The 3 Best Cryptocurrency Exchanges For Beginners - (Coinbase / GDAX, Binance, Kucoin, Bitfinex?)
There are a multitude of exchanges already circling the web and more are being introduced every single day. But how do you know which exchange is the right one for you?
Each crypto exchange has its own list of pros and cons. First you need to figure out what you want from an exchange. Here are some questions you should be asking yourself:
- Which Cryptocurrencies Do You Want To Buy? Top 100 Cryptocurrencies!
- How Much Money Do You Want To Invest?
- How Long Does It Take To Deposit & Withdraw Funds?
- Is The Exchange User Friendly?
- What Are Other People Saying About It? (Twitter, Reddit, Telegram, Forums, Websites)
- Does The Exchange Have Significant Trading Volume?
- Is The Exchange Safe & Secure?
- What's The History Of The Exchange? (Hacks, Shady Practices, Clear Communication)
- How Long Has The Exchange Been Active?
- Does The Exchange Support Your Usual FIAT Currency & Cryptocurrency - Or Just Cryptocurrency?
No exchange will tick all of your boxes. (YET!) Exchanges are improving and new ones are popping up all the time. This article gets updated frequently! (11th March 2018)
If you currently own no cryptocurrencies, your options are very limited. The first step you need to take is acquiring some Bitcoin (BTC) or Ethereum (ETH).
Bitcoin & Ethereum are the most trusted cryptocurrencies and they have been around the longest. When you hold these cryptocurrencies, a whole other world opens up for you.
Nearly all other cryptocurrenices (there's always exceptions!) trade using BTC or ETH.
There are only a handful of trusted exchanges that trade using FIAT (USD, EUR, etc). The exchanges that accept FIAT don't usually have a lot of cryptocurrencies to choose from. They take the quality over quantity approach!
Whereas some other exchanges have a mountain of cryptocurrency to choose from, but they only trade cryptocurrency. You can't deposit FIAT into these exchanges!
You will need to move your cryptocurrency across exchanges depending on where the cryptocurrency you want is listed.
Out of all of the exchanges I've tried, these are the three I recommend if you are a beginner:
1.) Coinbase & GDAX
This is where I started my cryptocurrency journey and I have had a lovely experience so far. I haven't run into a single problem and I am delightfully impressed with how clean the UI (user interface) looks and how easy to use the whole thing is.
If you're like me before I got into all this, you'll want to start with buying some bitcoin. It's the most popular cryptocurrency and it has been around the longest. It just makes sense - right?
Differences Between Coinbase & GDAX
It's important to know that Coinbase & GDAX are part of the same company. They are connected and integrate well with each other.
If you want simple and easy, Coinbase is the way to go. This comes at a cost though - literally. You will be charged a fee when trading!
GDAX allows you to actively trade without losing any of your cryptourrency to fees - providing you use Limit Orders. There is a bit of a learning curve though.
My first trade happened through GDAX because my main priority was NO FEES! What is your main priority?
New to cryptourrency? Have no idea where to start? Don't want to spend a decent amount of time learning new tech? Coinbase is the way to go.
Want to trade cryptocurrency frequently? Willing to put the time in to learn something new? Can't get enough of all things crypto? GDAX will hit the spot!
Supported Cryptocurrencies & FIAT Money
Coinbase & GDAX currently support four cryptocurrencies:
- Bitcoin (BTC)
- Ethereum / Ether (ETH)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
Despite rumours that Coinbase will support more cryptocurrencies in the future, there has been no official announcement. Based on their history, it's likely they'll add more.
Be careful when more coins get announced and listed! The introduction of Bitcoin Cash in December 2017 was handled very poorly and Coinbase received a large backlash because of this - rightfully so!
They announced the listing of Bitcoin Cash and then immediately opened up trading (during the crazy Christmas boom - what a coincidence...). This caused the price of Bitcoin Cash to go all over the place. Be patient.
The four cryptocurrencies each have three trading pairs:
- BTC / USD
- BTC / EUR
- BTC / GBP
Bitcoin is the powerhouse of the whole crypto economy - it's mostly used as a store of value or for expensive purchases. It has the largest market cap by far, followed closely by...
- ETH / USD
- ETH / BTC
- ETH / EUR
Ethereum has the second largest market cap and is the pioneer of smart contracts - code based contracts that execute "without any possibility of downtime, censorship, fraud or third-party interference."
- LTC / USD
- LTC / BTC
- LTC / EUR
Litecoin has the fifth largest market cap and was built for smaller transactions - think buying a coffee. If you compare Litecoin to Bitcoin you'll find Litecoin has faster transactions and lower fees.
- BCH / USD
- BCH / BTC
- BCH / EUR
Bitcoin Cash has the fourth largest market and... boy where the hell do I start with this? This is a huge debate that cannot be summed up in a short paragraph. It's similar to Litecoin - fast transactions with low fees. Read all about it here!
Remember when I was telling you about cryptocurrency exchanges that only trade crypto? Binance is one of them.
Binance offers a huge variety of cryptocurrencies to choose from. They have a very strict application process in regards to introducing new coins - which keeps the scams and useless cryptocurrencies at bay.
