A bitcoin service provider, also known as bitcoin currency exchange, is a business that allows traders to trade bitcoin for other assets, such as traditional fiat currencies or other types of cryptocurrencies. If you are a newcomer who has just stepped into the world of bitcoin trading, it is essential for you to choose the right bitcoin service provider, so that you receive the best return on your investments.
When looking for the right service provider, there are several factors you need to consider, which includes:
- Your personalised trading needs
- Your location
- Amount you wish to trade
- Security of the exchange platform
Here are some guidelines that will help you find a suitable service provider.
Know the Location of the Service Provider
The first step of finding yourself a suitable service provider is to know the location of the service provider. Not necessarily the regulations related to bitcoin exchange would match if you and your preferred exchange are located in two different countries. In case, the service provider doesn’t isn’t based in your country, then you should go through the ‘Terms & Conditions’ section in their website. It will help you finding out the array of currencies that the service provider supports before you start trading.
Evaluate the Bitcoin Purchasing Options
The more payment options you have for purchasing bitcoins the better. Ideally, the reputable service providers offer customers to pay via wire transfer, credit cards, PayPal and cash. While selecting the payment method, give importance to your convenience and security of your payment information. Experienced traders consider card payments as more risky than cash payments.
Consider Other Options If Exchange Fees Are Too High
Every service provider imposes certain exchange fee on transactions. If an exchange platform claims too high a fee compared to the average market rate, it is better to avoid that option. In many cases, service providers impose additional charges on top of usual transaction fee.
Give Priority to an Order Book With High Volume
An order book in bitcoin trading means a comprehensive list of purchase and sell requirements that customers have offered to the service provider. Almost every exchange platform publishes respective order books. While choosing a suitable service provider, it is important that you consider volume of their order books, as it indicates its reputation in the market alongside the extent of its liquidity.
Consider the Service Provider’s Transparency Policy
A newbie in bitcoin trading business must take into account the extent of transparency that a service provider follows while allowing customers to verify its bitcoin reserves. Genuine exchange platforms periodically publish the addresses of their cold storages and auditing details. These details are helpful in the context of understanding a service provider’s extent of liquidity, ability to cover the spectrum of bitcoin exchange sales and whether or not they are driving fractional exchanges.
Ensure Security Parameters
A newcomer in bitcoin trading must ensure security of the exchange platform. The first factor to check for is whether the platform features HyperText Transfer Protocol Secure (HTTPS) or HyperText Transfer Protocol (HTTP). Any site or exchange platform with a secure protocol will feature HTTPS. It is better to check for other options if this requirement is not met. Another important factor that a trader must look out for is authentication. Most reputed exchange platforms like Belfrics offer secure log-in facility with two-factor authentication (2FA) that meet highest security demands.
Check for Usability
Bitcoin service providing platforms featuring top-notch usability doesn’t only mean a seamless interface that loads promptly. In addition, it is important to find out whether it is allowing users to trade on the move. The best in the business not only offer mobile-friendly websites but also they have exclusive trading apps that smoothly run on iOS and Android operating systems.
Prepare a checklist based on these factors while you search for a suitable bitcoin service provider. Exchange platforms that tick off all the boxes should be preferred over other options.