When you’re buying cryptocurrencies, it’s important to choose a cryptocurrency exchange that suits your needs. There are several factors to consider, including security, accessibility, liquidity, and customer service. If you’re new to the world of cryptocurrency, you’ll want to find an exchange that’s easy to use and offers good security.
Accessibility
Accessibility is a critical feature for a crypto exchange. A good exchange will be secure and easy to use, but it should be also attractive and contemporary. A well-designed website should also be easy to use, and the user interface and UX should be straightforward. Nowadays, the world is extremely fast, and it is essential that the crypto exchange you choose is as accessible as possible.
Security
Security is one of the most important aspects of a crypto exchange, and it should be a top priority. In the year 2020, it is estimated that cyber criminals will lose $1.8 billion through cyber attacks on cryptocurrency exchanges. Most of these attacks will involve ransomware, phishing, fraud, or other methods of digital theft. As a result, you should choose a crypto exchange with the best security standards.
Moreover, a good crypto exchange should implement user authentication as well as two-factor authentication. These security measures will require you to verify your identity by mobile phone, email, or other methods. Some exchanges will even integrate a Google authentication app to make the verification process even more secure. Lastly, a good crypto exchange should be regulated by the appropriate authorities and be compliant with Know Your Customer (KYC) regulations. This will enable the authorities to follow up on any security breaches.
Security headers are another important aspect of crypto exchange security. Without these headers, most web protocols are vulnerable to hacking and cybercrime. Therefore, it is essential to make sure that your exchange platform has HTTPS protocols enabled for all browsing sessions. In addition to this, you should also look for X-Frame-Options headers, which prevent content from being embedded and prevent clickjacking attacks. Moreover, an exchange should have a Content Security Policy (CSP), which helps prevent XSS attacks and lets you decide what dynamic resources can be loaded.
Another way to tell if a crypto exchange is safe is to look at its history. Some exchanges have been hacked, and have incurred significant losses. Check whether they have compensated their users for their losses, and taken measures to strengthen their security.
Liquidity
Liquidity of a crypto exchange is the ability of a crypto exchange to complete transactions quickly. The greater the liquidity, the faster you can exchange your cryptocurrency for fiat. You can assess liquidity by comparing a crypto exchange’s volume over a 24-hour period.
Liquidity is closely related to the number of coins and pairs available for trading. The more popular pairs attract more attention from traders. A large number of exchanges offer these services. They charge up to $1 million to list an initial coin offering, and brokers take a percentage of the funds raised.
A crypto exchange’s liquidity is crucial for its stability and ability to facilitate trades. A large number of trading participants means that it needs to be flexible. This flexibility helps it be more accessible than traditional markets. Historically, volumes were the major metric used to measure the performance of exchange platforms.
In order to attract large numbers of users, a crypto exchange’s liquidity must be high. This means that a large volume of transactions can make the price of the cryptocurrency fall. However, this is not the case with every exchange. A large volume of buyers will drive the price of a crypto down, while smaller volume will drive up the price.
A good liquidity provider will be knowledgeable about the cryptocurrency and have experience in the crypto exchange industry. They will also have repeat customers and be able to pick up new users easily.
Customer service
The quality of customer service at a crypto exchange is a critical component to a positive experience. Despite being digital businesses, many crypto exchanges are notoriously slow to respond to customer complaints and inquiries. To speed up the process, some have set up chatbots to handle customer complaints. While this approach has its advantages, it can also be problematic.
A well-designed customer support system includes multiple contact points and multiple channels. The firm should have an extensive knowledge base that includes helpful guides and articles. It is best if the knowledge base is multilingual and localized. The firm should also offer multiple modes of communication, including email, live chat, and social media platforms.
As cryptocurrencies are becoming more mainstream, there is an ever-growing demand for good customer support. Cryptocurrency customer support representatives must understand the various protocols and methods of cryptocurrency trading, and must be able to answer customer inquiries promptly. Moreover, a cryptocurrency exchange should offer its service in several languages.
Cryptocurrency exchanges should also have 24/7 customer support. Many exchanges do not have live support. That means that they may be unavailable when you need help right away. Furthermore, some exchanges do not offer phone support or even email support. If you need help urgently, you might have to wait for a few hours or even days for a response. Fortunately, some platforms are able to respond quickly through social media.
Despite the growing number of cryptocurrency exchanges, these companies often lack sufficient resources to provide proper customer service. As a result, they struggle to scale their customer service efforts, leading to a gap in the overall customer experience. Moreover, the current laws governing cryptocurrency activities make it difficult to build a good customer support framework. For example, the South Korean government limited external access to crypto markets in early 2018. Because of this, cryptocurrency exchanges are increasingly forced to find ways to scale their support services.
Fees
When using a crypto exchange, it is essential to be aware of its fees. These fees will vary from exchange to exchange, and can be in the form of network charges, trading fees, or deposits and withdrawals fees. You can minimize your exchange fees by reducing your trading activity, or moving to another platform that charges lower fees. You can also take advantage of promotional periods.
The fees of a crypto exchange should be compared to the amount of liquidity that it provides. For example, a maker fee will be lower than a taker fee, and vice versa. Maker fees are typically lower than taker fees, but not always. This is due to the fact that they add liquidity to the exchange.
The fees charged by a crypto exchange depend on how much of a volume you are making. Smaller volumes tend to have lower fees, while larger volumes are charged more. Additionally, some exchanges offer staking, which involves putting your funds as collateral for transactions. However, this service may cost you a few dollars per transaction.
Some exchanges charge a one-time fee for each trade, but many charge other types of fees as well. Some may offer no-fee trading for a limited period of time or offer a promotional deal to attract new users. But these exchanges must wait and see how many people stick around long enough to make it worthwhile.
There are many reasons why a fee schedule differs between platforms. Firstly, it can be because of cost or strategic decisions on the part of the platforms. For example, some exchanges may offer higher fees in exchange for more services and support a larger range of crypto tokens.
Also Read: What is Blockchain in Cryptocurrency?
