While there are only a very few places to actually buy crypto with cash, there are tons of places to trade your crypto. Although there are many options to choose from, you must also understand how unsafe many of these exchanges are. One critical, critical thing that I did not fully understand when trading my first crypto:
When you transfer your crypto coin to an exchange, you are using their wallet, not yours.
I can’t focus on this enough. When an exchange has your money, this money is no longer in your control but sits in a temporary place on their server. If this server is to get hacked (has happened a few times before) you can lose your money.
Let’s talk about the three biggest things to think about before you choose an exchange is:
What are the transaction fees?
When I first started trading, I was a little upset about this. I thought the benefit of crypto currency was no middle-man, and therefore no transaction fees. While the transaction fees aren’t terribly bad, you must first do your own research on the small print. Some exchanges charge on every trade you make. Some charge when you put your money into the exchange. Some charge when you take money out of the exchange. To help with this, I made a super nifty page to at altcoinatlas.com/exchanges to help you figure out what exchange works best for you.
Side note, there are some decentralized currencies with no middle-men or transactions fees at all. These are less used right now, but my hunch is they will grow in the coming years!
What is their total volume of transactions?
Some exchanges are small, and only have a few hundred people using the service. Some are big and have millions of transactions a second. While the smaller exchanges can be useful to snatch up some of the smaller coins nobody knows about, many times it takes longer to trade a coin. If you are wanting to make multiple transactions a day, it is probably best to find a large volume exchange. Go to coinmarketcap.com/exchanges to view trade volume.
How reliable and trust worthy are they?
Ever see those off-brand shoes at Wal-mart that kind of look like Jordan’s, but then, not at all? This is how exchanges are. People are more willing to be a part of a trust worthy and reliable brand, even if it means paying a little more. In general, the exchanges that have been around longer are more trust worthy, but please keep updated on altcoinatlas.com/exchanges as I will continue to rank these companies.
You are now good start trading your way to your first millions, or divorce. Before you jump into the fire, there is some strange lingo the cool kids in crypto use when trading. In the next section, we will cover what these words, acronyms, and phrases mean.