Many traders and investors believe that cryptocurrency is the wave of the future. But what does this mean exactly? Years ago, bitcoin started it all as the first form of digital currency, and now there are more than a thousand types of digital currency to choose from, each of which is fighting to claw their way to the top as the next biggest and baddest digital currency to invest in. So far, no currency has been able to match bitcoin in worth, but there are some important coins you’ll want to keep your eye on in the future.
If you’re new to cryptocurrency, then learning how to leverage, trade, or invest in coin can be overwhelming. The odds are you don’t even know where to start, what coins to invest in, or how you can make money in the cryptocurrency market, and that’s where we come in. We’ve checked out the leading cryptocurrency exchanges on the market and did our homework in regard to transaction fees, currency options, the types of payments that are accepted, and much more.
We’ve even covered a wide range of topics based on cryptocurrency mining, what you need for a pro-quality mining setup, and even where you can get free coin through a variety of online outlets.
Basically, our site has it all. We’ve done our research, so you don’t have to, and all to provide you with the perfect cryptocurrency resource. Do you need to know the benefits of dogecoin to bitcoin exchanges? What are the top altcoins? Or how to get free Ethereum? We’ve got the answers for you.
Learning how to navigate in the world of digital currency isn’t easy, but we’re dedicated to preparing you by providing you with exactly the type of information you need to succeed in the market.
Even better, we’ve got a number of tips and tricks you can try so you can earn more coin with less effort.
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How we Chose the Leading Coin Exchanges
As you can imagine, as more and more new coins pop up on the market, more altcoin exchanges have begun to appear, but not all of them were able to measure up to our testing process. In fact, many newer exchanges couldn’t pass our first round of testing.
We’ve done all the legwork for you, so you can rest assured that our top three exchanges are the best of the best.
Not only do each of these exchanges have the solid rep that’s needed in the coin community, but they also offer some great features that make them very user-friendly. Want to learn how to make the same type of crypto trades that pro traders do? Then visit 1broker. Do you want to deal in a wider variety of the best coin on the market? Check out Binance. Need a user-friendly interface that makes it easy to invest and buy coin? Check out Coinmama.
We not only made sure each of these exchanges had a good rep in the community, and some of the top features, we also looked into their transaction fees. Newer exchanges often offer higher than average transactions fees and market their sites towards newbies who don’t know any better. We’ve chosen the best exchanges with the lowest transactions fees, best payment options, and a wider variety of coin so you can enjoy the best user experience possible.
Now, all that’s left is for you to decide on which coin you want to invest in.
Right off the bat, we recommend taking it slow and working on diversifying your portfolio before you sink all of your hard-earned cash into one type of cryptocurrency. And there’s some great strategy behind this that you can read about in our article on dogecoin to bitcoin.
Additionally, we decided we weren’t going to focus just on bitcoin like so many cryptocurrency sites do. Instead, we had the average trader in mind and decided to also check out the best altcoins on the market, giving you an in-depth look at which coins are on fire.
So, as you can see, our site has a lot to offer traders of all skill levels.
Now, let’s begin with a brief summary of the top exchanges we reviewed, starting with Binance.
The Binance exchange received our top rating as the best cryptocurrency exchange on the market for a variety of reasons. The site may not be the best choice for the beginner, but traders and investors with market experience will be able to take advantage of the site’s many features including the choice between the basic and advanced user interfaces. The site currently deals with more than one hundred cryptocurrencies and offers some of the lowest transaction fees around.
Coinmama is another favorite in the industry, and it has a solid rep with seasoned traders.
It’s also a great choice for beginners. It currently deals in two coins and offers a total of three payment options. This is a smaller exchange, compared to Binance, but it has some great features to offer that both the beginner and advanced investor can appreciate.
This site isn’t quite like the other two exchanges in that it deals with many markets including commodities, forex, and stocks, but instead of using cash, it relies on bitcoin. It also offers a wide range of innovative features designed to school the beginner in the ways of the market, teaching them how to make pro-grade trades. Really, we feel that this is one exchange that has a lot to offer traders of every skill level.
The Inner Workings of the Top Cryptocurrency Exchanges
The best cryptocurrency exchange is an easy to use online platform where you’ll exchange one type of cryptocurrency for another, such as exchanging bitcoin for litecoin, or bitcoin for USD. Basically, depending on the specific exchange you choose it can be as simple as a currency exchange or it can work more like a stock exchange.
In general, you’ll run across the following types of cryptocurrency exchanges:
- Traditional: This type of exchange works more like a stock exchange. A buyer or seller will make a trade based on cryptocurrency market prices. With this type of trading platform, the company often takes a small fee per transaction. Many traditional exchanges also allow the member to convert fiat currency into cryptocurrency.
