Where to buy and sell cryptocurrencies
There is a wide range of questions to be answered before a trader chooses where to buy and sell cryptocurrencies. It is a matter of security, location of the exchange, transparancy, liquidity, fees, etc..
Bitcoin is still not well regulated in many countries, but things rapidly change. In a couple of years time, the situation should be much better. The popularity of Bitcoin increases so goverments are looking for ways to gain certain controll over it. Amongst the reasons why they are looking into it are money laundering, terorism and drug smuggling. This is why the location is so important. Most countries don’t have regulations for Bitcoin for now, but they might have in the future and that might affect the way people trade and use cryptocurrencies. China is not a good choice for western traders for example, because it is hard to get verified and the support in english is not good enough.
CryptoCurrency Pairs and liquidity
Different exchanges offer different cryptocurrencies. In the case of some altcoins, they are offered on one or two exchanges. So check which currencies are available and do they suit your needs. The liquidity could also be a problem sometimes depending on your trading volume, especially if you daytrade.
Maybe because cryptocurrencies are still kinda shady business some owners keep anonimity. It is a good sign if they are public and well known. It is also important that owners provide proof of reserve. Bitcoin audits are excellent way to prove that the exchange has enough liquidity and can cover all sales.
Exchange fees and how Cryptocoins can be purchased
The fees vary over different platforms and can change in time. Some platforms will charge you additional fees and not only transaction fees. So make sure you check the fees over different platforms. It is also important to check the payment options: can you purchase wia wire transfer, PayPal or credit/debit card. Please concider that credit card payments are not that secure.
Anonimity and Security
It is almost impossible to stay completely anonimous, unless ofcourse you buy cryptocoins directly from a person. You can check if the exchange follows Know Your Customer (KYC) and Anti-Money Laundering (AML) laws and if that is the case they will require some proogf of identity. Make sure that the exchange has HTTPS security protocol. They should offer two factor authentificatioon(2fa) as well.
How fast are the transactions
Make sure you check how fast you will receive your coins after the purchase. Ofcourse that may vary from person to person. Check if they offer lock in prize option as well. It means that if the coins take some time to arrive you will pay the price you bought them at.
Order book Volume
An order book is simply a list of buy and sell orders on the exchange. Higher volume means that traders are active so there is a good amount of liquidity. If a exchange does not publish its order book doesn’t necessary mean it is not legit, just maybe the volume is just too small or they don’t have that option yet.
Reputation and customer support
Bitcoin frauds and scams
Please read our article avoid Bitcoin scams for details.
I usually use CoinMarketCap.com for detailed information about Cryptocurrencies. Most of all it is quite simpe and easy to use and it also provides plenty of data. You can see the volume traded as well as compare the price versus Bitcoi or USD. They have information about the exchanges that trade any given altvoin. That’s where i check where to buy and sell cryptocurrencies. There are also links to thre official site of the specific altcoin, their social activity and the markets where it is traded. Please also read our reviews of Cryptocurrency exchanges.