Crypto Exchanges — Which Is The Right Choice For Me ????

  1. Obviously the next question, which we should ask ourselves is, is it safe? This is a tricky question, as everything is safe till it is broken. Nothing is farther from the truth than the general perception that crypto exchanges are being run and managed by the top notch experts in this field and therefore these cannot be hacked. Once again google will provide you all the answers, if you have a heart to accept it. For a quick search, please do consider reading about MtGox (2014), BitGrail (2018), Coincheck (2018), KuCoin (2020) and Poly Networks (2021). Once again, the aim is not to scare you but to emphasise the importance of choosing a secure and stable exchange for a long lasting investment experience.
  2. The next differentiation comes between Decentralised and Centralised (Spot) Exchanges. For less technically inclined, it would suffice to say that decentralised exchanges facilitate peer to peer transactions without any central authority and mostly appeal to people who do not wish to disclose their complete personal financial details. It also appeals to those hardcore cult followers who strongly believe that there should be no intermediary control over any transaction reflecting the true spirit of BitCoin or many such other cryptos. Few known decentralised exchanges are dYdX, Uniswap (v3), PancakeSwap (v2). But to most of us common investors, who are more inclined to choose safety and comfort over ideology, centralised exchanges which are also known as spot exchanges are more appealing. Chances are that if you know about a crypto exchange for any good reason it is a spot exchange. All of us who follow financial news might know about a new unicorn CoinSwitchKuber which is a spot exchange. In addition few more popular exchanges in India are WazirX, CoinDCX, UnoCoin and ZebPay. If you want to trade in derivatives there are specialised exchanges for that too but many Spot Exchanges offer this as part of their integrated service.
  3. Charges and Fees — Whenever you start trading, you will need a crypto wallet. This is a digital wallet similar to Demat account which holds the cryptos which you have bought. Almost all the exchanges provide this facility for a fee. In addition, exchanges will charge you for every transaction be it buying or selling depending upon the type of account. If you are an investor who wants to accumulate cryptos, you may like to choose an exchange which offers greater safety even if it means paying more fees. On the other hand, if you are a trader you may prefer an exchange with least charges while providing reasonable safety.
  4. Lastly, I would consider safety in numbers. This is a new field which is evolving everyday in technology as well as in business model. Therefore, if you have the technical acumen to spot the next winning horse go ahead and invest in it but if you have limited knowledge like me about this field but still feel attracted to it, it would be best to follow the trend. The safest bet would be to choose the exchange which has the largest market share in number of accounts, transactions and supports local currency as well. If you are wondering, where will you find all these data……its a one stop solution at CoinMarketCap.com.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store