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How to pick the best cryptocurrency exchange: Industry experts weigh in

Tony Zerucha

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Every week brings news of some sort of cryptocurrency exchange making its debut. Not all will last nor are they all equal. What should investors be looking for when selecting a cryptocurrency exchange?

A quintet of industry experts share advice including the importance of self-education, the quality of a site’s investor verification, and obtaining a proper hardwallet. Read more below.

Max Kordek, co-founder and CEO of blockchain application platform Lisk:

“There are many things to consider before choosing an exchange to invest in. But the main piece of advice I would offer traders is to broaden your knowledge on the space before diving in. Make well-informed decisions, not hasty, speculative moves.

“While the hype around certain cryptocurrencies may be hard to ignore, it is sensible to adopt a more measured approach. For new or inexperienced traders, I would encourage them to take the time to develop a robust understanding of an exchange’s operations and thoroughly examine the processes they use to vet and verify their users. This information will be invaluable to prospective traders keen to make smart trading decisions.”

Frank Wagner, co-founder and CEO of INVAO, a blockchain asset pool:

Frank Wagner

“I believe that when looking where to invest, it’s important to consider the exchanges’ verification requirement process. Although most exchanges do require some sort of ID verification in order to complete a transaction, some allow users to remain anonymous.

“Although verification can be a timely process, taking two to five days to complete, this step is essential in protecting the exchange from scams or money laundering schemes. At the end of the day, security should be a user’s top priority – and it’s well worth the time it takes to ensure your information is safe.”

 

Learn more about INVAO in this NXTAlpha interview with Mr. Wagner.

 

Casey Kuhlman, co-founder and CEO of Monax, a blockchain and smart contract software technology company:

Casey Kuhlman

“The biggest piece of advice I can offer potential investors is to do your research – only invest in exchanges that are both trustworthy and credible. There are a lot of reliable sources out there that offer comprehensive reviews and compare the security features of different exchanges.

“I’d also advise users to backup their data to offline storage sites on a regular basis. As with all transactions done online, I would recommend using a VPN – virtual private network – to trade, as this will ensure that these transactions are completed as securely as possible.”

 

Craig McGregor, co-founder and CEO of DSTOQ, a tokenized security exchange:

“As cryptocurrency exchanges gain in popularity, it is increasingly important that users understand how to invest securely. I would recommend that first time investors in particular look into the difference between centralized versus decentralized exchanges. While centralized exchanges may be more common, ultimately these exchanges are in control of a trader’s funds as well as their private information. Decentralized exchanges offer users more transparency and control over their transactions. By removing the need for a third party to hold the user’s funds, decentralized exchanges are more resilient against security breaches.”

Learn more about DSTOQ in this NXTAlpha interview with Mr. McGregor.

Nicolas Gilot, co-CEO of blockchain-powered gaming distribution platform Ultra:

“There are a number of factors investors should take into consideration in advance of partnering with an exchange namely; research, reputation, and security.

“Regardless of whether you are a new or experienced trader, it’s important to do your research and understand the different blockchain exchanges and which one provides an optimum fit for your needs. Reputation plays an important part when it comes to partnering with an exchange but it can be easy to get caught up in the blockchain buzz. Separating hype from reality and making informed and well-thought-out decisions is key here.

Nicolas Gilot

“For seasoned traders, or those dipping their toes into the world of investment for the first time, security should always be a top priority. Take your time when creating your account; make sure you provide all the correct information, and put an email you have access to and that can be easily recovered. When your account creation is done, activate the two-factor authenticator as your account security is much weaker without it. Also remember to bookmark the website — don’t search for it on Google.

“If you plan to buy a substantial amount of crypto, you should get a hardwallet such as Trezor or Ledger. It’s a must have. Don’t store your coins on an exchange regardless of their reputation.”

Learn more about Ultra in this NXTAlpha interview with Mr. Gilot.

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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