Having a good knowledge of how you can buy Bitcoin is an important step when commencing the business of digital currency. But knowing the Bitcoin exchange to use is another important step. Because you will be investing your money in Bitcoin as well as the exchange where you will buy from, you need to ensure that you choose a reliable platform.
In this article, we will look at the things you need to consider before deciding on which Bitcoin exchange to use. But first, there are a few things you need to know about Bitcoin.
What Is Bitcoin?
It is a currency that facilitates the payment of goods and services. However, it is quite different from the traditional currency in the following ways:
- The currency is decentralized, which implies that the government or central bank cannot control it.
- It is a digital currency. You cannot find it in form of physical bills. It lives online and is tracked via blockchains. You can track each time the currency changes hands.
- It is pseudo-anonymous. Rather than using your personal information, Bitcoin uses a wallet ID, making it completely anonymous.
Furthermore, the currency was created in 2008 by Satoshi Nakamoto. The developer published a paper that discussed how the currency will work. One year later, the coin was being mined and traded. You can go to https://rubix.io/btc-exchange to find more useful information on Bitcoin trading.
More people are attracted to Bitcoin because of the absence of middlemen and heavy bank charges. Due to the fact that all transactions are done online, you only need your wallet ID, not your real name or other identification information, except you decide to give it.
Tips for Choosing a Bitcoin Exchange
Here are the things you need to consider when choosing a bitcoin exchange:
1. Which Country Is the Exchange Located?
The first thing to consider is where the exchange is located. This is due to the fact that the rules and regulations for buying Bitcoin vary from country to country. It is usually recommended to buy bitcoin from an exchange that is located within your country.
They can accept different currencies irrespective of the exchange being located in your country. Ensure you read the terms and conditions of each exchange to know what currency they do or do not accept.
2. How Can You Purchase the Currency?
You can purchase the currency with your credit card, cash, wire transfer, and PayPal, among others. Check out the options that are available on the exchange platform and use the one that is most convenient. But you have to consider your level of privacy. For instance, cash payment may offer more privacy than paying with a credit card.
3. What Are the Exchange Fees?
You need to find out if the exchange fees are considerate. They do not have to be outrageous when compared to the fees of other platforms. However, you need to note that fees can change over a certain period and can differ from one exchange to another. There are exchanges that charge extra fees in addition to the bitcoin transaction fees.
4. What Is the Volume of the Order Book?
Exchanges that have a good customer base usually publish an order book. This book is just a list of buying and selling orders that have been offered on the platform. A high order book volume indicates that people are actually using the exchange and it has liquidity.
If exchange does not publish an order book, it does not mean that it is not legit. It may be that it is yet to have that function and/or it has a smaller order book volume than bigger exchanges.
5. Is the Exchange Transparent?
A transparent exchange will publish audit information or cold storage addresses that you can use to verify their Bitcoin reserve. Audits are an excellent way for exchanges to prove to their customers that they have liquidity, are capable of covering all exchange sales, and are not operating fractional exchanges.
6. Is It Secure?
You need to ensure that the platform is secure. Check if the site is HTTP or HTTPS. HTTPS is a secure protocol of HTTP. You also need to check if the exchange offers a secure login alongside a two-factor authentication. You may want to read this article to know how to secure your Bitcoin.
Bitcoin is becoming really popular in the world of cryptocurrency. But you need to find the right exchange to ensure that your transactions are completely secure. You can use the tips we have shared in this article to find a reliable platform.