Disclaimer not financial advice. Not an expert. Anyone trading Chia or other cryptocurrency does so at their own risk.
This is part 2 in our series on trading Chia, this is installment is to go beyond Understanding simply what an exchange is and does. Check out part 1 first if you haven’t read it.
Picking the right Crypto exchange for your specific needs is essential. Before jumping head first into an Exchange someone recommends; you should consider a few things first.
The main things are:
Markets (pairings offered).
Security.(not all exchanges are the same)
Some other things you may want to consider include:
Market history (hacks/losses)
User experience (customer service)
functionality (special tools, bots, basic accounting)
Let’s start with finding our specific Chia market.
Firstly it is generally better to choose a cryptocurrency exchange that is registered in your own country to avoid regulatory actions against that crypto exchange. Nothing is worse than getting comfortable on a trading platform and then being banned from using it the next day. It is not always possible to do this but as a best practice it’s recommended.
You may be unable to register an account in your specific region so make sure you check before using the exchange.
A list of exchanges by country can be found here
Not all crypto exchanges offer the same pairings. It’s good to know which exchanges offer crypto-fiat pairings vs crypto-crypto pairings (example usdt is not usd). Knowing what exchanges offer is essential to cashing out your chia for real money in the most efficient fashion.
Keeping your chia safe should always be top priority when choosing an exchange(or doing anything crypto related). Two factor authentication, email alerts, cold wallets, all examples of exchange security. The more layers of security you have the better.
Exchange Transparency is another form of security I’d highly recommend, it’s always better to know who you are dealing with when it comes to business. If someone is willing to put their name on it; chances are it’s more legitimate.
Liquidity and fees:
The more liquidity (volume) an exchange has the quicker it is to complete transactions. Liquidity is different for different crypto pairings, so it’s best to check beforehand.
Fees usually start around 1% per trade. Exchanges almost always include withdrawal fees and sometimes can include deposit fees; so make sure to know what those are before depositing chia to an exchange. there can also be what’s called a “maker” and “taker” fee. A maker is someone who sets an order and waits for the order to be filled by someone else, and a taker is someone who makes immediate trades. We will cover this in detail in a future part of this guide. Simply put without getting too far ahead of ourselves; makers set limit orders, takers set market orders.
If you don’t pay attention to fees you could be left wondering “what happened to all my chia”.
Ease of Use:
Functionality and user Experience can be lumped into one large category.
The main thing to note about functionality is KYC (know your customer)
KYC is a high level of authentication; there are different requirements depending where you live and what exchange you use. Most KYC verification processes involve uploading personal ID, and proving your address. It is important to trust the exchange before going the KYC route.
Some exchanges require KYC to trade, and some do not. Some simply require KYC for certain functions to become unlocked or limits to be removed. There are benefits and drawbacks to KYC exchanges and non KYC exchanges.
Anonymity appeals to some and not others. We can Leave that up to each individual user to determine for themselves.
Beyond the KYC (non KYC) functionality of exchanges you want to look for functionality towards ease of use; is the user interface simple? Does it work well on desktop and mobile? What do other users say about the exchange? Each exchange is different so knowledge of the quirks about each one is essential to offloading your chia rewards effectively.
For the majority of this guide I will be using Kucoin to trade Chia. Mostly because I can’t use Okex or Huobi in Ontario (ip location banned). But also because of its ease of use(non kyc) and the addition of another tool I’ll be going into great depths about later in another guide, that being grid trading bots.
Doing your research on exchanges will save you a ton of headaches down the road. Now that we have chosen our chia exchange, it is time to trade!
Update: Now that you have finished part two, check out part three here.