Anyone who wants to venture into the cryptocurrency market needs to use a cryptocurrency exchange. It is often the next thing on the agenda, after getting a wallet.
Cryptocurrencies have enjoyed an enormous surge in popularity globally in 2017. Due to this, many people are actively starting to invest in the market, and has, therefore, made the role of cryptocurrency exchanges to become even more critical. Before going into the top 5 fiat-to-crypto exchanges, it is essential to understand what a crypto exchange is.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where individuals can buy and sell digital assets like bitcoin, ethereum, and litecoin for fiat currency. And if you’re are wondering what is fiat? Or what does fiat mean? Fiat currencies are conventional currencies such as USD, EUR, and GBP.
There are three different types of crypto-exchange services. The variation is as a result of what determines the price of the digital coin on the exchange.
Peer-to-Peer (P2P) Decentralized Exchange Platforms
Instead of interacting directly with the platform, these types of exchange link buyers straight to sellers. There are no fixed market prices as everything depends on the two parties agreeing. The role of the crypto-exchange is to render transaction mediation and escrow services.
These operate like forex brokers. Individuals who want to buy digital coins can visit these platforms and buy. Broker sets the price of the cryptocurrency. There are numerous crypto exchanges on the internet. This article will let you know about the top 5 online cryptocurrency exchange services where people can exchange their fiat currency for cryptocurrencies.
Coinbase is a distinguished cryptocurrency exchange service and a digital as well as fiat wallet provider. The company has millions of clients worldwide. It has amassed more than 10 million customers with over $50 Billion in trades since its inception in 2012.
Coinbase is distinguished for its ease of use and its availability in many many countries. Another favorite feature of the Coinbase exchange service is the new GDAX platform. GDAX is an abbreviation for Global Digital Asset Exchange, and it operates as a trading platform for digital assets. The two most popular payment methods on the platform are the credit/debit cards, and bank transfers. Transactions made using a credit/debit card are much faster than bank transfers. While the card transaction takes a few minutes, bank transfers can take up to 5 days. However, the fees for card transactions can go as high as 5%.
Digital assets that can be purchased with fiat currencies on Coinbase are Bitcoin (BTC), Litecoin (LTC), and Ether (ETH).
To purchase cryptocurrencies on the platform, users need to verify their accounts. Things needed for account verification include a photo ID, bank details, and phone number.
Gemini is a top-tier US-regulated cryptocurrency exchange service based out of New York. It operates fully licensed to render Ethereum and Bitcoin exchange services. It also offers crypto against fiat trading. The platform was established by Cameron and Tyler Winklevoss, the famed Winklevoss twins. Gemini’s most significant selling point is the confidence and security its clients enjoy. All fiat deposits in USD are saved at FDIC-insured banks. It also ensures to store the most of its ETH and BTC offline in cold storage. Gemini allows both credit/debit card payments as well as bank transfers. It also gives generous discounts for people who place substantial orders. This exchange is available in 42 states in the United States as well as some other nations like Japan, Canada, and Singapore.
Many exchange services try to provide something a little different distinguish themselves in the market. As far as Kraken is concerned, its fundamental value proposition is centered on offering margin trading. This makes it an excellent choice for cryptocurrency investors. Since its inception in 2011, Kraken has gone on to become the largest Bitcoin exchange service platform regarding both liquidity and euro value. Kraken is also in partnership with the first digital asset bank, Fidor Bank AG. Kraken provides exchange services for digital coins like BTC, ETH, XMR, ETC, LTC, and XRP. Kraken accepts payments through wire transfers in currencies. The exchange’s account security structure includes two-factor authentication protocols and PGP email encryption. Upon opening an account, users are required to undergo identity verification process.
On the Coinmama exchange, payments can be made via credit cards or cash deposit. Cash transactions can be carried out by either using MoneyGram or Western Union. This implies that buyers can purchase BTC through cash payments using their local fiat currencies. Coinmama only trades in both Ethereum and Bitcoin and its services are available globally with multilanguage support. The service is distinguished for having a straightforward and user-friendly platform. This makes it an excellent choice for first time bitcoin buyers.
Bitstamp is a famous cryptocurrency exchange service in Europe. This is because deposits made through SEPA are 100 percent free of charge. Founded in 2011, Bitstamp is one of the oldest and most trusted exchange platforms on the cryptocurrency market. Regarding security features, Bitstamp has quite a good security system in place. Its services come with multisig technology and two-factor authentication protocols. Most of the company’s cryptocurrency holdings are also kept offline in cold storage. Bitstamp charges some of the lowest transaction fees on the market. Cryptocurrency purchases below $500 in value incur a fee of 0.5 percent. Purchases worth more than $150,000 incur a fee of only 0.2 percent.
Cryptocurrencies involve a fair bit of risk just like any other investment class. Before deciding to use a cryptocurrency exchange platform, it is crucial to carry out proper due diligence. Parameters like payment methods, fees, and security of funds are just some of the critical indicators of a safe crypto-exchange. With adequate research and due diligence, the risk of falling victim of exchange fraud is greatly reduced.