Before investing in a Bitcoin exchange platform, you should consider several factors. These include usability, quickness, liquidity, and customer support. A good user experience will help you conduct your transactions quickly and easily. Besides, these features are essential for an average cryptocurrency investor. But, if you are new to cryptocurrency investing, these considerations might not be so vital for you. Read on to learn more about the most important things that you need to look for in a Bitcoin exchange platform.
Usability
In a digital asset context, usability refers to how users interact with a product or service. User Interface, or visual design comprehension, is important to build credibility for a company while User Experience (UX) focuses on the user journey. Security, speed, and simplicity are essential for cryptocurrency holders. Users should have a similar experience in terms of speed and security, which is reflected in a recent survey conducted by Binance.
We analyzed reviews by looking for a consistent theme among all relevant platforms. For example, relevant reviews were twice as long as non-relevant ones. Relevant reviews also featured a high standard deviation. One review was only four words long, while another contained 527 words. Table 4 compares relevant reviews to non-relevant reviews. Additional metadata can be found in Section E of the supplemental material. The resulting analysis is based on data from three to four users.
Quickness
One of the most important things to consider when choosing a Bitcoin exchange platform is its quickness. It must be possible to execute a transaction within a micro-second. The tests were conducted on the most liquid pairs available on each exchange. Every minute was repeated to gauge their speed. While some exchanges reported faster transactions than others, most failed to achieve this in under 10 milliseconds. Bitmex and Okex fared the worst.
Liquidity
In order to determine how liquid an exchange is, you can compare the bid-ask spread. Lower bid-ask spreads mean that liquidity is better. They also mean that the spread between the highest and lowest seller is low, making it easy to enter and exit the market. But what does liquidity in a Bitcoin exchange platform actually mean? Liquidity is a key factor in determining the value of a cryptocurrency.
Liquidity is the ease with which you can buy or sell an asset without the price depreciating too much. In real estate, for example, selling a parcel can take days, weeks, or months. In the forex market, however, you can buy or sell a large quantity of currency within a few seconds. In Bitcoin exchanges, the more liquidity is offered, the more trading opportunities are available.
Although Bitcoin is considered an extremely liquid asset class, it is important to note that market conditions can change quickly. During times of panic buying, euphoria, or crisis, it may have less liquidity than in times of calm, steady trading. A high liquidity exchange platform will have enough orders to support large volumes of transactions. Liquidity is also important for a stable Bitcoin exchange platform because it can minimize the effects of slippage on the value of a Bitcoin asset.
Liquidity pools are smart contracts where tokens are locked for the purpose of providing liquidity. By locking up tokens in a pool, liquidity is available to traders in the cryptocurrency market, allowing them to trade freely and quickly. As a result, liquidity pools are an integral part of the DeFi ecosystem. They allow exchanges to borrow or sell assets and provide liquidity to their users. However, liquidity is only one aspect of a Bitcoin exchange platform.
Customer support
A successful cryptocurrency exchange platform will have 24 hour customer service. While traditional call center services are adequate for local customers, international customers expect to have their questions answered as quickly as possible. That’s why cryptocurrency exchanges should have a comprehensive contact form for customers to fill out. A cryptocurrency exchange should also offer live chat support as well as chatbots to handle repetitive customer service requests. The use of chatbots can also help cryptocurrency exchanges focus their human agents on more complex matters.
Whether you’re a newcomer to the crypto world, or have years of experience, customer service is essential. Without it, you may be trading with an exchange platform without much knowledge or experience. While it’s true that customer support is essential to new users, a weak customer service experience can lead to lost funds or bad experiences. Fortunately, there are a number of ways to combat this problem.
In addition to customer service, cryptocurrency exchanges should have an excellent reputation. While it may seem like a minor inconvenience, it’s a huge risk to your reputation. If a bitcoin exchange platform isn’t able to handle your concerns and provide assistance as quickly as you’d like, you could face hefty fines. This is especially true if you’re a beginner. If you’re unsure about the best approach, consider a few tips to ensure a positive experience with your cryptocurrency exchange.
If you are not comfortable contacting the exchange’s support team, you can find an online community to ask questions and get answers. If the exchange has a forum where you can ask questions, they’ll have someone available to help you. However, if they don’t have any forums, it’s unlikely that you’ll be able to ask questions. You might also want to consider using a different exchange.
Security
While most Bitcoin exchanges feature two-factor authentication (twoFA), SMS authentication is the weakest form of 2FA. Most exchanges offer several methods of two-factor authentication, including Google Authenticator. In addition, cold storage is more secure than hot wallets. A cold wallet will never be accessible to the public, making it difficult for hackers to gain access to your funds. A bitcoin exchange platform that uses cold storage also offers more security than one that uses a hot wallet.
The security of an exchange can be compromised for various reasons, ranging from internal problems to mismanagement. Some exchanges participate in fractional reserve banking, or they may simply have a low-quality security policy. In December 2017, hackers stole 63 million BTC from NiceHash, while another exchange lost more than $500 million from Coincheck. A few months later, BitGrail lost 615,000 BTC, and a hacked account of Coincheck was also compromised.
To ensure the security of your funds, an exchange needs to invest in several layers of security. The best security protocols include implementing strong password and identity-based authentication tools. These tools enable exchanges to onboard new customers seamlessly and prevent fraud while at the same time building trust among regulators. By leveraging automated identity verification, cryptocurrency exchanges can ensure their customers’ security and privacy. This will be especially important in the cryptocurrency industry, as the risks of cybercrime are increasing exponentially.
Some exchanges also notify users if suspicious account access occurs. These methods include impersonating an employee or source that holds public data. The attacker then sends a malicious file with relevant information, such as a person’s previous contact name. Once a user clicks on this link, the file may cause damage to their device. To avoid such scenarios, a Bitcoin exchange platform must educate its employees about the risks and methods of protection.
