What are Crypto Exchanges?
Cryptocurrencies are online assets that are used as payment methods or medium of exchange, and are secured using cryptographic proof which is a method used to generate new coins and verify cryptocurrency transactions that are recorded and stored on digital ledgers called blockchains.
Cryptocurrency exchanges are online platforms available online where you can sell, transfer, store or buy cryptocurrencies in Canada.
The main decision you will make is between using a centralized (Traditional) exchange or a decentralized (peer to peer) crypto exchange
Centralized exchanges are called traditional because they were the first types of exchanges available ever and function similarly to how a traditional bank functions, by overseeing all their customers’ transactions and offering escrow services.
One of the main advantages you could get by using centralized exchanges are that they offer higher liquidity because these platforms usually only buy and support cryptocurrencies that have high trade volumes by customers and are relatively risk-free. A cryptocurrency exchange invests a lot of money into high-level security methods to meet the authorities’ regulatory criteria and stay in business.Thus the preference for lower risk.
However, trading on centralized exchanges is less private as you will need to provide personal data and other forms of identification to be verified on these platforms.
If you are not comfortable with this, you can opt to go for a decentralized exchange instead. These platforms directly connect buyers and sellers and let them agree on the trading terms that they set on their own.
Factors to Select the Best Cryptocurrency Exchange
Before you make your final judgement, you should go through the below points and criteria to ensure that you would select the best type of cryptocurrency exchange for your uses.
Are you a crypto trading beginner or an experienced trader? If you are new to purchasing bitcoin in Canada, we advise you to stick to user-friendly platforms with easily-navigable interfaces.
Have you purchased any cryptocurrencies in Canada before? If you have not, it should be easier for you to use fiat to crypto exchange.
Is the target cryptocurrency you are targeting to invest in listed on the exchange?
Do you have a bitcoin wallet in Canada that you could use for storing crypto? If you don’t, you could go for an exchange that provides one.
Are transaction fees reasonable or unreasonably high? Does the cryptocurrency exchange charge deposit or withdrawal fee? This can be a decisive factor if you can’t make up your mind between two different platforms.
Are you satisfied with the payment methods the cryptocurrency exchanges are offering you?
Are you required to complete a KYC check to register for an account? If you do not like sharing your private data, you would be better off using a decentralized exchange.
How secure are the cryptocurrency exchanges that you are using? Do they offer two-factor authentication and address whitelist on your account?
What kind of customer support is available?
The cryptocurrency exchanges you are selecting should be supported in Canada.