You may be familiar with a word that seems to be everywhere right now: Bitcoin. A digital currency that has taken the world by storm, it uses encryption techniques to both regulate the creation of its units of currency and to facilitate the transfer of funds.
What makes it so different from the traditional concept of money, and what is causing it to shake up the global banking systems, is the fact that it operates independently of any central bank and is beyond both the remit and the control of any authority.
In layman’s terms, and for those that aren’t particularly savvy- a Bitcoin is a form of electronic money that is not controlled by your government or your local bank. It is traded online using purely digital methods, and its value isn’t backed up by a traditional asset such as gold reserves.
But don’t worry, this doesn’t mean that it isn’t worth anything, quite the contrary- Bitcoin is one of the strongest currencies in the world and its popularity and the demand for stuffing your eWallet full of them, is increasing at a fantastic pace.
So, you have your Bitcoins stashed safely in your digital wallet, but what do you do next with them? Or perhaps you have set aside some “real money” that you want to exchange for some snazzy cryptocurrency- where do you start?
That is where cryptocurrency exchanges come in. To discover what an exchange is, what it does, and to read about the top 10 cryptocurrency exchanges for Bitcoin, scroll down to find out more!
What is Cryptocurrency Exchange
Quite simply put, a cryptocurrency exchange is a business which allows customers and holders of a range of digital currencies to trade them for other assets.
These other assets can include “real money”, otherwise known as fiat money, or other digital currencies such as Ethereum, IOTA, Dash, Ripple, and of course, Bitcoin. A cryptocurrency exchange can act as market makers that take bid/ask spreads as a type of commission on each transaction, or they request a fee based on the amount you are exchanging or trading.
Otherwise known as DCEs, they can come in the form of traditional “bricks and mortar” businesses which offer traditional payment methods as well as digital currencies, or in the shape of online businesses which deal with the transfer of electronic money and digital currencies.
Because of some of the controversy surrounding digital/virtual/cryptocurrencies, many of these businesses tend to operate outside of Western countries to avoid interference from countries that have not yet legislated for or created framework for these types of currencies.
Transactions can often be completed via credit card payment, wire transfers, and postal orders, and may offer the ability to convert digital currencies into balance on a prepaid card which can then be used to withdraw at cash machines worldwide.
It is often the case that the cryptocurrency exchange is a separate entity from the creators of the digital currency, and in fact often, the creator of the coin only administers the clients account and do not provide the cryptocurrency directly to customers.
The usual procedure is to find a cryptocurrency exchange, purchase the currency of choice through them and then have the balance transferred to the customer’s digital currency provider- administrated account.
To cut a long story short, if you are planning on getting involved in the exciting world of cryptocurrency, then you need to find yourself a good cryptocurrency exchange to help you get your foot in the door.
What to Look Out for Before Joining an Exchange
As with almost everything on the internet, not all cryptocurrency exchanges are created equal, and you will find that some are a lot better than others. While the currency might be digital, the cash that you part with to exchange is very, very real. For this reason, you need to keep your wits about you and make sure that the exchange you are putting your trust in, does what it says on the tin.
Liquidity
There is no shortage of exchanges out there, so knowing what to look for before you sign up is important. The first thing you should consider is the liquidity of the exchange provider. Liquidity means the ability for the exchange to be able to sell without an adverse impact on the price which in turn would cause it to drop. The more customers that are buying or selling, the more liquidity that exists within the exchange.
Fees
Fees are also something that you should consider before you settle on a particular exchange. Remember that nothing good comes for free and that trading currencies cost money. Ideally, you want to look for a fee structure that operates on a sliding scale based on the volume of currency that you are trading. Be sure to look out for special offers and incentives as well, as any exchange worth its salt will be keen to not only attract new customers but to retain existing ones as well.
Location
It is also worth considering the location of the exchange. While we have said that many of them exist outside of Western countries, you should still exercise a bit of caution and common sense when deciding which one to plump for. An example would be, if you have the choice between an exchange in Japan or one in say, Nigeria, common sense would suggest that it might be better to go for the slightly more reputable jurisdiction.
Available Cryptocurrencies
Other things to bear in mind are what currency pairs are available (e.g. bitcoin for USD, EUR, other fiat currencies, or other digital currencies), and of course, how secure the site is (your browser or a simple Google search will let you know that).
The Best Cryptocurrency Exchanges for Bitcoin
So now you know what bitcoin is, what a cryptocurrency exchange is, and what to look out for when selecting your service provider of choice- now it is time to take a look at our selection of the top 10 cryptocurrency exchanges for Bitcoin.
