Understanding of cryptocurrency exchange:
Cryptocurrency Exchange is similar to commodity or stock exchange in modality. However, cryptocurrency only deals with virtual currency which is completely decentralized till today. Cryptocurrency Exchange is a legit or regulated exchange in a particular geographic place. However, trading can be carried out from any corner of the world because the only requirement to trade cryptos is active internet connectivity, fiat currencies, wallets, and just a trading platform.
An exchange working model:
- The first step is to choose a cryptocurrency exchange and deposit fiat currency into a specific account.
- Once the currency is being deposited, then you can open trading software and place the order to buy cryptocurrencies as per the availability of market depth.
- After buying, the cryptocurrencies can be stored in your digital wallet.
- The exchange takes a small portion of cryptocurrency for the overall transaction, matching orders, as well as for security.
Requirement for research: There are numerous frauds and scams going on around, and it is advisable to make research to avoid such negative impacts. Here are some reasons that prove the importance of research.
Money is very important for any investor and there are possibilities for the money to get scammed and losses. Therefore, it is important to choose a research reliable cryptocurrency exchange for trading cryptos.
There were so few cryptocurrency exchanges that could not sustain or hold their services for a long time, and it is cost incurring for any traders to shift the cryptocurrency exchange. We should choose an exchange that has been running for years so we can get consistency for our long-run cryptocurrency plan.
- Legitimacy :
This is one of the main reasons to research cryptocurrency exchanges because non-legitimated exchanges may cause the chances of scam in near future. We need to find a registered and legitimate cryptocurrency exchange to execute trades.
- Safety and security:
Cryptocurrency trading must be safer and fully secured from any kind of online cheating, fraud, fishing, and scam. It is important to check the security features of trading platforms and wallets. It would help if they have an online and offline wallet facility as well as two factors (2FA) of login. It helps us to avoid online fraud.
Benefits for research before choosing any cryptocurrency Exchange:
There are so many advantages of making thorough research before choosing a cryptocurrency exchange and the above-discussed points clearly explain its importance. Additionally, listed below are some more benefits of researching before choosing a cryptocurrency exchange.
- It will help us to get branded cryptocurrency exchange where we can trust for our investment decision.
- We can get a wide range of cryptocurrency pairs and it will extend our choice of trading pairs and additionally, we can make good portfolios as well.
- We can compare the best services, responding time, and inquiry opportunities. During the research, we can find our answers from different exchanges to analyze the best among the rest.
- We need to compare the cost of transactions and to find the cheapest one on similar ground. Also, at the same time, we can invest a few more money in the best services and products.
- We can check if the transaction is peer-to-peer confidential or not. There should not be leakage of information to any of the third parties.
- We can compare and find the fastest transaction time-based services so it can save our waiting time.
- We can find the Payment gateway for buying and selling the cryptocurrency and check the suitable one for ourselves.
- One of the important things is liquidity for our trading cryptocurrency. More liquidity means more chances of good trading.
- We must find any hidden cost which we may have to pay during or after the transaction of cryptocurrency.
The above-mentioned points clearly explain the benefits and importance of research before choosing a cryptocurrency exchange. Therefore, it is a big yes to research before choosing a cryptocurrency exchange. This sector is still on the young stage, and there is a long way to go. There are so many questions that require answers for making good investment trading decision and to safeguard our fund and have the return of investment.