Which Crypto Projects to Pay Attention in 2020
From peer-to-peer to decentralized and retail cryptocurrency exchanges, there are more than 200 different trading platforms available on the market. With such a great number of sites offering buy and sell crypto services, knowing how to pick a cryptocurrency exchange turns into a real necessity.
Despite the fact that security considerations have considerably advanced after the Mt. Gox attack in 2014, the number of fraudulent exchanges is growing exponentially. Nearly 1 Billion US dollars were stolen from various cryptocurrency exchanges and banks due to a hack, fraud, or other unexpected events. For example, in 2019, the crypto community was shaken by the so-called “Quadriga breakdown”. Gerald Cotten, the head of the most influential Canadian Bitcoin exchange Quadriga has died prematurely and never revealed private keys worth nearly $250 billion. The exchange was closed and thousands of users never received their digital funds back.
Thus, there are various aspects and details to address when thinking how to pick a cryptocurrency exchange. When talking about crypto security standards and regulations, we also recommend users to get an offline wallet to secure your cryptocurrency savings in a long-term perspective.
Most crypto beginners are unaware of how to cautiously trade, which amounts to deposit and what are the crucial characteristics of a trustworthy crypto exchange. We are here to help you.
Essential features to remember
Getting to know how to choose cryptocurrency exchange is undoubtedly a stressful and complicated process that requires a lot of time and attention. Below we will describe the most important factors that will help you to trade your digital assets safe.
Geography and law
Your user experience with a particular cryptocurrency exchange will heavily depend on its geographic position and existing legal restrictions. Most exchanges offer a defined list of countries that they are authorized to work with. Thus, whatever cryptocurrency exchange you choose, it is necessary to ensure that the country of your residence is included in its list and it is legally permitted for you to use its trading services. There is always a possibility that your country has taken serious measures against cryptocurrency trade and thus eliminated your right to use certain platforms.
Is cryptocurrency trading legal in my state?
In most cases, the accessibility of various trading sites relies on the following factors:
- Does the exchange or platform has ensured appropriate license and documentation, and
- Your country’s specific legislative background regarding cryptocurrencies and trading.
For instance, Binance, the biggest US-based cryptocurrency exchange, is available to buyers and sellers from all countries excluding those placed in the US sanctions list (Syria, North Korea). Due to the fact that the cryptocurrency industry is highly volatile and underregulated, there are many cases of exchange platforms unjustly confiscating or freezing users’ funds. Thus, it is advisable to start using an exchange geographically based in a region that you are familiar with and can seek legal protection if needed.
Liquidity and daily trading volumes
One of the main indicators of a trustworthy cryptocurrency exchange is its large trading volumes which signify about liquidity and better capability to fill customers’ orders anytime. Liquidity is undoubtedly an important indicator that directly impacts users’ ability to trade cryptocurrencies. Centralized cryptocurrency exchanges usually have greater liquidity and extremely high daily trading volumes. They are generally recommended for traders who are looking for BTC/ETH or any other influential cryptocurrencies trading. Decentralized cryptocurrency exchanges are typically used for ERC20 tokens trading and thus have smaller trading volumes.
Support and security
With numerous hacking attacks and scams taking place on the cryptocurrency market, security and privacy should be your key priority when deciding on how to choose the cryptocurrency trading platform. Even though centralized exchanges are very reputable, they also attract a great number of phishing frauds and hackers. As soon as they crack passwords and access a crypto account, the reward is expected to be colossal. Moreover, they can immediately trade or get rid of their newly appropriated funds through the same exchange. With an emphasis on anonymity and privacy, decentralized exchanges have claimed to have improved their functioning and protection mechanisms. They give traders an opportunity to execute crypto orders without the need to go through an intermediary. Thus, it is important to consider both advantages and disadvantages of both types of cryptocurrency exchanges and choose the one that best matches your trading expectations.
KYC procedures and 2-Factors Authentication
In 2020, a great emphasis is placed on whether a particular trading platform complies with Anti Money Laundering and Know Your Customer standards. This is a legitimate way to gain trust and get recognized by the community and authorities. The majority of centralized exchanges which comply with the KYC procedure demand users to upload their ID document, tax identification, proof of residence, and photo to validate their identity. The exhaustive list of required documents can also include utility bills, social security numbers, bank card photos, etc. By imposing strict registration rules the exchange protects itself from unintentionally promoting money laundering, trafficking, and corruption.
Always check whether the exchange of your choice offers the following security tools:
- 2FA authentication feature. If possible, choose offline 2FA instruments or 2FA hardware instead of SMS.
- Anonymous registration and sign up (mainly applicable for decentralized exchanges);
Using and combining the aforementioned features is the best way to protect your crypto assets and ensure that the cryptocurrency exchange aims to secure your funds.
Why to choose cryptocurrency exchange Godex.io
Godex.io is a cutting-edge decentralized cryptocurrency exchange that prioritizes customers’ anonymity and security. Unlike most centralized exchanges, which require lengthy verification procedures, Godex does not ask for personal data, accounts, or registrations. With powerful security protocols and protection from DDoS attacks, this crypto exchange allows you to purchase and sell more than 200 different cryptocurrencies in a fast and secure manner.
To sum up
Every user decides for himself how to pick a good cryptocurrency exchange. Both centralized and decentralized exchanges have advantages and disadvantages which are important to consider before making a final decision. While centralized exchanges comply with KYC and AML regulations, they also become an attractive target for scams. At the same time, decentralized exchanges have a smaller trading volume and liquidity. Your choice will most probably depend on a variety of factors, including what type of trading you are looking for, what is your investment portfolio and your investor profile.
Originally published at https://godex.io