- Cryptocurrency Exchanges – What They are, and How to Find the Best One for Yourself
- Where Can I Buy Cryptocurrency?
- Traditional Exchanges
- How to get started by trading AUD for cryptocurrency.
- Peer to Peer Exchanges
- How to Know What Type of Exchange to Choose
- Find Out More About Crypto
- Industry Leaders in Each Category
- Where to buy cryptocurrency with Australian dollars
- Best cryptocurrency exchanges
- Choose Wisely
- How to Buy Bitcoin in Australia for Beginners
Cryptocurrency Exchanges – What They are, and How to Find the Best One for Yourself
Cryptocurrency is an emerging industry that some people are very familiar with, and others not so much.
Where Can I Buy Cryptocurrency?
If you are considering investing or trading in this emerging market, and looking for how to buy bitcoin in Australia, you will first have to exchange your fiat currency for the cryptocurrency of your choice.
To do this, you will need to look for the cryptocurrency exchange that fits you best.
Before getting yourself too involved in the research process, the first thing you should understand is the types of exchanges, their benefits, and the potential risks that you should look out for.
If you are a just getting started with cryptocurrencies, or if you were an early adopter, it is always best to understand the process and different providers when it comes to exchanges.
There are both risks and rewards, depending upon your chosen method of obtaining your coins.
Traditional exchanges, such as Coinbase or Kraken, are organizations that buy and sell cryptocurrencies as a business. Often, these types of exchanges offer the best rates, but they also come with the most requirements.
Since these are organizations, facilitating, transmitting, and exchanging currencies, they have many regulations and procedures in place both as required by law, and also as a means to protect themselves from fraud.
Often, you will encounter wait times for either the transfer of funds from you to the exchange or wait times when it comes to verifying your identity.
How to get started by trading AUD for cryptocurrency.
After you are an established client, in most cases, the exchange will lessen the time it takes for you to receive your cryptocurrency.
The reason the transfer of funds takes a considerable amount of time is because of the limited payment options provided by traditional exchanges.
With traditional exchanges, most often, the only way to exchange your fiat currency for a cryptocurrency is through a bank transfer of funds to the exchange (or a credit card can be used with a select few). This transfer takes time to clear, delaying the time it takes for you to receive your cryptocurrency.
If you are considering utilising a traditional exchange, you should still carefully research the requirements set forth by that individual exchange.
Every exchange may set their own requirements and restrictions.
Requirements range from purchase limits to limits on the geographic area you may be located in. Before registering with any exchange, carefully review their policies to ensure the exchange fits your needs.
Peer to Peer Exchanges
Peer to peer exchanges, or exchanges where you exchange fiat currency for cryptocurrency through a transaction conducted between two private individuals. These peer to peer exchanges share many similarities with traditional exchanges, though they do come with their own unique risks and benefits.
Often, the wait time and verifications steps will be less than what you would experience with a traditional exchange.
You are taking on other risks though for these added benefits. Since you are conducting a private transaction with another individual, you are not afforded the same protections you would trading with an established, reputable, traditional exchange.
Most likely, your transaction on a peer to peer exchange will go smoothly.
Every day, thousands of people conduct successful peer to peer trades, but there are select instances when people are taken advantage of.
For this reason, one of the most important things to consider when using a peer to peer exchange is the feedback and history of the user you are conducting business with. The experience fellow users have had with traders will give insight into the experience you are likely to have.
If you can find someone on a peer to peer exchange that is reputable and you trust, you may find a peer to peer exchange better suited for yourself, over a traditional exchange.
With a peer to peer exchange, you often get your cryptocurrency in a short amount of time and you are free to use the currency as you wish.
You may have to pay a slightly inflated price when using a peer to peer exchange since the trader you are exchanging with is also trying to make a profit.
The payment method and amount of currency you are exchanging will also play a large role in the price you pay.
Some payment forms may be priced relatively competitive with traditional exchanges, while some offers may be priced significantly above traditional exchange prices.
The reason for this discrepancy is the risk your trader is facing when it comes to collecting their payments, some payment forms may carry more risk than others.
