Why we thought the crypto community needed a Exchange Search Engine

Can you imagine yourself asking a friend: "hey, this summer I'm visiting London. Which flight should I take?". Well, that's what we all do when buying cryptoassets for the first time, and it makes no sense as well.

Most people in the crypto community have one or two favourite exchanges, and they rarely evaluate other options. They probably think that exchanges are all very similar, so why should they bother opening another account? But if they want to maximize the profitability of our crypto investments (which they should), it is paramount to choose the appropriate exchange for every operation they perform.

Depending on the assets you want to exchange and the specific amount of the operation, exchange fees will be significantly different from one exchange to another. Every operation is unique.

Just test our search engine with a couple of example operations and you will be astonished of how exchange fees significantly differ from one exchange to another. That's why you should never use the same crypto exchanges regardless of the operation, as you do not always use the same airline regardless of the destination.

Our crypto search engine aims to be very similar to the search engines we frequently use when buying a flight, renting a car or looking for accommodation. It analyzes all the possible combinations to help you find the cheapest way to buy or exchange cryptoassets, from origin to destination.

The reasons why we thought the crypto community needed a crypto search engine can be summarized as follows:

1. Fees have a huge impact in your investment returns. The more bullish you are regarding the future of cryptos, the more you should care about the bits of crypto that you are giving away to exchanges.

2. Planning a crypto operation is not straightforward. They usually require you to perform more than one trade and even to use more than one exchange.

3. Crypto exchange services behave as commodity services and we should treat them as such. After filtering out non trustworthy or non liquid exchanges, you should only care to chose the cheapest provider in order to maximize your profit.

4. Most people just compare trading fees when choosing a crypto exchange site. They overlook the huge impact that deposit and withdrawal fees can have in the whole operation. Indeed, the latter can usually have a greater impact for low and medium size operations.

5. Exchange fees significantly differ from one exchange to another. They might seem all very similar, but just compare their fees for a whole example operation and you will change your mind. Forever.

1. Fees have a huge impact in your investment returns

You invest in cryptoassets because you expect you'll have a pretty nice return in the future. You probably expect that in a few years Bitcoin will be valued above $50k, or $100k, or even $1 million!

If you truly believe those are plausible scenarios (I do myself), then you should be consistent and care so much about every bit of crypto you pay in fees. That is money you are giving away and that is never coming back.

When you pay a fee to an exchange, you are not paying it in fiat money, but in bits of a certain cryptoasset. Therefore, it makes no sense to calculate how much that fee represents today in fiat value. This is true unless you were planning to immediately buy back that fee with fiat money, but nobody does that...

Hence, whenever you pay a fee, you must think of the opportunity cost that it represents depending on your future expectations for that cryptoasset. The more bullish you are, the more you should care about the bits of crypto you are giving away.

A BTC withdrawal fee may represent today about $3 to $6 USD in fiat money, but the opportunity cost of that transaction could be somewhere between $50 to $1000 depending on BTC's future value. And that's only one transaction of the many you perform...

Finally, if you are trading small capitalization cryptoassets whose potential returns could be bigger, the opportunity cost of the fees you pay could be even higher than the above example.

2. Crypto operations usually involve more than one trade and more than one exchange

Planning a crypto operation is not straightforward. They usually require you to perform more than one trade and even to use more than one exchange.

Very often you will want to exchange two assets that are not directly traded among each other in the exchanges you use. For example, if you wanted to buy EOS with USD, it is likely that you won't have a EOS/USD pair available. Thus, you will need to perform two trades to complete the operation: USDBTC and then BTCEOS.

When there is no direct pair to perform the operation, you have to pay trading fees twice, and thus they become twice as important.

But sometimes the situation gets much more complex. Usually the asset you want to sell and the asset you want to buy are not traded in the same exchange site. This is usually the case when operating with fiat money, since the exchanges that allow fiat deposits usually have a limited amount of cryptoassets in their portfolio (e.g. Coinbase, Gemini, Bitstamp,...).

In these situations, you will normally use a first exchange to deposit your fiat money and buy some cryptoasset, and a second exchange to buy the actual cryptoasset you are interested in. In these types of scenarios lots of new variables come into play:

• Deposit, trading and withdrawal fees of the exchanges that support the coin you want to sell.