- Direct trading: This type of exchange offers direct trades between the sellers and buyers. With this option, a seller will set the exchange rate, as opposed to fixed market prices.
- Broker exchanges: A broker exchange allows members to sell or buy currency at prices that have been set by a broker.
All About Cryptocurrency
If you’re new to the cryptocurrency world, then before you join a new exchange and give trading a shot, it’s important that you learn more about the inner workings of the cryptocurrency world if you want to make enough money per month to supplement your income.
So, what is cryptocurrency exactly?
It’s a decentralized digital currency that’s transferred peer to peer and confirmed in a public ledger known as the blockchain, using a process called mining.
The blockchain is what confirms all transactions. The identities of the sender are encrypted, but the receivers name is not. This public ledger uses many crypto technologies to ensure that the record keeping is legitimate. It also ensures that the corresponding digital wallet used is able to accurately calculate the balance. Additionally, a new transaction is checked by a miner to ensure that it only uses coins that are owned by the spender.
A cryptocurrency transaction simply refers to the transfer of digital coin between digital wallets. The transaction is submitted to the blockchain, where it will await confirmation by a miner. Once the transaction is made the digital wallet will use a type of electronic signature, which is encrypted in order to provide a type of mathematical proof that the currency was sent from the digital wallet owner. This type of transaction confirmation process can take as little as one minute or as long as fifteen, depending on the type of cryptocurrency you use. During this time, the miners will mine, confirming the transaction before it’s added to the blockchain.
How Coin Mining Works
So, what is mining, how does it work, and why do people do it?
As you’ve probably gathered, mining involves confirming transactions before they’re added to the blockchain. But it’s not a very straightforward process. In order to add a transaction, the miner has to solve a type of mathematical puzzle. Because it’s an open source, basically anyone can mine. The main benefit of mining is clarification that each transaction is accurate and legitimate. The miner is awarded cryptocurrency for their hard work once the block has been successfully added. This is known as the proof of work system.
Most types of cryptocurrencies will use a type of proof of work system. This system utilizes easy to verify mathematical puzzles in order to cut down on mining exploitation.
Choosing a New Exchange
If you want to sign up with a new exchange, your first step is doing a little research for each one and looking for feedback from past or present members. The exchange itself must have a flawless reputation. The last thing you want to do is sign up with an unknown exchange. In the recent years, there have been several instances in which an exchange unexpectedly shut down and didn’t refund its members.
If you’ve found an exchange that passed the rep check, next, take a look at the amount of trading volume they experience on a daily basis. The higher the trading volume, the more secure you should feel because it’s a major indicator of exchange activity. Additionally, you’ll also want to pay attention to the conditions of withdrawing or deposits. Take note of the fees and learn more about the types of payment systems that are supported on each particular platform.
For ultimate security and protection, ensure that the exchange you use offers two-factor authentication. This is typically the standard in the industry, but you’d be surprised to learn that many new or smaller exchanges don’t offer this feature.
With a cryptocurrency exchange, the quality of customer service really matters. Unlike the stock market which operates Monday through Friday and closes at the end of the day, digital currency trades happen seven days a week, twenty-four hours a day. This means a customer service team should also be available around the clock to address any issues or answer any questions you may have. Considering the complexities that come with trading in cryptocurrency, a live support chat is preferred over email, but unfortunately, the majority of exchanges can only be contacted via email. Fortunately, many customer service reps will promptly respond within fifteen to twenty minutes.
However, there are some major exchanges that do provide phone support, so if you feel as though you need to interact with a live person via phone or chat, keep this in mind when you’re narrowing down your choices.
If you’re a diehard bitcoin trader, you’ll find that there are many major exchanges that solely trade in bitcoin only. But if you want to broaden your portfolio and invest in leading altcoins, then the type of cryptocurrency an exchange offers will also be important. Some exchanges offer more than fifty cryptocurrency options, while others will offer only one or two. Again, this is something you’ll want to pay attention to before you sign up.
Ultimate Payment Methods
Payment options will also be important. Some exchanges are very limited in terms of what types of payment methods they accept. For some, the more payment method options available, the better.
On average, you can expect most exchanges to accept Skrill, SEPA, wire transfers, cash, debit card, credit card, Neteller, check, Paypal, Lava Pay, or OKPay. Often, the length of a transaction and the fees associated can be dependent on the type of payment method used.
