December of 2017 saw a bit of a Bitcoin frenzy with premier exchanges briefly halting trading because of plunging prices and crushing volumes. While these slip ups can easily be charged to the growing pains of digital currency, you should be all the more careful when choosing BTC exchanges to transact and perform trading in. Along with the growing popularity and more widespread acceptance of digital currencies is the increasing interest that hackers have in the industry. As such, protecting yourself and your digital currency assets from the glitches that come with the very young industry is important so as to keep up with its rapid growth. Choosing the right BTC exchange is critical to keeping your assets safe from theft and hacks.
Block chains themselves are secure due to their decentralized nature, but individual exchange systems where customer records and funds stored are less safe due to the centralization of a few servers, which makes them easier hacking targets. Safer exchange systems that allow for a swifter and more efficient decentralized operation are currently in the works, but until they are rolled out, it is up to you to do due diligence on existing BTC exchanges that you can trade on.
The first rule of thumb is to ask important questions like how long the exchange has been operating, whether they are insured, who runs the system, and how their reputation fares in the market. Large exchanges are currently the best choices as they offer enough resources and orders to match buyers and sellers with economies of scale, hence keeping down fees and helping sustain safe trading. Choose an exchange that caters to your individual needs, e.g., is designed to help investors place market orders or has a reliable system to stop limit orders.
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