, hence keep an eye out for this before signing up.
Buying Limits
Every Bitcoin exchange proposes various buying limits, which often differs depending on the level of identity verification.
However, most exchanges allow an FAQ page online where the distinctive levels of verification are explained in detail.
Charges Applied
Bitcoin exchanges charge different prices for its services. Although, most Bitcoin agents, who sell bitcoins directly to clients, charge a flat rate of 1% per transaction.
Exchanges having order books are equipped for high volume trading, and they often impose fees of 0.25-0.50% per sales.
Regulatory Information
While purchasing bitcoins, your currency is being exchanged for cryptos, which means you should be able to trade your crypto with your money. To be on the safe side, It’s best to use a regulated currency exchange.
Utmost, exchanges offer information regarding their regulatory agreement on their websites. If an exchange appears suspicious and does not allow regulation information, it would be better to look for better option.
To make things a tad bit easier for you, here is the list of some of the best bitcoin exchanges that have been approved and voted up by the web.
Best Bitcoin Exchanges
Coinbase
Coinbase is one of the world’s largest and most popular Bitcoin exchanges. It is available in over 30 countries around the globe and offers a great number of methods to purchase Cryptocurrencies including bank accounts, Interac Online, debit card, etc.
Most of the features offered by the exchange depending on your location, nevertheless, Coinbase provides high limits to its customers along with faster transactions.
It provides a large variety of coins such as – Bitcoin. Dash, Ethereum, Ethereum Classic, Litecoin, Qtum, Monero, Ripple, Tezos, Zcash.
Advantages
- Coinbase offers its users a wide variety of features.
- Presents relevant buying limits and high liquidity levels
- Great virtual currency exchange for amateur traders.
Disadvantages
- Payment methods are limited
- User privacy is compromised as it can track all activities of a user
BINANCE.COM
Binance is a Chinese corporation that is based in Tokyo, Japan.
The company had its ICO in 2017, however, even within this short period, this Chinese bitcoin exchange managed to gain a lot of popularity. The site claims to have the capacity of processing 1,400,000 orders per second.
Advantages
- Binance is a great option for traders who prefer to trade on a highly liquid exchange with number of coins listed.
- Exchange charges applied are comparatively very low.
- User-friendly for beginners as well as experienced crypto traders.
Disadvantages
- The only con is that the exchange doesn’t allow Fiat deposit methods.
Changelly.com
Changelly, which came to life in 2015, works by using an automatic trading robot that can work alongside many great exchanges.
The best feature of this exchange is that the user is not asked to verify or sign up for trading coins.
Currencies traded on Changelly include Bitcoin, Ethereum, Monero, Zcash, Dash, Ripple, Litecoin, Dogecoin.
Advantages:
- Supports a great number of currencies.
- The exchange is user-friendly.
- Accepts debit card/ credit card payments
Disadvantages
- Imposes high transaction fees
- No legit information regarding the creators
BitMEX
BitMEX was developed by a team of finance, web, and trading specialists. The exchange is mostly suitable for advanced and experienced traders.
Bitcoin is a major option supported in the exchange, it also many other Cryptocurrencies.
Currencies that are available on BitMEX: Dash, Ethereum, Ethereum Class, Litecoin, Qtum, Monero, Ripple, Tezos, Zcash.
Advantages
- BitMEX proposes future trading abilities.
- The exchange offers high levels of leverage
Disadvantages
- Not the best exchange for beginners
- BitMEX has a complicated user interface
Bitstamp
Bitstamp presents a less complicated yet user-friendly interface and owns a large trading volume, making it a prominent exchange for significant buying and selling.
The exchange allows the purchase of digital currencies through debit and credit cards.
Advantages
- Bitstamp has resisted numerous attacks and is quite popular among traders
- Since it is regulated by the Commission de Surveillance du Secteur Financier, Luxembourg, promoting high-security levels
Disadvantages
- Highly complicated account verification process, which also requires to submit confidential information
Local Bitcoins
Local Bitcoins is a global Bitcoin exchange that renders a large variety of features to its users. The exchange is accessible in almost all countries.
However, the liquidity of the coin will be based on the number of traders at your location. Moreover, users can trade by using any payment system depending on the availability in their area.
Advantages
- There are a great number of payment options available.
- Since the exchange has been around for a while, it reduces the chances of you getting scammed.
Disadvantages
- Even though they advertise low transaction fees, the charges may vary according to the payment method.
Coinmama
Coinmama is a cryptocurrency exchange based in Israel that specializes in the sale of Bitcoin by credit cards. The exchange upholds a number of countries globally.
The verification process on Coinmama is fast and takes less than ten minutes. However, the charges are high at around 6 percent. The company provides customer support and assistance through email.
Advantages
- Coinmama offers high limits for all purchases through debit or credit cards
- The exchange is accesible in a notable number of countries.
Disadvantages
- They impose a higher transaction fee for all types of debit or credit cards.
Creating an Account on Crypto Exchange
Users will be required to undergo a few verifying procedures to authenticate and confirm your identity to be able to transact currencies on these exchanges.
Once the verification process is accomplished, the user has to transfer in money within their account before they can start buying/selling Cryptocurrencies. Different exchanges employ varied payment methods that include wire transfers, credit/debit cards, bank drafts, money orders, etc.
Keeping your bitcoins or other currencies on your exchanges are highly unsafe. You should never save them on the exchange for longer than is required.
To make your Bitcoins, altcoins or any other cryptocurrency secure, you will have to have a hardware wallet such as the Ledger Nano S/Trezor which is not directly connected to internet. However, for short term or daily use, you can use these exchnages as they have undergone through variety of security checks.
If you are buying the bitcoin or altcoin as an investment, just move your coins off the exchange and into your own hardware wallet. This is truly the only protected way to store digital currency.
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