Considering the recent rise in the price value of cryptocurrency, it’s no surprise that the rate of crypto-maniacs yearning to cut their own piece of cake via trading has also increased.While this idea of ‘crypto trading’ looks lucrative and profitable, keep in mind that there are dozens of scammers masquerading their identity as “trusted crypto trading platforms.” The “real” question is this: can you confidently identify the right trading platform to invest in? If you’re not completely certain, don’t panic. Here are 8 signs that show that a crypto platform is safe to trade on.
Having top-notch security simply shows that the exchange has its clients’ and customers’ interest and safety in mind. In other words, the exchange interested in making sure that their customers’ money isn’t easily accessible to hackers. If you’re a newbie or an expert in crypto trading, I’d advise you don’t skimp on this part. The safety of your entire investment on a crypto platform depends on its security. Do you know that just a little weakness in security can lead to some serious hacks? To mention a few, back in 2014, Mt. Gox lost about 850,000 BTC to hackers. However, it was later reported that the majority of them were later retrieved. In 2016, Bitfinex lost $75 million in funds when hackers got their hands on users’ segregated wallets. Thankfully, Bitfinex has now reinforced its security. In fact, it is rated as one of the biggest exchanges in terms of volume today. There are many more incidents like these, which is why you have to be very smart in making your choice of platform to trade on. Meanwhile, here are important security elements a safe trading platform must have:
- It must offer two-factor authentication.
- It must provide proof of coins in cold storage.
- It must make sure users verify their identity and location before depositing.
- Operators must be willing to provide a swift response to all questions from customers.
- There shouldn’t be any large difference in cryptocurrency quotes when compared with other leading exchanges.
- Also, there shouldn’t be a long and persistent backlog of cryptocurrency withdrawal from the exchange.
Advisably, it is important you consider the listed safety guide above before putting in your money.
A Large Number of Users Using the Platform
Another practical way to verify the safety of a platform is by the volume of users using it. A larger volume of actual traders can indicate that the platform might be safer to trade on, while a smaller volume may indicate that the platform is either new or not completely safe for users. As a matter of fact, don’t subscribe to a platform just because you saw its persistent ad or because some sweet-mouthed marketers asked you to. Research the platform and see the number of users currently trading with it; if the number of users is encouraging, then the platform may be worth a try (but it should be an amount you can afford to lose). On the other hand, if the numbers aren’t encouraging, it might be wise to pass on the exchange.
Rock-Solid Online Reputation
Any crypto trading platform with an unshakable reputation shows a great sign of safety. So, how can one verify if a trading platform has a rock-solid reputation? Well, it’s not too difficult once you know what you’re doing.
You can verify platforms through online reviews—specifically, what different users wrote about them. Bitcointalk and Reddit are great sites to visit for review. It’s best to opt for a trading platform with rock-solid reviews and testimonies.
24/7 Good Customer Service
Trading platforms that provide swift and helpful responses to their customers’ queries are usually worth signing up with. On the other hand, a platform with customer service that takes days to reply to customer queries is not worth your hard-earned money.
Easy to Use Platform
Yes, a user-friendly crypto trading platform is another positive sign of safety. Scammers often make their sites confusing for target customers. In fact, it’s one of the tactics they use to make customers contact them fast. So, as a newbie with no trading experience, it is advisable to flee from such a platform once you find it difficult to understand the process. Safe trading platforms understand their customers’ wants and make sure the website designs are easy to use. In choosing trading platforms, one is advised to do the following:
- Avoid sites where you have to look at support before you understand a thing—it is very frustrating.
- Avoid platforms with withdrawal processes that aren’t automatic.
- Also, flee from a platform that experiences multiple breakdowns. It doesn’t seem right, especially when users aren’t updated about it.
Range of Payment Options, Both In and Out
Payment options are another sign of safety. While this might look funny, be aware that crypto trading platforms designed for malicious intentions often provide users with just one payment option. Therefore, be meticulous in making your decision, because there are also some good trading platforms that only offer one option. Meanwhile, for safety reasons, it’s preferable to go for sites with more than one payment option. The options are typically as follows: credit card, bank transfer, PayPal, and even cash. Still, do your homework before making your choice.
Little or Zero Commissions and Fees
While exchanges have different commission and fees, make sure you opt for the cheapest one. Some of them are very transparent—they reveal how much to pay for deposits, buy, sell, and so on, but others are also discreet about such information. For safety reasons, flee from platforms that overly charge or add some cunning charges that look like this:
- Unnecessary monthly “wallet fee,” just for keeping cryptocurrency on the exchange.
- Ridiculous fees like identity verification, etc.
Engagement in Community Interaction, Educating Both Potential and Existing Customers
This is another sure sign that reveals the true intention of a trading platform. A reliable trading platform should often engage in interacting with crypto communities. The platform will be willing to participate and solve some existing queries in the community. It must be willing to freely educate its customers and contribute positively to things such as crypto events.
When choosing a crypto trading platform, it is important to keep the above tips in mind. Don’t jump into the trading world just because of FOMO. Make sure you’re equipped with the necessary knowledge so that you’ll have a better chance of succeeding. The cryptocurrency market is growing at a fast rate, and scammers are also out to use different means to get people’s money. This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission! Featured image: DepositPhotos © artjazz