Which Cryptocurrency Exchange should I trust?
We now have a huge range of cryptocurrency exchanges available to us, and new ones arrive on the scene regularly. This means that knowing which one is best, or which one to trust can be a daunting decision.
How do I know which Exchange to trust and use?
In the early days of Bitcoin, many exchanges were setup very quickly and in great haste. The speed was needed to provide early adopters a quick and easy way to buy into the new Bitcoin market.
Over time the Cryptocurrency markets have expanded beyond just Bitcoin, and the number of users now involved in buying and selling, has increased exponentially. These key factors have forced a need for exchanges to smarten up and professionalise, and quick.
No exchange wants to suffer service outages. A loss of service for thousands of daily users would be very costly – missed transaction fees means missed revenue. On the other hand, no exchange wants to be caught with the pants down, in the middle of a hacking scandal either. They understandably want to avoid becoming targets for hackers and exploitation. Consequently, security is now a major must in the world of crypto exchanges.
The Mt. Gox Bitcoin Exchange Hack
Perhaps the biggest and most publicised early Bitcoin Exchange hack was that of the Japan based Mt. Gox back around 2014.
Mt. Gox was ‘The’ giant in the early Bitcoin ecosystem. Launched in 2010, it quickly became the largest Bitcoin Exchange. At one point around 2013-14, it is estimated that Mt. Gox handled over 70% of all Bitcoin transactions worldwide around.
Ultimately however, Mt. Gox failed to keep up with the pace of security required. It fell victim to early hacking and Bitcoin theft in spectacular fashion. Mt. Gox ceased trading in February 2014, following an announcement that it had ‘lost’ approx. 850,000 Bitcoins. Some of the missing Bitcoins were owned by Mt. Gox itself, and its customers owned the rest.
The total value of the losses? Those coins were worth an estimated $450 million at the time.
Once the dust had settled, it became clear that Mt. Gox had become victim to theft. Hackers had targeted Mt. Gox’s ‘hot wallet’ over a number of years, since as far back as 2011. The price of Bitcoin crashed, and with it went a lot of people’s trust and faith in the Bitcoin system.
If we fast-forward now 3-4 years after the Mt. Gox scandal, we can see that the landscape of Bitcoin Exchanges has changed significantly and improved for the better. We now have very large and sophisticated exchanges such as the likes of Coinbase and Binance. Both of which are backed by Venture Capital and run by teams with years of experience in financial markets.
The exchanges at the top of today’s rankings are all well organised and professional. Many of them are backed by successful venture capital firms from Silicon Valley and similar, with a track record for delivering great customer service and high levels of security.
Being so relatively new, the Bitcoin ecosystem is still in its infancy. However as more investment, ‘smart-capital’, and bigger players arrive, we will see more changes for the better. We can expect to witness continued improvements in customer service, fiat-to-crypto deposit and withdrawal processes, and security.
The biggest players in the consumer market today
There are now many reputable Bitcoin and Altcoin exchanges available to you. Certainly, three of the largest and most reliable to-date are Coinbase, Binance, and CEX.io.
For more information on any of those three, we recommend you visit our sister site CryptoPutSimply.com. Crypto Put Simply is fantastic at explaining and guiding you through setup and use of each exchange platform.
Where else can you get you first Bitcoins?
There are currently a number of different ways and means to dip your toe into Bitcoin:
- You can win free Bitcoins! These are available from Free Bitcoin Faucets, through competitions or similar promotions. FreeBitcoinEarner.com is a great site for discovering ways to win free Bitcoin!
- If you have a friend or family member who already has some Bitcoin – you can setup a Bitcoin wallet, and then have them send you some Bitcoin.
- You can earn Bitcoin in exchange for running the Bitcoin software on your computer(s) or servers. This is called Bitcoin Mining. It’s quite difficult to compete with the big established Bitcoin Mining Farms these days, but you can read more about ‘What is Bitcoin Mining?’ here.
- You can signup to a reputable Bitcoin exchange. Our recommended examples being Binance, Coinbase, or CEX.io; and then buy Bitcoin through them.
- Use our referral code to signup to Coinbase and receive £7 / $10 dollars worth of free Bitcoin when you first sign-up!