There is plenty of mystery surrounding cryptocurrency for many people, but once you have the main questions answered the picture becomes a lot clearer. We generally want to find parallels with the money we’ve been using everyday our whole lives. To do this, we have to understand that there are many differences in the way crypto is stored, created, and spent. But there are also many similarities - and requiring the use of exchanges to change between cryptocurrencies and standard currency is one particular similarity.
A crypto exchange is much like a currency exchange, where you can go and change money when you travel abroad, for instance. These exchanges come in different varieties and sizes, but they are the place you go to buy your cryptocurrency, usually in exchange for either Fiat currency (most likely your country’s standard currency), or in exchange for another cryptocurrency. They can be based anywhere in the world and are usually accessed online.
Exchanges are the place from where you buy your cryptocurrency. There are some services in which a wallet (see our Best cryptocurrency wallets for 2020 post) and exchange are combined, but here we are going to look at the main exchange-only products. As with any reputable crypto exchange you will need to go through a verification process to avoid fraud and other potentially illegal activities, and of course exchanges incur fees (usually paid to cryptocurrency miners who verify transactions).
Kraken is one of the longest-running exchanges on the market - having been around since 2011 - and supports currency pairs (eg. US Dollars to/from Bitcoin being one currency pair) including 12 Cryptocurrencies, and several fiat currencies including US Dollars and Euros. It is great for making international payments via the SEPA system, has cheap rates and is quite fast. It has had its technical issues in the past, but the Kraken awoke again in 2018 and is definitely one of the go-to Bitcoin exchanges.
Formerly known as GDAX, Coinbase Pro is more suitable for those with a bit more experience, such as cryptocurrency traders, rather than the casual user. It also has a lengthy ID verification process which means you have peace of mind about its security, but also means it is not the fastest one with which to get started.
Bitstamp is a nice and easy-to-use crypto exchange with which you can make card purchases using an old-school debit card. Headquartered in Luxembourg, Bitstamp is ideal for newcomers and experienced traders alike, or those making large transactions. It is very big in Europe; one downside is that it currently is not available outside of Europe and the US.
Bitfinex is another exchange which has a high volume of trade (it did around twice the volume of Kraken for much of 2017), with reasonable fees and a high degree of liquidity with its peer-to-peer (P2P) financing model. It is a bit complex for beginners though, and does not have Fiat currency support (though it does support loads of cryptocurrencies) so is more aimed at the specialist.
Bittrex is one of the most visited exchanges and has been careful to comply with regulations which allow smaller scale users to be able to buy and sell there. It has a whopping 200 currency trading pairs and has a very high volume of trade. However, it does require quite involved vetting in order to get started.
The Finnish-based Local Bitcoins has an idiosyncratic model in that you deal directly with the person you are buying and selling from, via its P2P structure. It is therefore quite a nice place to do business, and very secure. It also uses the PayPal secure payment service.
The last on our list, Bitpanda is an easy to use, Austrian-based exchange which has relatively low fees, and an easy and fast verification process. Ideal for beginners.
Naturally, these aren't the only cryptocurrency wallets and exchanges available, there are plenty of other reputable products, but this list does cover what are deemed to be the most reliable and secure offerings.
Shop around, do your research and see what other options might be available to you. There are some scams out there, so care is needed. Always check neutral reviews and never give away personal details or make payments to anyone you are not sure about.
For businesses hoping to accept cryptocurrencies, Veriff can help with the process of know your customer and security screening of new clients. Check out our website and sign up for a free demo.