The most common way to obtain cryptocurrencies like Bitcoin and Ethereum is to purchase them on an exchange. Unless you are mining, purchasing on a local exchange, or receiving your first round of coins as a merchant selling goods or services, it is likely your first coin acquisition will be facilitated by a major exchange with global reach.

The question is, which exchange will it be? At the time of this writing, the top 10 exchanges by volume were:

1. Binance
2. OKEx
3. COM
4. BW
5. HitBTC
6. Bit-Z
7. Coineal
8. CoinBene
9. DigiFinex
10. BitForex

Just for a bit of perspective, Binance's adjusted 24-hour volume was US$881.8 million; the adjusted 24-hour volume at BitForex came in at $479.2 million. The volumes of the other eight exchanges fell somewhere in between. Why mention this? Because when you combine all of their market values together, you are talking a total value in the billions. In other words, there is a lot of money trading hands on cryptocurrency exchanges.

It should be self-evident that exchanges will do whatever they need to do to compete for their share of the market. And why wouldn't they? The market is so lucrative that any exchange not willing to compete might just as well shut down.

All of this should mean something to you as a crypto user. Even if your only goal for cryptocurrency is to be able to gamble at the sites listed here on MegaMoolah.com, any exchanges you choose to buy from will have an impact on what you do with your crypto.

Choosing a cryptocurrency exchange should never be done haphazardly. As with all things crypto, buyers should do plenty of research before making a choice. They should think through the positives and negatives of each of their potential choices, then make a decision based on what appears to be best for their current circumstances.

Here are the top five things to consider before choosing an exchange:

1. Legal jurisdiction

One of the benefits of trading with Bitcoin, Litecoin, etc. is the ability to buy and sell without government and central bank interference. However, true freedom from interference does not really exist. Governments may not be able to regulate how individuals trade Bitcoin among themselves, but they can regulate how businesses do business in the crypto arena.

Governments can and do regulate exchanges. Therefore, your first consideration is jurisdiction. An exchange licensed in the U.S. or Canada may not be allowed to conduct transactions between buyers and sellers in South America or the Middle East.

There may be another exchange that serves most of the Eastern Hemisphere from a base in the Seychelles but, due to local laws, is not allowed to accept transactions from buyers and sellers in certain parts of North America. The point is that exchanges have to obey whatever laws are in place within their jurisdictions.

This immediately narrows your list of possible exchanges. You can cut out all of those not allowed to legally serve you. Furthermore, your best bet is to go with an exchange that has the broadest possible range. The larger the reach, the more likely you will find the kind of deals you're looking for.

2. Security and history

Cryptocurrencies are pretty secure in and of themselves. That doesn't necessarily mean exchanges are. There have been plenty of stories in times past of exchanges being hacked by criminals who ended up draining individual accounts. Therefore, the next consideration is security.

Security involves two things. First are the actual methods and strategies an exchange uses to protect itself. The second is an exchange's history of security-related issues. You can find plenty of information on both components by doing some research online.

Given that cryptocurrency was born out of technology, the internet is rife with security information. Just Google any exchange you are looking at and see what comes up in the news feed. An exchange with a history of being hacked is one you are going to want to stay away from. Another that appears to have a pristine record is worth consideration.

Exchange reviews are also helpful but bear in mind they may be biased. It is not beyond the realm of possibility to suspect that some positive reviews are written by people who have ties to those exchanges. So just be careful with reviews. Put more stock in new stories.

3. Coin availability

Next on list is the availability of certain coins. Just like FOREX exchanges offer certain fiat pairs - like USD/EUR for example - crypto exchanges offer coin pairs. A good example is BTC/ETH. They also offer pairs of one crypto to one fiat, as in USD/BTC. Pairings tell you what coins are available on a given exchange.

All of the biggest and best exchanges deal in the top five to 10 coins. You are talking cryptocurrencies like Bitcoin, Ethereum, XRP, EOS, Litecoin, and Bitcoin Cash. If you get beyond the top 10 or so, you may not find what you're looking for. As such, some experts recommend using a major exchange for the top-selling coins and several smaller exchanges for lesser traded coins.

This strategy of mixing exchanges is intended for people who want to diversify their holdings. If your only concern is getting your hands on some BTC or LTC so you can play Mega Moolah, a single exchange will suit you fine.

4. Fees and charges

Cryptocurrency exchanges are businesses first and foremost. So just like the currency exchange at the airport, any crypto exchange you do business with makes its money by charging fees. Those fees are sometimes in addition to slightly higher exchange rates. At any rate, take a good look at fees and charges before choosing an exchange.

Fees are almost always tied to the frequency of trading. So the more you trade, the more you spend on fees. Cryptocurrency trading is one area in which you do not save on volume. That's because fees are charged per transaction. You pay less in fees on a single $1,000 transaction than you would on ten $100 transactions.

The one thing about fees that seems to bother cryptocurrency users is the fact that crypto transactions were originally tended to be low or zero-fee transactions. They generally are between buyers and sellers. In other words, using your bitcoins to gamble online creates a transaction directly between you and the casino. Any fee you pay is likely to be minimal. You might not pay any fee at all.

Transactions conducted on exchanges are different. They are subject to pretty significant fees because that's how the exchanges make money. They supply a service by connecting you with other buyers and sellers. They are compensated for this service through the fees they charge.

5. Liquidity

The question of liquidity directly affects two things: exchange fees and the speed at which transactions are processed. If you are not sure what liquidity is, think of it in terms of cash. An exchange's ability to 'liquidate' its assets is the ability to convert them into hard, cold cash.

The unfortunate thing about liquidity is that exchanges are not known to openly broadcast it. They obviously do not want users to know because such knowledge could affect their businesses. This is especially true of exchanges with low liquidity. Your goal is to find exchanges with high liquidity.

A general rule states that higher volume indicates higher liquidity. While that's not always true, it is more often than not. Another gauge of liquidity is market capitalization. You can get a good idea of how liquid an exchange is simply by running a search on the topic of exchanges by volume and market cap.

Concerns of liquidity are most pronounced when you are talking smaller exchanges. By their nature, smaller exchanges have fewer assets to work with. Fewer assets equals lower liquidity. This reality indicates going with one of the bigger exchanges if most of the coins you want to trade are on the top 10 list.

Wrapping it up

We have given you five things to think about before choosing a crypto exchange. Note that none of the five are any more important than the rest. We are not suggesting that you make jurisdiction your number one priority, for example. It is important for obvious reasons, but jurisdiction alone should not be the deciding factor.

The idea is to consider all five things relative to one another and then pick an appropriate exchange based on the overall comparative results. If you approach it this way, you will have an easier time finding an exchange that suits your needs. If you take more of an absolute approach, you will quickly discover that there is no such thing as a perfect exchange.

Finding a good exchange could be the start of something big for you. But don't forget that you ultimately maintain control over all of your cryptocurrency holdings. If you start with one exchange and decide next year that you no longer like doing business there, that's fine. Start searching for another exchange. You should ultimately maintain control over all of your coin holdings. Do not let an exchange dictate how you are going to buy and sell cryptocurrencies.