When you’re purchasing a large amount of altcoin or bitcoin, you should buy the cryptocurrency using a bank transfer. Transaction fees will be much lower if you use a wire or SEPA transfer. However, while the fees may be lower, this type of payment option often comes with a longer transfer time.
Purchasing cryptocurrency with a credit card will often provide you with a much faster transaction time because these deposits are instantly verified, which translates to an immediate release of the coin. But the downside to using your credit card is the higher transaction fees.
Many traders often turn to Paypal for most of their cryptocurrency transactions. Using Paypal is a great choice for smaller amounts, but when you’re purchasing a larger amount of cryptocurrency, a bank transfer or credit card will offer lower transaction fees. Often, investors find credit card purchases to be the easiest way. While the fees are high, they’re not quite as high as when you purchase coin with Paypal.
The only way you can guarantee anonymity with a transaction is if you pay in cash. The associated fees will be much higher with a cash transaction, compared to a wire transaction, but many investors feel that these higher fees are worth it in order to keep their identity secret. This type of cash transaction is often done in person, which can be dangerous, and risky. Another cash option is via a Bitcoin ATM, but some machines do require the trader to submit identification.
Fees You Can Expect
The process of selling and buying cryptocurrency costs money. But unlike purchasing a bond or stock, cryptocurrency exchanges often charge a percentage and because of this, over time, purchasing coin can become very expensive. The fees charged tend to vary from exchange to exchange. On average, you can expect a one to five percent fee. Steer clear of exchanges that don’t clearly list their fees.
Cryptocurrency is traded on a market where investors and traders are both looking to sell or buy coin and because of this, it’s important to consider the amount of liquidity each exchange has. The term liquidity refers to the exchange’s ability to sell without significantly affecting the price, which can cause the price to drop. The more sellers and buyers on an exchange, the more liquidity that exists. But how can you determine how much liquidity an exchange really has? All it takes is volume. Check out some of the leading exchanges by looking at their trading volume.
Compare how much of the leading cryptocurrency has been traded by each exchange for the last month. Higher volume equals more liquidity.
Even though you’ll be executing trades online, you’ll still need to pay close attention to where an exchange operates. Some will operate only in the U.S. and Canada, while other will exclusively operate in Europe.
Why Invest in Cryptocurrency?
Over the past couple of years, altcoins and bitcoin have been getting more attention from investors and traders all over the globe. But why?
These currencies have proven that they can be a solid investment and one that’s protected against government inflation policies.
Which is one of the main reasons people use cryptocurrency to secure retirement funds or why others in search of a sure way to boost their monthly income have decided to try their hand at trading in the cryptocurrency market.
When you’re investing in cryptocurrency, there are many different approaches you can take, but each option will come with its own advantages and disadvantages, so it’ll be up to you to choose the right method.
- Buy and hold: By far, this is the most widely used investment strategy. This is because the cryptocurrency will have the potential to multiple in value over the next several years or months, which has been the case with bitcoin. Because of this, many investors buy as much coin as possible and hold onto them until there’s a significant change in value.
- Day trading: This strategy is mostly used by experienced traders and those who have time to closely follow the market on a daily basis, selling and buying based on current spikes and dips in the market.
- Bot trading: Trading bots are another great way to trade in cryptocurrency. However, if you haven’t done your research, using a bot to make your trades can be very risky, especially considering there are now many fraudulent bots on the market. However, if you can find a great program with a solid reputation, then using a bot can be a great way to make trades around the clock.
- Investing in a cryptocurrency fund: There are several platforms to choose from when it comes to investing in cryptocurrency. These investment platforms allow the investor to buy into the fund, which tracks some of the lead currency on the market. These funds can be a great way to receive more exposure to the market, however, investors will have to pay an annual fee.
Cryptocurrency Exchange Tips for Beginners
Now that you know more about how the best cryptocurrency exchanges work, what your payment options are, and the type of investment strategies you can use, it’s also important that you’re made aware of important key aspects of the market.
To start, coin is considered more volatile than commodities, bonds, and stocks. Because of this, it’s important that you use a level head when it comes to your asset holdings. In just a single day your portfolio can drop by more than thirty percent, then it’ll be up again by forty percent on the next day. So, it’s crucial that you don’t panic and begin selling off your coin when the numbers on the screen start flashing red. Just remember, big fluctuations in cryptocurrency prices are very normal.
