Cryptocurrency trading platforms allow users to exchange traditional currencies and cryptocurrencies with other cryptocurrencies.
These trading platforms are introducing a new form of money exchange into the conventional world of finance.
There are many trading platforms but here we show you three of the leading ones. Here is an in-depth comparison of the three most popular platforms: Coinbase, Changelly, and Poloniex.
Before delving into the features of each trading platform, however, it is essential to understand what you should expect from any given exchange platform in order to make an informed decision.
Confidentiality – How much private information does the trading platform ask for? For instance, do they require ID verification?
Restrictions – Is there a limit on the number of purchases you can make? Does the platform support the trading of large sums? Some trading platforms, for instance, have withdrawal restrictions in place to regulate the amount users can take out at one time.
Charges – How much does the trading platform charge for every transaction? Are the fees reasonable in comparison to the platform’s competitors?
The typical fee for credit card transactions is around 4% and 1% for cash purchases with usually a premium of up to 10%. On the other hand, the fees are typically in the range of 1-1.5% for wire transfers. It is always a good idea to draw a comparison between different trading platforms where these fees are concerned.
Processing time – How quickly will you have your coins transferred? Keep in mind that most issues related to processing times are the result of out-dated banking systems and not necessarily cryptocurrency. Purchases made by credit cards typically go through instantaneously, but wire transfers take few business days, minimum, to process.
The platform’s standing – How well-established is the trading platform? Has it been in operation for a while under clear guidelines and regulation? Numerous cryptocurrency exchange platforms have turned out to be fraudulent over the years, which is why it is paramount to dig deep to avoid becoming a victim of a scam.
Different types of trading platforms – The primary distinction between most cryptocurrency trading platforms is that you can either deposit funds (Poloniex) or exchange your money instantly (Changelly).
Making a deposit puts you at a higher risk of a loss as opposed to exchanging instantly. On instant exchange platforms, the possibility of getting scammed is lower because fraudulent activities get unearthed and announced before any more deposits are made. However, with exchanges where users deposit funds, these funds are stored and are at risk of scams at all times.
What to watch out for in a trading platform – For one, you need to ensure that the cryptocurrency exchange platform you are signing up for is under strict regulation and has measures in place to prevent hacks. Secondly, make sure that the platform has good user assistance and support. Finally, opt for an exchange platform that is well-established, well-regarded, and has been in the game for a while. A company’s track record and rating can be indicative of whether or not their trading platform has a good reputation and is trustworthy.
Risks you should be mindful of – Unless you and you only have private access to your coins, avoid storing your funds on a trading platform. A safety measure you can take is acquiring a cryptocurrency wallet for the storage of your coins. While these wallets may not be cheap, they are worth the peace of mind in the long-run to avoid serious losses.
Available in the U.S., U.K., Canada, Australia, Europe, and Singapore, Coinbase is an excellent entry into the world of cryptocurrency, particularly if you are a first-timer. The platform’s interface is very user-friendly, rendering Bitcoin, Litecoin, and Ethereum transactions easy as 1-2-3.
Considering a majority of cryptocurrencies can only be exchanged with Bitcoin, Coinbase is an ideal starting point for beginners regardless of what type of cryptocurrency you want. Coinbase allows credit card and bank account transactions and charges 3.99% for credit card purchases and 1.49% for wire transfers.
Changelly is a one-of-a-kind trading platform that works without the need to deposit any funds. Users only select the type and amount of coins they want to purchase, and the platform guides them through the process without the hassle of a deposit. In the fast-moving world of cryptocurrency, Changelly has easily become the quickest and most convenient platform for cryptocurrency trading. You nail down your rate and just wait for the exchange to be processed.
If we’re talking volume, Poloniex has become the biggest player in the cryptocurrency trading game with a solid liquidity rate for many cryptocurrency pairs.
The most glaring downside is that the platform is now a hot target for hackers because it runs on deposits unlike the likes of Changelly, which means that if you decide to opt for Poloniex, it is best to shorten your funds-storage time on the platform.
Featured Image: coincentral.com