Heads up: This article was commissioned as a part of the Adam Rush Project. It was an experiment I did a few years ago to see if having books written by ghostwriters would be commercially viable. It wasn't. That said, the following article was written by someone else and not yet edited to my standards. I hope to find time to rewrite it myself in the future, but for now, read with caution.
Disclaimer: In this article, I discuss financial topics. These are my personal thoughts and opinions. I am not a financial advisor, and none of what you read here is financial advice.
As a newbie in the world of bitcoins, you will find many exchanges and wallet options competing for your business. Some of them are high-end platforms for institutional traders. Others are straightforward wallet services with limited capabilities for buying and selling.
Most of these exchanges include sophisticated wallet systems that can store all your digital and fiat currencies, just like your traditional bank account. In this regard, exchanges are probably your best option for simplicity. They are also a viable option if anonymity is not your primary concern. Many of them have long setups that involve proof of identity and supplying detailed information about your contacts. It is the law in most countries. Choosing the best exchange option will also depend on your particular location.
Because bitcoin is a global phenomenon, different web-based cryptocurrency exchanges are popular depending on where in the world you live. Bitfinex is popular in Hong Kong. Coinbase is the biggest exchange in the United States. CoinSpot is big in Australia. The best way to find an exchange suitable for your needs is to do some research on your own or ask others what they use.
As we discussed in the previous chapter, the easiest way to get started with bitcoin is with Coinbase. Their site is comprehensive and intuitive. Fees cost around 1%. They provide bitcoin wallets for customers and make it easy to fund the wallets. You can use BitStamp to trade with other investors. These two sites are set up to help bitcoin beginners. As you become acclimated to the world of bitcoin, there is a world of possibilities. It’s those possibilities that make cryptocurrency trading exciting.
Choosing the right bitcoin exchange is a personal choice. Each user has individual needs. When choosing an exchange to use, consider these factors:
- Country of origin
- Payment methods for making deposits and withdrawals
- Speed of transactions
- Reputation
- Security practices
Besides Coinbase, here are some of the more popular exchanges:
Gemini is an exchange operated by the Winklevoss twins. It operates in 42 states and several countries. They recommend you start with Coinbase before moving on to them, as they can be confusing to follow. They need a bank verification and identity before you can begin trading. With Gemini, customers can make deposits allowing you to buy bitcoins at a locked-in price.
The Kraken is a global exchange that has superb liquidity so you can buy large quantities of bitcoins. Their fees can be quite confusing, but the ordering process is relatively simple.
LocalBitcoins is a bitcoin exchange where investors exchange with each other. The buyer and seller communicate with each other on the trade. LocalBitcoins ensures a smooth transaction for everyone involved. LocalBitcoins is the best choice for making private transactions or dealing with cash.
CoinMama uses a bitcoin broker to handle exchanges. The broker uses the customer’s credit card to sell bitcoins to anyone on any continent.
CEX.IO exchange charges a low fee for customers to buy bitcoins using their credit card. Or you can buy with a bank transfer for free. They service most countries.
BitQuick allows its customers to buy bitcoins with cash only using cash deposits.
Coinhouse allows customers to buy bitcoins with debit cards or credit cards. Their headquarters are in Paris, France, and they serve the majority of Europe.
BitStamp has been one of the longest-running exchanges. Again, it’s an exchange for buyers of large quantities of bitcoins. Also, the fees tend to be higher than those of other exchanges.
Bitfinex is a popular exchange with the very good liquidity. However, it is not open for U.S. citizens. Though it has a complicated interface, it’s a top choice for traders who are competent in this kind of trading. It is popular because no verification is necessary for those who deposit with cryptocurrency. Their fees are comprehensive and low.
Circle is another platform like Coinbase. It lets users across the globe store, receive, send, and exchange bitcoins. But right now, only the US citizens can link their bank accounts there for depositing funds. This platform has applications for both iOS and Android. Likewise, they also offer credit and debit card facilities.
Xapo Bank is a leading agency for providing wallet and bitcoin debit card services. They currently offer deposits in fiat currency that can be converted to bitcoins.
CoinJar is another exchange and wallet providing a platform for bitcoin. It is currently the market leader in Australia.
Article Summary
- Cryptocurrency exchanges allow people to trade cryptocurrencies.
- Most exchanges also provide wallet services for storing your cryptocurrencies.
- Start with Coinbase to familiarize yourself with how exchanges work.
- Once you’re comfortable with trading bitcoin, you can explore other exchanges and altcoins