Not all exchanges are created equal. Some only list bitcoin and possibly a few other cryptocurrencies, while others may have over a hundred listings. There are exchanges that allow you to fund your account (often meaning to buy bitcoin first) using one or more of the following: linked bank account, Interac, debit card, VISA, MasterCard, e-Transfer, bank wire or draft, money transfer, Flexpin, SEPA, Payeer, OKPAY, and more. Other exchanges don’t have any type of fiat funding, and only allow listed cryptocurrencies to be transferred in. From there they can be exchanged for another cryptocurrency or used in trading.
- What are you buying bitcoin for? Is it an investment, or do you plan to participate in active trading? Did you buy it in order to exchange it for other cryptocurrencies? If so, you will need an exchange that sells the different currencies you want. Do you want, or need to be able to deposit money directly into your exchange account? Not all exchanges have this option. If you bought it to actively trade cryptocurrencies, check to make sure the exchange has the trading features you want such as stop-loss or limit orders and margin trading.
- Where is the exchange located? Your location may limit you from opening an account in certain countries. Are you comfortable with where it’s located?
- Is the exchange regulated? If an exchange is operating in a country that requires regulatory compliance, it is a lot less likely they will ‘disappear’ with the bitcoin in tow. If you had to verify your identity with government issued ID, they are likely following some sort of regulations.
- Does the exchange have a good security record? Check out how they keep customer deposits of cryptocurrency safe? How have they handled security breaches in the past? Do they offer any guarantee? Are they insured?
- Is customer service important to you? Some exchanges fail brutally in this department, so if you are new to the industry, you may want to stick with the exchanges that are a little more helpful.
- Internet search – Once you narrow it down to exchanges that suit your location and trading needs, a lot of questions can be answered with a google search. People that have been burned by exchanges with poor customer service, security issues, missing funds etc, are very vocal with their displeasure!