• Deposit, trading and withdrawal fees of the exchanges that support the coin you want to buy.

• Withdrawal and deposit fees of all the possible cryptoassets that you can use to move your funds from one exchange to another.

• The amount of the operation, as some fees are relative to that amount (e.g. trading fees) and others are fixed amounts (e.g. withdrawal fees).

In operations that involve two exchanges, you will have to pay up to 7 different fees: withdrawal fees of your wallet/bank, and deposit, trading and withdrawal fees of the two exchanges. The overall amount of fees you will pay is significantly higher, and thus it is critical to chose the cheapest path.

We understand it is very difficult for people to evaluate all these options in order to determine the most appropriate one. That's the reason we thought our search engine would be valuable for the crypto community.

3. Crypto exchanges are commodity services

In Bitcoin’s earliest days, you could count the number of cryptocurrency exchanges on two hands, but today the landscape has changed dramatically. If you take a look to CoinMarketCap rankings, you'll see that they list about 230 exchanges, and that is not the whole picture.

In addition, there are hundreds of regional and low volume sites that are fighting to carve a niche in the market. It is extremely difficult to quantify the overall number of crypto exchanges, but it may be north of 500 and rising.

We know we should try not keep our funds in exchanges longer than strictly necessary, and therefore our relationship with them should be very short. Just enough time to make the intended trade and withdraw our funds to a wallet we control. The shorter, the better.

In such type of short relationships, crypto exchanges become commodity services, and we should treat them as such. We should only care to chose cheapest one.

Lots or services that we regularly use are commodity services: flights, rental cars, accommodation, insurances, Internet plans, mobile plans,... For these services we usually choose the cheapest option that meets a certain criteria, and in order to do that we use search engines such as Kayak, Expedia, Skyscanner or Booking.

We usually don't care much about which airline takes us to the destination. We just want to get there as cheap as possible.

For crypto exchanges we should adopt exactly the same approach: after filtering out non trustworthy or non liquid exchanges, we should only care to choose the cheapest provider that maximizes our profit.

4. Don't let exchanges fool you. It's not all about trading fees

Most people just look at trading fees when choosing a crypto exchange site. They overlook the huge impact that deposit and withdrawal fees can have in the whole operation. Indeed, the latter may have a greater impact for low and medium size operations.

Trading fees are probably the most publicized figure by crypto exchanges. Most of their marketing will focus on it. However, you will usually find much less information about their deposit and withdrawal fees.

Some exchanges do not even publicize their withdrawal fees, and instruct you to check them when performing the operation. Obviously these exchanges are not proud of these fees when they are trying to hide them as much as they can. In these situations, be prepared for the worst.

Some exchanges will usually have high withdrawal fees to discourage you from withdrawing your funds. They'll say it's the miners fee, but you know it has nothing to do with it.

It is crucial to review them before depositing funds in the exchange. Otherwise, you may find yourself trapped in an exchange that charges you an outrageous amount for withdrawing your funds. Just do some research and you will find many people complaining about these situations.

Our crypto search engine allows you to calculate the end-to-end fees of the whole operation so that you can always make the most profitable decision.

5. The cost of the whole operation significantly differs from one exchange to another

You might think that all this is not that important because there can't be much differences among exchanges. But the truth is that differences among them can be huge.

Each exchange have their own fee schemes. Exchanges with low trading fees are usually a better option when trading large amounts, whereas exchanges with fair withdrawal fees will normally be more appropriate for smaller operations.

But there are so many variables that come into play that it is just impossible to set a couple of general rules to follow. Just play a bit with our search engine (try small amounts, large amounts, different coins, etc.), and you will see that the cheapest options vary for each situation.

For example, if we wanted to exchange 3000 USD to EOS, the cheapest alternative would have a cost of about $2.2 (for market maker fees) whereas the most expensive alternative would have a cost above $30. That's 13 times more! Not bad...

And once again, remember that we are talking here about today's valuations, and we shouldn't. Just think of the opportunity cost of those figures if cryptoassets continue their uptrend during the following years. Enormous.

You just cannot afford giving away that much money for free. That's why we invite you to start using the crypto search engine we have built.

If you have any suggestions or improvements you would like us to add, just reach us and we will make it happen for you.