How to Know What Type of Exchange to Choose
The differences in the two main types of crypto exchanges may cause some pause when deciding on the best means to obtain your cryptocurrency.
Find Out More About Crypto
One method; traditional, comes with less risk, but you may have longer wait times and have to go through a more extensive verification process, especially for new clients.
On the other hand, if you opt to go with a peer to peer exchange, you are likely to get your cryptocurrency faster, often times in a matter of minutes.
But, you will likely pay a slightly higher margin over the spot price, resulting in a negative experience.
If you need to make the exchange and have the cryptocurrency in your possession in the faster amount of time, you likely will opt to go with a peer to peer exchange.
As long as you have chosen a common payment method, you should have little difficulty clearing the trade quickly. As mentioned previously, when considering a peer to peer trade, you may have several different deposit methods available. These payment methods will often determine the amount you pay and also the time it takes to get your cryptocurrency, again because of the different risks levels associated with each payment form.
If on the other hand, you are not in a rush to possess your cryptocurrency, or possibly if you are making a large purchase, you may be better off working through a traditional exchange.
With a traditional exchange, you will get the peace of mind of trading with a reputable company, along with the benefit of the most competitive prices, which could be critical for large purchases. Traditional exchanges can take 1 day up to 2 weeks to verify a user, it depends on a number of factors.
Industry Leaders in Each Category
Coinbase: Coinbase can be classified as a traditional exchange.
Coinbase is a US-based exchange, with over 10 million users and over $50 billion worth of cryptocurrency exchanged since the company was founded in 2012. Coinbase is one of the largest exchanges in the world (trading volume is massive), easily making its mark as one of the leaders in the traditional bitcoin exchange category.
Where to buy cryptocurrency with Australian dollars
At the time of writing, Coinbase lets you buy and sell Bitcoin, Ethereum, and Litecoin.
Bitstamp: Bitstamp is an exchange based on Slovenia, offering instant buy and sell orders of many cryptocurrencies.
Bitstamp is a large player in the traditional exchanges, facilitating millions of dollars’ worth of trades every month, Bitstamp is a great option, especially if you are located somewhere where other options are not available to you.
LocalBitcoins: LocalBitcoins is one of the largest and most well-known peer to exchanges available today.
With Localbitcoins, you are free to register an account to buy or sell cryptocurrencies. The size of the community and also the well-known aspect of this crypto trading platform is a benefit in your favor when looking for a trading partner.
Best cryptocurrency exchanges
The size of the community will ensure you have many options when it comes to trading partners and payment methods, hopefully also ensuring you can find the most competitive price currently available on the market.
Obviously, with the size and strength of the growing cryptocurrency market, there are many more options outside of the select few mentioned here.
These exchanges are just a few, and some of the largest and most well know options available. Before settling on any of these exchanges or any other exchange you may be considering, it is crucial you research the exchange and verify it is the best bitcoin exchange for yourself (while also looking at which altcoins you can buy on them – like Bitcoin Cash, Monero, IOTA, Verge, Ripple and NEO).
Keep in mind the location of the crypto exchange or trading partner (if you’re in the UK for example, check out our best UK crypto exchanges guide.
The same goes for exchanges in Canada), along with any history and reviews you can find online. When conducting any transaction of value, you want to verify the legitimacy of your trading partner or exchange.
Something that most frequent traders do is store their crypto funds in a “stable coin” so that they still have it in a digital currency but they don’t risk the fluctuations of most other coins.
A stable coin is a cryptocurrency that is meant to stay at a 1:1 ratio with the US dollar, the most popular one is called Tether.
How to Buy Bitcoin in Australia for Beginners
However, Facebook is planning to release their own stable coin which is an exciting development in the cryptocurrency space, this coin is called Libra.
If you are interested then check out our guide – how to buy libra.
Finally, verify you are able to complete any verification steps put in place by the digital currency exchange or your trading partner.
After you have completed the verification steps, the last step should be to confirm your desired payment method is available and complete your trade.
If you are considering getting involved with cryptocurrencies, or if you were an early adopter, it is still equally important you choose the best digital currency exchange.
A careful review of exchange types and the different options will help ensure your crypto trading experience is successful.
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