The crypto market is booming. Thanks to the ongoing institutional adoption and support from high-profile investors, Bitcoin and altcoins have entered the mainstream. However, with over 5,000 coins available, investment decisions are not easy. Investment websites provide a wealth of information for beginners and pros. Here is how to choose a reliable exchange and source of market insights.
Choosing a Site
Most of these platforms are also exchanges, which makes security your primary concern. The website must be protected from cyberattacks. Cryptocurrency transactions are anonymous, but hacking may still have serious ramifications. You should consider:
- security measures (is the website trustworthy and does it use multi-layered protection?),
- key control (will you control the private keys in your wallet?),
- ease of use (is the interface user-friendly?),
- trading fees (how much will your transactions cost?),
- the number of coins and tokens available for trading (does it have the assets you want to invest in?),
- availability of interest accounts (can you earn interest by depositing your assets on the platform?),
- bonuses and rewards (is there a welcome bonus, a loyalty system, etc.?).
Two Types of Crypto Exchanges
All crypto investment systems are divided into centralized (CeFi) and decentralized (DeFi). It is crucial to understand how these types compare. While cryptocurrencies are inherently decentralized, as they are designed as the antithesis of a state-controlled banking system, it does not mean that the transactions do not require registration or identity checks.
CeFi (Centralized Finance)
These platforms are owned by private companies. They comply with KYC requirements, so all users must confirm their identities to buy or sell crypto. The measures prevent internet fraud and money laundering. This type of exchange is the oldest and the most common one. Some of the largest systems of this kind provide insurance that covers cyber breaches. All crypto coins bought within the systems are stored in their custodial wallets.
DeFi (Decentralized Finance)
These sites are more aligned with the philosophy of Bitcoin, which epitomizes decentralized transfer of value. They do not have a central control point. These sites may be described as massive networks of computers as opposed to centralized servers managed by private companies. They do not usually require KYC verification.
To Sum Up
The best sites for cryptocurrency investment are reputable platforms. You may choose a CeFi or DeFi environment as long as it meets the other criteria (reputation, security, ease of use, insurance, etc.). Check user feedback and experts reviews to make an informed decision.