With so many on the market, it can be rather like looking for a needle in a haystack but do not fear; we are here to give you a guiding hand. So, without further ado, let us look at number 1.
#1 Coinbase
Coinbase is the world leader when it comes to Bitcoin, and in fact, it is also the world’s largest. Its services are available to customers in the UK, USA, Canada, and most Europe. Upon signing up, you can purchase your Bitcoins via your bank account, your credit or debit card, SEPA transfer, or various other payment methods depending on your location. With high liquidity, a solid brand name and reputation, and an excellent security record, you can’t go wrong with Coinbase.
#2 LocalBitcoins
If you are looking for a great peer-to-peer exchange for your Bitcoin, then LocalBitcoins will tick all of your boxes. Trade terms are agreed between each buyer and seller, and LocalBitcoins oversees to make sure each trade goes smoothly. A great option for those looking for a little privacy, it also offers a great selection of payment options, and there are no buying or selling limits imposed by LocalBitcoins meaning that you can trade away to your heart’s content.
#3 Coinmama
If you want to add an extra layer of security to your purchase and you prefer to use a credit card to buy your Bitcoin, then Coinmama is built especially for this purpose. Based in Israel, they service clients from every corner of the world, and one of the most lauded parts of their service is the great attention they give to customer’s questions and queries- an important factor for those just starting out.
#4 CEX.IO
Offering the purchase of Bitcoin with low fees (if you are using your credit card), you can also benefit from zero costs if you are buying via bank transfer. With availability in most countries worldwide, they take verification seriously which should put your mind at rest when it comes to safety and security.
#5 Wall of Coins
Another great peer-to-peer Bitcoin exchange provider, Wall of Coins provide customers with a great step-by-step guide to the whole process which means it is a great place to start for newbie Bitcoin traders. If you are receiving cash, you can use any payment method you so desire, but if you are buying, you can check out their list of accepted methods. The most popular way of depositing cash is by physically going to a bank branch and depositing money into the account holder of the person selling you Bitcoin.
#6 Bitfinex
Licensed in Hong Kong, Bitfinex also offers a global BTC trading desk which is perfect for handling large Bitcoin transactions. It has a great selection of payment options (they prefer wire transfer), and they only charge a deposit fee. With no limits on how much you can trade, as long as you are properly verified, they benefit from an excellent reputation. Bitfinex is a leading exchange for USD Bitcoin trading as well as leverage trading.
#7 Changelly
Offering both Bitcoin and altcoin exchange services, Changelly allows customers to switch between coin types without actually depositing any to the exchange itself. While the fees are slightly higher than some other altcoin exchange providers, it is a highly convenient and efficient service. With payments accepted in any cryptocurrency, as well as debit card and credit card, Changelly is available to customers in any country worldwide.
#8 Coinhouse
Operating out of Paris, France, Coinhouse allows its customers to purchase their Bitcoin with a 3D credit or debit card, or even with Neosurf prepaid cards. A big plus point with Coinhouse is that after you are verified, the delivery of Bitcoin in instantaneous and the fees range between 6%-10%.
#9 BitPanda
Based in Austria, BitPanda offers a great selection of payment methods and reasonable fees that are included in the price. Customers can use bank transfer, debit or credit card, NETELLER, Skrill and various other methods to purchase their Bitcoin and the only drawback is that while it is available to clients all over Europe, it is not available for US Bitcoin punters.
#10 Kraken
San Francisco based, their focus is not just the purchase of Bitcoin, but rather the trading of them as well as other altcoins. Boasting better than your average customer service, an easy to use website, and an XBT/EUR pair volume of around 3k on an active trading day, they are most definitely worth a look.
Conclusion
The choice might well seem a tad overwhelming, but armed with the know-how provided in this article, along with our suggestions on a few reputable cryptocurrency exchange providers to check out, you should have enough knowledge to at least start dabbling in the world of cryptocurrency and Bitcoin.
There is no doubt that these currencies have revolutionised the way we look at money, and one thing is for sure, and that is that Bitcoin is going nowhere. With its value increasing on an almost daily basis, if you haven’t already taken the leap and purchased yourself some new-fangled cryptocurrency, then we suggest that you strike while the iron is hot.
We recommend checking out a few of our top 10 best cryptocurrency exchanges for Bitcoin and seeing which one suits your needs.
Depending on how much you will be buying, selling, or trading, where you are based, and what payment methods you have available to you – you will be sure to find a service that ticks all of your boxes. Just remember to keep your eyes open, exercise some caution, and be responsible.
But most of all, don’t forget to have some fun as you become a part of the digital currency revolution!
Have you tried any of them already and have some feedback? Let us know in the comments below!
