Bitcoin

What is the Safest Place to Buy Bitcoin?

While the cryptocurrency industry struggled for much of 2018 and the beginning of 2019, it has begun to rebound and is experiencing significant growth. Nearly every crypto asset (especially Bitcoin) is skyrocketing and many people think this may continue for a while. As a result, there are many investors (both new and old) looking to get involved in cryptocurrency trading. However, before you dive headfirst and begin investing, it is important that you know some things first.

One of the most important things to know is how risky and dangerous it can be to invest in cryptocurrency like Bitcoin. These assets are much more volatile than common investments and can go up and down by large percentages at will. For example, an asset could grow by 3% within a few hours and then drop by 7% by the end of the day. It is hard to predict and it is completely possible to lose all of your investment if coin tanks. As a result, you should only ever invest what you are not afraid to lose. No matter how much you may fall in love with the cryptocurrency after your first attempt to buy Bitcoin or another crypto-asset, it is important to stay smart.

However, in addition to the volatility of the crypto space, it is also vulnerable to data breaches and hacks. Many exchanges and crypto assets have fallen victim to theft or hacks that have cost investors and/or platforms millions of dollars. The last thing you want is to put all your hard-earned money into an exchange to purchase Bitcoin and have the exchange fall victim to theft.

As a result, it is incredibly important to invest in cryptocurrency like Bitcoin safely and with an exchange that you can trust. By investing safely, you can ensure your money is not lost by fraudulent means and can protect your investment. But how can you know when an exchange is safe or when it is at risk? While it can be impossible to tell, there are a few things you can look out for in exchanges to make sure they are safe.

Look at the Security Measures it Uses

In order to judge how reliable an exchange or platform is, you need to be aware of the security measures they have in place. They should have protection against certain attacks, encrypt their data, abide by standards and ensure they investigate potentially fraudulent activity. While not every exchange will have these measures out in the open, a little bit of searching on their site or Google should help. If not, you can always reach out to the customer service team that works for the exchange, they should be able to answer your question. They should use the newest and most effective measures to make sure your money is safe.

Know Their Verification Requirements

When you sign up to use a cryptocurrency exchange, there is normally a fairly stringent process for signing up and verifying your account. While this can be timely and annoying for some, it is necessary to provide the best security. The higher the standards of verification, the more secure the platform and exchange. Exchanges should ask for name, ID, photo and more to ensure that those who are signing up for the account is truly who they say they are. If it is incredibly easy to be verified for an account, more fraudulent accounts can be created, which ups the chances of hacks, theft or other types of shady behavior to take place.

Ensure They Keep Funds in Cold Storage

All exchanges are responsible for holding a lot of funds. Millions of dollars’ worth of crypto and fiat are held by most exchanges. In order to ensure your money is as safe as possible, you need to ensure the exchange is using cold storage. We call a storage cold when it holds funds offline, not online (which would classify as hot storage). If funds are kept online in hot storage, they are much easier to steal. While every exchange will utilize hot storage for a small number of their funds, you should ensure the exchange you work with keeps most in cold storage and offline.

Pay attention at its Reputation

One of the single best ways to identify the safest place to buy cryptocurrency like Bitcoin is to look at the reputation of exchanges. A simple online search should be able to give you a variety of reviews and third party commentary on a range of different exchanges. You will also be able to learn about any previous hacks or security breaches. This information can be incredibly valuable when choosing an exchange. Of course, just because an exchange hasn’t been hacked in the past doesn’t mean it can’t be in the future.

Now that you know what makes an exchange safe, which exchanges out there are the safest to utilize? There are many popular exchanges out there such as Coinbase, CEX.IO, Kraken that all claim to be incredibly secure and each enjoys a large user base. While all of the aforementioned exchanges are used by many people and deemed safe, it’s tough to find a cryptocurrency exchange safer and more secure than CEX.IO.

The reason CEX.IO is so safe is that it is fully regulated and completely compliant with PCI DSS standards. Full encryption is used, and they offer robust protection against all kinds of fraud and even DDOS attacks. They also utilize KYC verification for new signees, which is the industry standard. They do everything right when it comes to security, and it is one of their biggest selling points of exchange.

We sincerely hope this article has helped you learn what to look for in exchange to ensure it is safe. Of course, before investing any crypto on any exchange, do your own due diligence and research to ensure you are comfortable with it.

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Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.
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