A well-run crypto-exchange should have much in common with a well-run street market. What should you look for?
Transparent and fair prices. In most cities where they can be found, street markets are well known by local people for the low prices and high quality of the produce that the stallholders offer. Regardless of what you may be looking for – fruit, vegetables, meats, fish, cheeses and/or much else besides – it is almost always on offer from more than one stall. The competition means that all stallholders have to offer a fair deal to customers like you. If the crypto-coin that you want is traded on more than one crypto-exchange, do some homework to ensure that you are not paying above the odds as a buyer. If the crypto-coin that you want is only traded on the one exchange, be sure that you can rationalise the price that you are paying.
Best execution. Execution is simple in a street market. You agree to buy something at the prevailing price, make payment (with stallholders preferring cash to cards in many places) and take delivery. If you are buying a crypto-coin through a crypto-exchange, you should ensure that the price at which you are buying is fair relative to the prices at which other people are buying the same crypto-coin at about that time. If the price of the crypto-coin rises sharply at the time that you are buying, the implication is that the market is illiquid or that, for some other reason, you are not getting best execution.
Payment against delivery. As noted above, ownership of goods changes in a street market at the moment that you make payment. In the Crypto World, there may be a delay between the time that you pay for a crypto-coin in an Initial Coin Offering (ICO) and the time that you have the ability to do what you wish with the crypto-coin. If you are buying an existing coin, though, you should have control of it from the moment that payment is made.
Custody. A street market generally does not provide custody services. Once a customer has made a purchase, he/she is responsible for the safekeeping of the goods. Fresh foodstuffs that are not consumed immediately are preserved in the fridge. Some crypto-exchanges do not provide custody services. Once you have bought a crypto-coin, you are responsible for keeping it safe – ideally in a cold wallet. If, however, the crypto-exchange that you are dealing with does hold your crypto-coins for you, you should ensure that you will be compensated for any losses due to theft by hackers.
Accessibility. Street market stallholders typically work long hours, and often over six days a week, in order to provide you, and the other customers, with the convenience that you need. In most places, street markets are easily accessed by public transport. A crypto-exchange should be accessible by Internet from anywhere in the world on a 24/7 basis.
Variety. Some street markets specialize in just vegetables; others, in meat or fish. In many street markets, though, you can find dozens of stalls, which offer a bewildering variety of fresh produce, other foodstuffs, clothing, leathergoods and much more. The street market as a whole can therefore serve as your ‘one stop shop’. The greater the number of people who come to the market, the greater the opportunities for each of the stallholders. The same is true of crypto-exchanges. A crypto-exchange where fewer than 10 crypto-currencies are actively traded is much less attractive than, say, one where 50 or more are traded.
Globality. Street markets are very much In Real Life. They are associated with particular cities and communities. The stallholders are locals. Because much of the produce that is being sold is perishable, and is consumed shortly after sale, it usually comes from farms that are nearby. Nevertheless, in larger and more varied street markets, some of the stallholders will offer exotic foods and other goods that come from around the world. The greater the diversity of sources, the easier it will be for you to find exactly what you might want. A crypto-exchange should be able to accommodate ICOs from many countries, and clearly attract investors and traders from around the world.
Regulation. Most street markets are subject in some way to regulation by the city council and the health authorities. If stallholders are dealing in fresh produce, the market place will have to be kept clean. For these reasons, the areas in which street markets can operate are usually clearly marked. Often there will be a very obvious police presence – to ensure security and tranquility in places that can become very crowded. Overall, there will be an atmosphere of trust. The stallholders will trust each other and the customers that they serve. The customers will trust the stallholders. Ideally, a crypto-exchange will be overseen by a well-respected regulator. The greater the trust in the crypto-exchange, the more likely it is that people will deal through it. A crypto-exchange that is not formally regulated should at least show that it maintains the same standards and procedures as one that is so regulated.
Community. This is perhaps the most important feature of a street market. A successful street market is based around a strong sense of community. In many places, people will live in, around and above the street market. Many of the stallholders will have had a presence for years (or generations) and will look out for each other. Having to work year-round and in any weather conditions, the stallholders are seriously committed to the life and community of the market. Whether or not there is an organization that actually markets the street market, it will be well known within its own city. Often there will be good reasons for you to go to the street market even if you do not want to buy anything. You may want to go to a restaurant or café that is next to the street market – or you may just want to go to enjoy the atmosphere. A good crypto-exchange is one which clearly makes efforts to develop and promote a community through education, marketing and much more. You should want to engage with the crypto-exchange even if you are not actively looking to buy or sell crypto-coins.