A lot of cryptocurrency rely on central exchanges for trading purposes. However, moving money quickly between different platforms has proven to be increasingly difficult. The Bitcoin network is either slow or too expensive. Users are looking for new solutions in the form of altcoins. Finding the right currency to do so is not all that easy, though. It seems there are some reasons why people flock to specific currencies.
Right now, it seems people convert into a few different currencies to get funds across quickly. The main choices are Litecoin, Dash, and even STEEM. All of these currencies have a few things in common which Bitcoin sometimes lacks. Cheap fees, fast confirmations, and being supported on major exchanges all certainly help. STEEM is perhaps an exception as far as this last factor is concerned, though. Then again, for the platforms supporting it, it can be a valuable tool regardless.
Bitcoin is not the Best Money Mover Between Exchanges
One thing to keep in mind when using altcoins is the increased volatility. After all, buying large amounts of coin X will drive up the price on one platform. By the time your coins have moved to a different exchange, the price may very well crash. That means taking a small loss at certain times can be absolutely necessary. Then again, it is sometimes better than waiting hours for Bitcoin confirmations. It is a tough balancing act, to say the least.
Some users also prefer to use XRP, for obvious reasons. It has the lowest fees of all and is listed on every exchange one can think of. The markets aren’t all that liquid most of the time, though. Now that the XRP price is plummeting, choosing this particular coin may not necessarily be a good idea. We can only hope the need for centralized exchanges will soon be gone completely. Decentralized solutions are the future, that much is evident. It would also allow users to freely exchange currency in trading pairs they want.
Last but not least, one also has to keep in mind not every exchange processes withdrawals instantly. Although this situation has gotten better, it’s far from perfect. Some companies send transactions in mere minutes. Others take an hour or so before approving it on their end. This is the main problem when dealing with companies acting as custodians. You don’t control the money and your withdrawal time is beyond your control. It is evident Bitcoin isn’t perfect for moving money around by any means. Altcoins certainly have their role to play in this particular regard.
Header image courtesy of Shutterstock