At the present time, cryptocurrency exchange platforms still represent one of the best places to buy physical tokens, but the same as any other company, there are a few downsides involved. Now don’t get us wrong, just because exchanges are not perfect, we don’t advise buying crypto there, but it will be important to be fully aware of all the things involved when you decide to use them. Here are three of the main disadvantages of using crypto exchange platforms.
#1 High fees
The whole idea of using cryptocurrencies had been promoted to revolutionize the financial system since it provided a solution to send, receive and transact very fast. Even though that’s the case with most of the top cryptocurrencies (Bitcoin, Ether, Litecoin, XRP, etc.) people must know that there are fees involved in the process. Blockchain fees, exchange trading fees, deposit/withdrawal fees, all add up.
That means transacting with crypto could be faster than a wire transfer, but at the same time more expensive. Depending on the reason why you buy crypto, make sure it pays for the fees to take this alternative. And when dealing with exchange platforms, choose the one that has the smallest fees.
#2 Blockchain delays
Speed is not always guaranteed when it comes to dealing with cryptocurrencies. Blockchain delays can happen, especially when there are a lot of people like you sending/receiving cryptocurrencies. Although it does not happen constantly, it could intervene when you desperately need to transfer tokens as fast as possible.
What most of the beginners who use crypto exchange platforms don’t understand is the lack of regulation in the industry. Even top platforms have headquarters in financial havens, or places where regulation is very loose. That’s not an encouraging sign, give that you’ll trust an exchange to hold some of your funds.
The lack of regulation does not provide an incentive for exchanges to comply with strict rules for KYC/AML or security requirements. Before you think about using technical analysis for cryptocurrencies, make sure that the platform you’ll be working with is reliable.
Despite all the disadvantages mentioned above, cryptocurrency exchanges continue to operate and plenty of people buy/sell crypto each day. This article was just a “heads up” for those who are overly confident about the reliability of companies from the crypto space. Take all precautions, so the security of your finances won’t depend on anybody other than you!