What is a Cryptocurrency Exchange?
Cryptocurrency exchanges are websites where you can buy, sell, or exchange cryptocurrencies for fiat currency, or other digital currencies. These exchanges function much like tradition banks in the sense that you sign up for an account that contains funds backed by the liquidity of the exchange itself. The main difference being that you have much more control of your funds and where they can go.
Most exchanges require users to create an account and go through a process known as Know Your Customer or “KYC”. This process is also much like opening a bank account where you will provide personal identifiable information such as your full name, birth date, and drivers license.
Simple right? Well many people don’t like the idea of needing to provide personal information to purchase their first Bitcoin, however as we have seen over the past few years as crypto grows in popularity, the most stable and likely exchanges to not be shutdown by government influence are those that comply with these types of identity policies meant to discourage fraudulent payments. Due to this, it is in your best interest to use exchanges that are reputable and adhering to government laws, at least for your initial fiat exchanges.
If you want to risk your funds on more unlawful exchanges, don’t be surprised if your funds are one day locked up in government holds, which recently occurred in both Chinese and Russian exchanges late 2017. With all of that said, if you are looking for secure, user friendly, and reputable exchanges that comply with ethical and legal guidelines, then keep reading to find the top five best cryptocurrency exchanges of 2018.