Considering there is currently over one thousand different types of coin on the market, it’s going to be very hard for you to determine which cryptocurrency to choose. And when it comes to small cap coins versus the top twenty established coins, there’s going to be a major difference in terms of risk and return potential. The coins with the most potential are also the most popular. This will be reflected in their market capitalization and their price. Some of the top coins include ripple, bitcoin, dash, litecoin, and Ethereum. If you’re new to the market, we recommend you start your portfolio off with a popular coin instead of trying your hand at picking the next big thing. In the wider bitcoin community, smaller, unknown coins have received little traction. Most of your portfolio should be made up of bitcoin, in addition to altcoins with higher market capitalizations. You should only have a small percentage of your portfolio dedicated to promising small cap coin.
Make sure you do your own research before you dive in and buy small cap coin. There’s plenty of hype surrounding a different one each day, so try to avoid being sucked into the hype.
How to Avoid Being Scammed
Unfortunately, you’ll come across several scams in the cryptocurrency world. Because of the somewhat anonymous nature of some currency, scammers commonly prey on those new to the cryptocurrency market. The most common scam is called a high yield investment scheme. This scam promises high returns on a daily or weekly basis, but these are basically just Ponzi schemes in which the scammer will raise funds for a fake blockchain project, then they’ll take off with your coin.
Because of this, it’s more important than ever that you do your research before you use an investment platform or make an investment. This will help to ensure that the people behind the company or project have a stellar track record and a solid reputation.
In terms of security, it has become an increasingly important issue for individuals and companies all over the globe. Unfortunately, losing your coin due to operational issues or cyber attacks on an exchange is fairly common these days. Which is why it’s so important to keep your coin in a personal wallet for which only you will have the private key to. You can easily store your holdings in a paper or hardware wallet in order to keep them safe.
While cryptocurrency can be a very new and exciting way to invest, it also comes with high risks, so it’s important to research your options and tread carefully in the beginning.
The Best Practices to Keep Your Coin Safer
Cryptocurrency can be a great, useful, and easy way to move your money around, but even the best cryptocurrency exchanges, digital wallets, and processing systems can be susceptible to compromises. As a trader, you should examine the security features of every online service before you sign up. Additionally, it can also be important to adopt your own security practices.
In order to truly safeguard your account, there are several techniques you can use. But while these techniques can instill more confidence in cryptocurrency exchange security, these methods can have a negative effect on your trading experience.
With that being said, here are our top techniques to use to keep your coin safe when you’re dealing with an exchange:
- For trading, use a new PC and make sure you use top of the line antivirus software. Make sure you download antivirus updates and operating system patches immediately after they’ve been released. Additionally, on a regular basis, be sure to update your data to an offline storage site.
- Use Google Authenticator after you’ve registered with an exchange and have only one IP address whitelisted.
- When logging into an exchange, ensure that the two-factor authentication has been enabled.
- For private communications and trading, use a VPN.
- Never mention your personal email. When you sell or purchase cryptocurrency, an exchange will send a notification to your registered email. Freely mentioning your email address can compromise it, allowing a hacker to closely track your transactions and possibly even gain access to your account and digital wallets.
- Take the time to create a better email password. Refrain from using birthdates, the names of your pets, family members, or favorite movies, and instead use a strong password that contains special characters, and both lowercase and uppercase letters. Remember, most hackers get access to digital wallet funds via the investor’s email.
- If possible, avoid making important transactions using your phone or get a separate phone for trading only. When you make a transaction via an app, a cyber crook can hack the app and obtain important privileged information that will allow them to access private data.
- Never keep your coin on an exchange if you’re not actively trading. Instead, store it in a cold storage or digital wallet.
- For high-frequency trading, we recommend using a hardware wallet.
- Always remember that any reputable exchange will require a new user to verify their location and identify before they make a deposit.
- A reputable exchange will also provide cold storage evidence.
- Avoid trading with more than twenty-five percent of your coin.
- Become familiar with algorithmic trading.
Why You Should Diversify Your Trades
By diversifying your risks, you’re ensuring that your trading posture doesn’t have a single point of failure. We recommend using more than one of the top cryptocurrency exchanges. You should also use a decentralized direct exchange platform. Always invest in a variety of coins.
Next, make sure you’re current with the market. Visit dedicated discussion forums, examine charts, and keep track of the latest news in the industry.
Following Your Intuition in the Trade Game
Choosing the right exchange can be tricky. But by following our tips and strategies, there’s no reason you won’t enjoy a safe and profitable trading experience with some of the biggest hitters in the market.
If you’re interested in trying out a particular exchange, make sure you pay attention to how they react to price fluctuations. Some shady exchanges tend to crash with big price changes, but once they’re up and running again you’ll notice that your transactions were completed at a terrible rate.
