Exchanging with an exchange – What are they for and what are your options
What is an exchange? A cryptocurrency exchange is where you buy/sell/trade cryptocurrency with others. Lets say you have 100 Ripple (XRP) coins in your exchange wallet. Ripple shoots up a couple dollars over the course of a few weeks and you want to move your money to another coin Ethereum (ETH) you’ve been keeping your eye on. You sell your Ripple on the exchange trading it for Bitcoin (BTC). You then use your newly acquired BTC to purchase the Ethereum coin you’ve always wanted. Some exchanges have a paring of one coin to another. So instead of the above scenario you can just exchange the XRP for the ETH without going through BTC. To handle this transfer of coins the exchange may charge you a fee to complete the transactions, usually in a percentage like .01% or .25%.
“So what exchanges are out there and what do they offer?” You like to get right down to business, I like that! Good questions to ask before joining an exchange:
- Is there a higher volume of trades? Can’t trade if the exchange is not active.
- What coins does the exchange support? Each exchange supports a different number of coins.
- What are the fees per transaction? This could eat into your profits.
- How user friendly are they? You don’t want to be confused.
- Is chart analysis available? Important for chart junkies like myself.
- Has the exchange ever been hacked? If so, was security beefed up?
Here is a list of a few of the more popular cryptocurrency exchanges.
|Exchange||Location||Fees||# Coins||Friendly Level||Analysis|
|Bittrex||Las Vegas, USA||.25% / transaction||100+||Intermediate||Bittrex offers a lot of coins, has comparable fees and is continuing to work on development. Fund your account with BTC.|
|Coinbase||San Francisco, USA||.01% / transaction||3||Beginner||Coinbase offers a BTC, ETH and LTC, has low fees and allows you to fund your Coinbase account from your bank account or credit card.|
|Kraken||San Francisco, USA||0.0 – .25% / transaction||~20||Intermediate||Kraken offers a list of the more popular coins, has comparable fees in a tier format depending on the volume you trade and ability to fund your Kraken account from your bank.|
|Poloniex||Wilmington, DE, USA||0.0 – .25% / transaction||100+||Intermediate||Poloniex offers a list of the popular coins, has comparable fees in a tier format depending on the volume you trade. Fund your account with BTC.|
Regardless of which exchange you choose to trust with your cryptocurrency be sure to do your research. Exchanges pop up all the time that are not full developed, bury users in fees, take the users money and/or have no customer service. Stick with well known exchanges that have a good track record and reasonably meet your needs.