One of the most popular topics in finance is bitcoin. Bitcoin has become a household name for many people, and it’s not hard to see why. The value of bitcoin can fluctuate wildly, which gives it an air of excitement that other investments don’t have.
But what people often forget about are top bitcoin exchanges – these are where you buy and sell your bitcoins, but they’re also prone to scams just like any other financial institution. In this blog post, we’ll go over twelve ways that will help protect your money from fraudsters when using a bitcoin exchange!
i) Is the website secure?
The first step to finding a suitable bitcoin exchange is to find one that has sufficient security. If your bitcoins hold on to a business, then they are basically in “hacker” territory – so you need to make sure that your funds are as well protects as possible.
Check out the webpage’s URL and look for any HTTPS in the URL (the S stands for secure). Also, do a quick search online to ensure that no one has reported any scams or hacks from that website.
ii) How much is the exchange charging?
It’s essential: always check exactly how much you’re going to be charged by your bitcoin exchange. Usually, the exchange will charge a fee to buy bitcoins and a different price for selling them. Some exchanges will even charge you fees for depositing or withdrawing your funds! So make sure you know what you’re paying before signing up.
iii) Is there verification?
Almost all bitcoin exchanges need some form of identification and email address to sign up with. They have to comply with Know Your Customer and Anti Money Laundering laws in their country. Know your customer means that bitcoin exchanges have to verify the identities of their users because a lot of criminals will try to use a fake name on an exchange to scam people.
AML means that when you make a purchase, exchanges have to report the purchase as suspicious activity. It’s all about ensuring that bitcoin exchanges are on top of scammers and illegal activity happening with their service, so always make sure they have these features before signing up!
iv) Is there sufficient security?
Most bitcoin exchanges have a 2-factor authentication system for their accounts. It means that if someone wanted to hack your account, they would also need your phone/email and your password to do so. If an exchange doesn’t offer this security feature, then you should think twice about signing up!
v) Are there any extra fees?
As we went over before, exchanges have a fee for buying and selling bitcoin. There can sometimes be extra fees as well – some exchanges charge a small currency conversion fee, which expects. However, always make sure that there aren’t any other hidden fees or anything that might crop up in the future. Be especially wary of any exchange that charges you a fee for depositing or withdrawing your bitcoins!
vi) Are there any past issues?
It’s always helpful to check the history of exchange before signing up. If it has had problems in the past, like closing due to legal issues or mismanagement, you should be wary about using that exchange. If you’re looking for an excellent exchange to use, then check out this list of longest-running bitcoin exchanges.
vii) Are there any reviews online?
You should always check online to see what other people are saying about an exchange. Bitcoin message boards and Reddit will usually discuss bitcoin exchanges, so use that resource to your advantage! Read through forum posts and see if anybody has had any issues with the website – if they have, you should stay away!
viii) Are there any fake reviews?
It’s important to remember that bitcoin is still relatively young and hasn’t reached mainstream adoption yet. So you should always be wary of any online reviews for an exchange, especially if they seem too good to be true – because in most cases, they are! Many scammers will try to use fake reviews on the Internet to rip off people, so always do some research into any consideration that seems fishy before trusting it.
ix) Is it safe to leave bitcoins on the exchange?
It can be a risk for some people, but it depends heavily on which bitcoin exchange you’re using. Some exchanges are more trustworthy than others, so read up on reviews before deciding if this is right for you! Be especially careful about any website that offers high returns – these are likely scams that will try to steal your bitcoins. It’s always best to store any bitcoins you want to keep safe in a wallet you control!
x) Are there any other options?
Finally, it’s always a good idea to look around for extra options if you’re thinking about signing up with an exchange! There are many different exchanges out there, so you should do some research into all the ones that seem like they might be right for you. Check out this list of cryptocurrency exchanges to see which ones are out there, then compare features and fees to find the best one for you!
xi) Is it safe to use my bank account?
You should never share your bank details with any best bitcoin exchange, so this isn’t an option at all. Just like when depositing money, any information that you send them could be stolen by scammers!
xii) Can I use a prepaid debit card?
It is possible but not recommended. Prepaid cards are usually hard to verify compared to bank accounts or even credit/debit cards, so the exchange might have a more challenging time verifying you. Additionally, bitcoin exchanges usually have pretty high fees for buying and selling bitcoins with a prepaid card (since it might be a higher risk for them).
With the rise in popularity of Bitcoin, more and more people are looking to invest. To avoid significant scams with bitcoin exchanges, you must do your research before making any investments. By following these 12 tips, you can help protect yourself from fraudsters who might want to take advantage of a newbie investor.