If you’re starting out in the world of Cryptocurrency, you will probably just be getting to grips with the whole new world of wallets, bitcoin exchanges, and the Cryptocurrencies themselves. It is quite daunting at the beginning and I still remember how did I buy bitcoin for the first time, which was many years ago. I also remember how confusing it was to get my head around many of the basic elements of Cryptocurrency.
If you’re looking to invest or trade Cryptocurrency then you’re very likely to need a Crypto exchange. There are other ways of purchasing Cryptocurrency, and some sellers will vend directly which is okay so long as they have a strong and respected reputation within the community. For newbies, exchanges represent a much safer and regulated platform to obtain Cryptocurrency.
Starting Out and Choosing the Best Exchange
It is probably best if I take you through my journey of discovery so you won’t make the same mistakes I have done.
When I started out, Bitcoin was becoming very popular in certain circles online and hadn’t quite started to do social media rounds. In other words, it was big, but not as big as it is now. Many people were still mining Bitcoin which is now almost impossible to do and I did initially consider joining a mining syndicate.
After much research and looking at the cost of mining, I decided not to do it and bought my Bitcoin instead. This left me thinking if I could just go onto the exchanges and purchase Bitcoin, which doesn’t work like that of course, as you need a wallet first.
This Discovery Introduced me to Coinbase
The Cryptocurrency forums are a nightmare sometimes, but certain subreddits on Reddit are extremely useful. This is where I learned about the types of wallet with flashy traders showing off expensive hardware wallets and frugal investors suggesting the use of software wallets until I had made a sensible return.
I took the advice of a software wallet as the inner Scrooge in me didn’t want to spend too much money up front and even the thought of spending just $100 on a wallet seemed ludicrous. I wasn’t even sure that I was planning to buy $100 worth of Bitcoin.
Anyway, many of the software wallets also had a fee attached to them and I was directed to Coinbase because they provide free software wallets. This is a great way for amateurs to get into the Cryptocurrency game and also, I suspect it helped Coinbase to attract thousands of new clients to their exchange.
The Coinbase wallet is a really good software wallet and it also helped me purchase my first Bitcoin.
Why I Decided to Switch from Coinbase
I traded on Coinbase exclusively for a year or so (probably a bit longer), not really thinking about other exchanges and blissfully unaware of the outside Crypto world. This meant I thought that Coinbase’s fees were the most acceptable and that the platform was the safest one.
In short, I had settled in and become comfortable on Coinbase. It is very easy to use, the interface is designed with even the greenest amateur in mind and the exchange offers market leading features.
Around this time (it was early 2017), the forums began to become increasingly concerned because exchanges were getting hacked. I don’t mean small empty single-wallet hacks. I mean that exchanges were completely emptied of millions of dollars worth of Cryptocurrency.
It was also at this time that Bitcoin started to really gain momentum and the price started rising fast. I don’t know why, but I became edgy. Coinbase was telling users that their platform was safe but I came across more than one trader on the forums advising against using Coinbase because it was vulnerable to hacking. I was also sitting on a pot of Bitcoin that wasn’t a vast fortune but was no small pocket change.
Besides, as a result of all of this hacking, I became more aware of other exchanges, the ones being exploited and the ones that were considered very safe.
Moving Away from Coinbase to CEX.IO
In mid-2017, I did a few things that I am extremely happy and lucky to have had the foresight to do. The first was that I invested (begrudgingly) in a hardware wallet and moved all my Crypto there.
Then I had become aware of CEX.IO because those days I was writing an eBook for an actual Cryptocurrency developer about their coin. CEX.IO was one of their recommended exchanges. I needed to play around on CEX.IO in order to write some detailed analysis in the eBook and through doing that, I became familiar with it.
The fee structure wasn’t earth-shattering (there are exchanges with much cheaper fees) compared to Coinbase but it was a little cheaper. This attracted me quite a lot as I do pride myself on being a bit of a penny pincher. The thing that cemented it for me was that CEX.IO invested a lot of money in security protocols and it was as easy-to-use even compared to Coinbase.
Using CEX.IO and Why I Still Use it Today
I mentioned that there are cheaper exchanges and in all honesty, there are probably some exchanges with a better user interface than CEX.IO. But the key problem with those exchanges is that they are either based in a really random country that you have never heard of or they have been hacked.
These cheaper exchanges tend to not invest much (if anything) in user security and some of them are outright scams, set up in some unknown backwater with the express mission to rob Crypto traders.
Coinbase invests in Cryptocurrency more than it does in security. They actively promote the market which has helped it grow remarkably. CEX.IO is a bit more obscure and it is only becoming one of the mainstay exchanges in people’s minds. It has done this through reputation and security and it actively funds its security and user safety features. As a result, the CEX.IO platform has never been hacked.
Conclusion About Exchanges
Exchanges are popular for the most part in the world of Cryptocurrency because they’re a necessity. It is very unlikely that you will find an avenue where you can easily obtain Bitcoin now without using an exchange. Moreover, as other currencies become more difficult to mine this will become truer across the Crypto market.
Some exchanges are very good entry exchanges but don’t make the mistake I did: do not think that your first exchange is always going to be the best for you. There are scam exchanges, so be very careful about which exchange you’re using. If, like me, you’re willing to pay a tiny bit more for a huge amount of peace of mind – CEX.IO is the exchange for you.