It's also worth mentioning that the user interface is very user friendly for a crypto only exchange. Trading on Coinbase & GDAX is easier, but they don't have over 100 cryptocurrencies to handle and trade with.
Binance is a great choice if you want to dive into the new and upcoming cryptocurrencies.
Excellent Communcation, Trust & Support
What stands out to me is the incredible communication the Binance team has with the crypto community. CEO Changpeng Zhao is always active on Twitter providing useful information and safety tips. He also frequently addresses the communities concerns and tackles rumors head on.
In early February 2018 - All trading activity abruptly stopped due to surprise maintenance for 12 hours... Shortly followed by another Twitter message "Due to an unforeseen slowdown in the speed of our data sync, we now estimate for all trading activity to resume at 2018/02/09 4AM (UTC)." To summarize - the data went out of sync and needed a full resync. Due to the large amount of data, it took a long time.
A lot of people, including myself, had a lot of money sitting on the exchange when all of this was happening. What's the first thing you think about when trading stops? Oh my god - there's been a hack and now I have no money!
CEO Changpeng Zhao provided updates on his personal Twitter every couple of hours keeping everyone in the loop. It didn't eliminate all of the imaginary nightmare scenarios, but it gave some peace of mind in an incredibly stressful time for a lot of people.
Trading resumed as normal and Binance showed the world that they can handle themselves when the going gets tough. This built trust within the community and Binance were praised with the way they handled a difficult situation. They also reduced trading fees as a thank you and as an apology
Binance Coin (BNB)
In July 2017 Binance launched it's very own Binance Coin (BNB). What does Binance Coin do?
Whenever you make a trade, Binance takes a small trading fee. How else will they keep everything running?
When you're a holder of Binance Coin - these fees are reduced by 50%. You can choose to use BNB or you can accept the usual trading fee.
The wonderful thing is, simply holding Binance Coin can earn you monumental gains! It behaves like all the other cryptocurrencies - if the market cap goes up, you benefit.
With the rate at which Binance is growing, this is a nice coin to be holding. Plus half price fees!
Depending on the cryptocurrency, the withdrawal fees on Binance can get absolutely insane. Some are a fair price, but others are extortionate. On the 5th of March 2018 they reduced the withdrawal fee on Bitcoin because they introduced Segwit. A step in the right direction!
The community has a loud voice and pesters Binance every day about the ridiculous withdrawal fees. In fairness, running an exchange isn't cheap. It's a balancing game and the community, as well as Binance need to accept that. Hopefully a happy middle ground will eventually be found.
KuCoin is another cryptocurrency only exchange - like Binance.
The reason I've included KuCoin is because there are even more cryptocurrencies to choose from (200+). It takes a long time for Binance to list new coins. With KuCoin, you can grab those upcoming cryptocurrencies you keep reading about.
You should also spread out over a few exchanges. It's never good to have all your eggs in one basket. Especially with all the exchange drama that keeps happening in this new space.
KuCoin has a lovely aesthetic and the user interface is just as good as Binance. There are slight differences, but you'll figure it out.
They frequently post new articles and they are active on social media.
KuCoin is similar to Binance and I would say they're the strongest competitor to Binance if they keep up the good work. They are growing incredibly fast and their team is full of experts in the space.
They provide 24/7 customer service and they also offer more trading pairs than usual exchanges.
You can trade using:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Kucoin Shares (KCS)
- Bitcoin Cash (BCH)
KuCoin Shares (KCS)
KuCoin Shares are a really interesting idea. Holding KCS allows you to profit from how well the exchange is doing.
You essentially earn passive income just by holding the coin. KuCoin currently splits 50% of the trading fees with their users that hold KCS. The percentage will go down in the future, but for now it's very lucrative.
When KuCoin's accounting team calculates all the trading fees for every trading pair on KuCoin - you'll receive a small payout. The payouts are daily and you'll notice that all of your holdings have increased. More Bitcoin, Ethereum, Neo, Nano - you name it. Cool right?
The more Kucoin Shares (KCS) you hold, the larger the payouts.
Holding KCS also gives you a trading fee discount. For every 1,000 KCS, you get a 1% trading fee discount. This caps out at 30% - 30,000 KCS. You can still hold more than 30,000 KCS though.
Bitfinex is worth mentioning in this post. Unfortunately you need $10,000 in your account before you can even begin trading. It's an exchange for experienced traders with a lot of capital. But they are trusted and they do accept FIAT.
This post is aimed at beginners and because the minimum account equity is so high, I'm not including it in this list.
If you have the money I would recommend this exchange.
The three exchanges I've mentioned are only recommendations. Do your own research! I'm not a financial advisor. You are responsible for the decisions you make. I wish you all the best in your cryptocurrency journey.
When dealing with cryptocurrency, you should aim to diversify. Use multiple exchanges, spread your investments out over more than two coins, and don't fall for FOMO - Fear Of Missing Out!
NEVER PUT IN MORE MONEY THAN YOU CAN LOSE!
NEVER STORE YOUR CRYPTOCURRENCY ON AN EXCHANGE LONG TERM!
Ask any questions you want down below! Which exhange do you think is best?
Other Cryptocurrency Exchanges