This is going to be brief, but I wanted to stress a word of caution to my fellow crypto-currency traders when using websites such as Changelly, especially newbies just getting in the game.
Don't get me wrong, I use them and I use them frequently, especially when buying XRP. However, I do want to caution those that use them without doing the math themselves on the exchange rate that we're getting. It's easy to accept "Exchange Crypto Currency at the best rate." and move on with the transaction without doing the math. However, a friend of mine recently texted me about how surprised he was when he received such a small amount of XRP when he made his purchase.
Unfortunately, he wasn't exchanging currency... he was purchasing using a credit card. This changes things drastically. He didn't want to wait 7 days for Coinbase to push his purchase through, which I completely understand, so he made his way over to Changelly. He made a purchase for a few hundred bones and went on his merry way. Had he compared his purchase price to an actual exchange, there's no way he would have went through with the transaction.
So how bad did he get ripped off?
At the time this article gets published, Coinbase has Bitcoin selling for $2,325.94. Changelly is selling it for $3,670. Yes, you read that correctly. Changelly is charging $1,344 MORE for a single Bitcoin.
Luckily, my friend was only buying a few hundred bucks worth... so while he lost probably $100 in that transaction, it wasn't the end of the world for him. But it does open your eyes a bit.
Moral of the story... Double check your rate against the market rate and make good informed decisions.
Happy trading!
UPDATE
I actually reached out to Changelly to ask them about their insanely high rates when it comes to making purchases with a credit card, and received the following response:
Cryptocurrencies available for credit cards are offered by a few companies. All of them have relatively high rates. This feature needs to be enhanced, and we'll do anything for better user experience. Looking for new traders.
Great, so as long as everyone else is charging a lot to use the credit card, may as well up the ante and charge an extra $1,300 per BTC. But I suppose that's the glory of capitalism... if people are willing to buy for an outrageous price, someone is going to be willing to sell it to them.
Sounds like that would be a good arbitrage opportunity.
Absolutely! So long as you have the initial funds to set up an exchange site like that... if people are willing to give you an extra $1,300 per BTC, buying and selling for profit becomes easy lol
SERIOUSLY WHAT THE HELL HOW DID I NOT SEE THAT!
I would have sat there all day and bought and sold BTC
Thanks for the warning.
Not a problem! It's easy to get distracted from the real rate you're getting when there are so many decimal places, and the desire to push the transaction through quickly. But taking the time to actually calculate your purchase/exchange yourself could potentially save you hundreds (not to mention heartache)!!
Good to know.
Yeah! When he told me the exchange rate he got, I was pretty taken back... gotta do the math for yourself to ensure it makes sense!
Thank you for the information! Really important to always check the prices, I agree (:
You're welcome! It's just one of those things that most people, especially newbies to crypto exchanges, realize when they make their first few transactions.
That's why you should only start with a small stack of money and increase if after the first few experiences (:
Thats exactly the way I used to make any transaction using any exchange/service that I have no experience with: first let's try with 10$, then maybe 50$, maybe 100$ max. After couple of transactions and after some research over the net - I can try bigger amounts, not before.
@cobalus @biterly I absolutely agree... try it with a small amount first to make sure you understand the process of what you're doing. After that, increase the dollar value for whatever your goal is. Just make sure you're checking that rate for yourself. Sometimes it's worth it to wait on Coinbase to process payment than get taken by an exchange site.