Not only do you need a safe platform to trade on, you need one that’s reliable and supportive. End your relationship with an exchange if their customer service reps take a long time to respond to a helpdesk ticket, or if they give you unhelpful or poor feedback regarding your issue.
Before you trust an exchange with your coin, do your due diligence. The market is full of rogue services and pseudo coins. Always be more cautious than usual when it comes to new exchanges.
Every exchange is different, and every trader or investor will have their own set of goals.
The Benefits You Can Expect from Using Cryptocurrency
Fraud prevention: Because cryptocurrency is digital, it cannot be counterfeited. It also cannot be reversed arbitrarily by the sender.
Protection against identity theft: When you normally use your credit card, you have to give the merchant access to your full line of credit, even if the transaction is only for a few bucks. A credit card works using a pull basis, in which the merchant initiates the payment and pulls out the necessary amount. Digital coin utilizes a type of push mechanism, in which the coin holder simply sends the exact amount to the recipient with no additional information required.
Decentralization: Using blockchain technology, a global network of computers manage the public ledger that records cryptocurrency transactions. This means the cryptocurrency is managed by its network instead of a central authority.
Universal recognition: Cryptocurrency isn’t bound by transaction charges, interest rates, exchange rates, or any other types of charges from any country, and because of this, it’s used on an international level. And the result? It can save plenty of time and money that’s usually spent transferring money.
However, despite the many benefits that come from using cryptocurrency, it still has quite a long way to go before it can be used to replace traditional currency and credit cards.
The fact remains that many people still aren’t aware of cryptocurrency and those who are don’t know how it works or even how to use it. As more brick and mortar and online businesses begin to accept the digital currency, it will quickly turn into the go-to payment method of the future.
When You’re Ready to Buy Cryptocurrency on the Leading Exchange
After you’ve learned more about our top three cryptocurrency exchanges and you’ve decided to sign up, you’re finally ready to buy some cryptocurrency.
So, what’s the first step?
With the right exchange, buying cryptocurrency can be fun and easy. Just try to keep your expectations realistic. Don’t go in expecting to make your first million overnight. And make sure you only invest money you can live without.
Now, let’s get started.
First, you need a place to store your currency. A digital wallet will store your private key which will give you instant access to your funds. The key will also allow you to freely move across marketplaces. Just because you purchased litecoins from a particular exchange doesn’t mean you have to keep using that specific exchange. The private key will ensure you always have access to your cryptocurrency.
There are many different types of wallets to choose from ranging from hardware to digital. Digital wallets are basically apps that you connect to your bank account. There are several to choose from.
A hardware wallet stores the private key onto a secure device that looks like a flash stick. These wallets are considered the most secure option because it can be disconnected from the internet.
Creating your wallet is fast and easy. Exodus and Coinbase both offer great, versatile wallets. Signing up for a wallet usually requires an email address, your name, and a password. You’ll need to download the wallet app in either the Google Play store or the Apple store, depending on whether you have an Android or an iPhone. There are even some digital wallets designed for desktop use.
Once you’ve picked a wallet and an exchange, there’s nothing stopping you from signing up so you can start buying.
Next, visit the exchange you’ve decided to go with. Register with the exchange. The registration process can vary from site to site, but most will require your name, password, and email address. You can sign up for a two-step authentication process and have notifications sent to your phone as an added layer of security. Most exchanges will require you to connect the account to your bank account in order to pay for cryptocurrency.
Some exchanges will act as both a wallet and an exchange. Through the app you can trade and buy coins as well as store them. However, we don’t recommend storing your coins on an exchange, in order to protect yourself against hackers. Every leading exchange experiences several cyber-attacks throughout the day.
Now you’re ready to head to the buying section. Choose the amount of coin you want to buy. Pay attention to a site’s minimum and max cryptocurrency limits before you enter in the amount. Depending on the exchange you can purchase cryptocurrency with a bank transfer, credit card, Paypal, or even cash.
And that’s it, you’ve completed your first cryptocurrency transaction.
By now, you’re probably ready to head to one of these leading exchanges to try your hand at trading in the leading altcoins. Our guide was designed to give you a deeper look into how cryptocurrency works and what you can expect in terms of profit, user experience, and trading.
We hope our list of the top three best cryptocurrency exchanges has helped you to choose one that works for you, your budget, and your trading and investing needs. Remember, in the beginning, take it slow, pay attention to the market, interact with other investors in the cryptocurrency market on local forums, and don’t panic and sell off your coin the minute it fluctuates. Following our tips, and guide to cryptocurrency trading and investing will give you a solid foundation for a successful career and a safe and rewarding trading experience.