There’s a high influx of new investors in the cryptocurrency space, and this means a rise in crypto transactions. In this article, you’ll learn how to choose the safest and most secure exchanges.
Individuals and business traders alike are currently looking for ways to enter and benefit from the world of cryptocurrencies. Considering how young the industry is and the lack of regulation, using cryptocurrency exchanges is by far the most common and practical method. There are a lot of exchanges accessible on the market and picking the one that is best for you might be challenging. When purchasing digital currencies, security is typically a major issue for customers.
Nearly $2 billion was lost to cryptocurrency hacks in the first half of 2022 alone. The demand for security on cryptocurrency exchanges is growing with time. The primary objective of the biggest platforms on the market is to safeguard consumers as more individuals come into cryptocurrency and become familiar with it. The best cryptocurrency exchanges now have more advanced security mechanisms in place compared to a few years ago, including rigorous identity verification and authentication procedures, AI-based analysis, and several partnerships with leading cybersecurity companies. Even while security has improved significantly over time, not all transactions are created equal.
If you intend to invest in cryptocurrency, you should be certain that the cryptocurrency exchange you choose will do all it can to safeguard your holdings. When looking for a cryptocurrency exchange that suits your requirements, keep the following criteria in mind to make the process easier. Crypto customers seek the optimal combination of products and services, including a comfortable user experience and a wealth of earning and profit-generating opportunities, among other things, in addition to security.
What makes a crypto exchange safe?
While the bulk of the main cryptocurrency exchanges use solid security measures, clients are looking for an exchange that will go above and beyond to protect their Bitcoin and other currencies. We’ve included a few more factors that can help safeguard your crypto transactions:
1. Asset Security and Insurance:
Exchanges take various procedures to ensure the security of their system and assets. One of these steps is getting insurance coverage for crypto assets. Another is keeping a percentage of the assets in cold storage. For example, Coinbase holds 98% of its assets in cold storage, which means they are offline and difficult to hack. Gemini also holds most of its assets in cold storage in addition to reportedly having over $200 million in insurance coverage. Some cryptocurrency companies also provide bug bounties, which reward ethical hackers for discovering flaws in their systems. Coinbase, Robinhood, Gemini, and Crypto.com are examples of exchanges that do all three.
2. Payment Options:
Some of the most common payment and withdrawal methods in the European market are direct transfers from a personal bank account, electronic transfers, and cryptocurrency deposits. An ideal exchange should make it simple to use the most popular payment methods and have a large selection of trading pairs that are all regularly verified and approved (both cash-in and cash-out). While having a wide range of trading pair alternatives is vital, having tight criteria for trading pairs, goods, and services is even more crucial. An exchange with fewer high-volume, safe trading pairs will undoubtedly outperform one with more inferior trading pairs.
You can learn about an exchange’s reputation among its users by studying its user community and the comments and reviews they publish on social media. The ideal exchange takes all possible precautions to protect its users and reputation. Look up the company’s name to see what kind of team is behind the exchange. Who is the company’s CEO? The team should be approachable and involved in the community.
4. Customer Support:
The cryptocurrency market is operating 24 hours a day, seven days a week, and you’re invariably going to require some assistance at some point. Check the exchange’s customer satisfaction and customer support ratings to discover if you can rely on their personnel in case of a problem. Look for an exchange that has outstanding response times and resolution rates, as well as 24-hour service.
5. System Stability:
An exchange needs to stay stable during erratic market fluctuations, support growing user activity, and offer liquid markets for speedy transaction executions. Although not all exchanges provide this information, try to find out how well their matching engine is performing. This might reveal the maximum TPS of the exchange. Visit their blog or social media pages later to view the frequency of maintenance and previous outages.
Crypto wallet security
Using a crypto wallet is one reliable way to gain additional security, but you must carefully consider your options.
If the private keys to your crypto wallet are stolen, it will be incredibly impossible to recover your assets, which is why we advocate utilizing a cold wallet, a method that provides the best level of protection for your digital money. A cold wallet is a piece of hardware that allows you to keep your crypto assets offline, making it nearly impossible to hack.
However, because cold wallets are not connected to the Internet, accessing your cryptocurrency when you need it would be difficult. A hot wallet, on the other hand, is a web-based, mobile, or desktop wallet that stores digital currency. It is an excellent option if you want to gain quicker access to a specific currency. Because it lacks the protection of a cold wallet, you should only put a little amount there that you intend to use frequently.
When you buy cryptocurrencies, you are taking a considerable risk. As a result, it is important to take precautions and search for a reputable cryptocurrency exchange with a crash-proof system that provides protection like insurance, cold storage, and bug bounty programs and offers a reasonable range of payment methods. By following these safeguards, you can be sure that you are protecting your assets in the best possible way.