Important Characteristics of Bitcoin Exchanges

February 8th, 2019

Important Characteristics of Bitcoin Exchanges

The number of bitcoin exchanges has significantly increased since over the last couple of years. It is no surprise that more people are willing to venture into this industry. A bitcoin exchange provides crypto users a platform to trade their crypto for crypto or crypto for fiat currencies. However, it is important to take precautions before you select the correct Bitcoin exchange for your personal use. 

Firstly, you will need to identify where you want to do your business. You will need to study the environment and establish if the people within the region are open to crypto use. If you are in the United States, theres an abundance of crypto exchanges now available. However they are all differnet. 

The next step is to determine what regulations and legal processes these bitcoin exchanges follow. Do they ask you for an ID? Do you need to show source of funds. Depending on the amount you wish to purchase, there could be different tiers of verifications. Common regulations include Anti-money laundering (AML) laws and Know Your Customer (KYC). Others include getting licensing and registering the exchange with relevant authorities.

In recent days, many exchanges have had to shut down for failing to comply with the set regulations.

Another thing to consider is liquidity. All exchanges need liquidity to operate successfully. Having liquidity helps your customers trust your business in order to place orders and make deposits on your exchange.  Is this a reputable exchange? Are they well talked about? Are they known in the media?

Probably the most important item about a bitcoine exchange to a consumer is how fast they receive their coins. Some exchanges take 5-7 days to receive bitcoin. Others such as Bitcoin of Americawill offer you a same day settlement and you receive your coins the same day. It is also important to see if there is a customer service option. The worst thing is having an issue or question and having to wait 72 hours for your matter to be resolved. Some exchanges such as Bitcoin of America have live customer service and email support which makes matter so much easier. 

Lastly, you will need to ensure your bitcoin exchangeis secure. They should have top-notch security. Security is essential in protecting your customer’s funds from attacks.  Any breach on their platform can be extremely catastrophic because Bitcoin exchanges can end up losing all your funds leading to closure and legal actions.

This disclaimer informs readers that the views, thoughts, and opinions expressed in the text/sponsored content belong solely to the author, and not necessarily to Bitcoin of America, organization, committee or other group or individual. All investments are at your own risk and should be done after careful research.

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