Kraken vs Poloniex 2020: Best Cryptocurrency Exchange Comparison
Choosing the right cryptocurrency exchange that meets your investment needs is crucial. Whether you are buying, selling, or just trading, each exchange has its own sets of differences that might be more important depending on what you are trying to do. To compare the differences between two of the most common crypto exchanges, read our full Kraken vs Poloniex guide so you can pick one that fits you.
Kraken and Poloniex have had completely different growth trajectories. Kraken has managed to retain ownership and upper management of the exchange since inception in 2011. Market conditions have seen floods and droughts of traders and investors flock to and away from both exchanges. Choosing the best exchange is important
Poloniex, on the other hand, has changed owners many times since inception in January 2014. To their credit, they did manage to stay afloat despite losing +/- 98% of their global exchange trading volume. Plagued by regulators and delistings, they effectively drove their trading volume down to where it is today.
Like a phoenix, Poloniex seems to be rising from the ashes, pushing towards a new life. They have lifted KYC bans, banned American traders and investors and have added a fresh round of coins. The TRXMarket has been rebranded Poloni DEX. Poloni DEX has offered free listing for all TRX-20 tokens.
Kraken, on the other hand, has very stringent verification processes that defy the purpose of the crypto ethos. Kraken has margin trading for United States citizens, which makes it palatable for public disclosure. Security and coin safety trumps everything in the world of crypto.
Kraken is a crypto exchange founded by Jesse Powell in July 2011. Jesse Powell worked at Mt. Gox, he felt the exchange landscape could be improved with properly implemented security controls and improved customer experience. To date, the Kraken Exchange has not experienced a single hack since its inception. Their customer experience was strained due to the volume of users in 2017 but in stable markets, their customer services are prompt. Kraken is located in San Francisco, California.
Kraken is at the front end of bringing Cryptocurrencies to the institutional masses. They were the first crypto exchange to have their trading data displayed on Bloomberg Terminals. Kraken is also at the forefront with regulation as the Tokyo Government court-appointed Trustee and Germany’s BaFin regulated Fidor Bank.
Kraken was one of the first Cryptocurrency exchanges to offer a leveraged margin to the crypto community and U.S. Citizens. It is also the first Cryptocurrency exchange to pass a cryptographically verifiable proof-of-reserves audit.
Kraken investors include Blockchain Capital, Digital Currency Group, Hummingbird Ventures, Money Partners Group, and SBI Investment.
Poloniex is a Cryptocurrency exchange founded by Tristan D’Agosta in 2014. Under his supervision, the exchange managed to secure 50+ % of global exchange trading volume.
Poloniex had a diverse offering of altcoins, no KYC was needed if the account holder didn’t mind a maximum withdrawal of $2000 per day. Lending and margin trading was available to everyone. They accomplished this by being a Crypto to Crypto exchange and not being an onramp which dealt in fiat.
On the 26th of February 2018, Circle announced they would purchase Poloniex Cryptocurrency exchange for the sum of $400 million. This started the downward spiral for the exchange and Circle. 2018 was an interesting year for Poloniex, they began a delisting spree and required full KYC to trade on their platform due to regulatory compliance. Poloniex also had to close its margin trading and lending services to US citizens. Circle moved the exchanges legal location from Delaware to Bermuda.
Poloniex was then split from Circle to create Polo Digital Assets, Ltd in October 2019. At this time the exchange had little more than 1% of the global exchange-traded volume. Justin Sun, founder of the Tron TRX crypto platform, and an unnamed Asian investment firm acquired Poloniex for $400 million. Circle effectively wasted 18 months to break even on their investment, this was a monumental loss for Circle and saw the unwinding of their stability.
Circle’s co-CEO Sean Neville, stepped down but he will remain as an independent director on the Circle board. He will also continue to collaborate with Circle and Coinbase on the USDC stable coin project. The circle had to lay off 40 employees from May 2019, 30 employees were laid off before the Poloniex was sold and 10 were laid off after the co-CEO stepped down.
To be fair, Circle did improve the exchange considerably, improving support and building a mobile app, while dealing with regulatory concerns. Unfortunately, they bought the top of the 2017 bull market and had to suffer a monster bear market, from the start of 2018 through to the end of 2019. What makes the sale even worse as they went on to capitulate at the bottom of the market.
All Americans are banned from Poloniex as of 1 November 2019. Poloniex has shifted from a Global Cryptocurrency exchange to an American cryptocurrency exchange and back to a Global cryptocurrency exchange with a strong push for the Chinese market. Chinese Investors and traders can access Poloniex from pwang.com, a redirect website to get Chinese traders and investors onto the exchange. Poloniex will also accept Chinese identity documents.
The new owners plan to spend $100 million on developing and improving the exchange with 100 plus full-time employees. To start their new Poloniex and return the exchange to its former glory. They reduced all spot fees to 0% from the 21st October 2019 until the 31st of December 2019 to get traders and investors back onto the platform, as well as lifting non-KYC banned accounts. All non-KYC accounts can withdraw $10,000.00 per day, non-KYC accounts cannot margin trade. Poloniex is now located in Seychelles, as such the private investor firm details are not available.
Kraken systems are designed for the major leagues of trading and investing. Their systems are stacked with security features that have been built in to force user security.
While Kraken’s history of support is poor to average at best, they still respond to tickets/user complaints or issues. They have done a lot to work on this and their recent stats show improvement.
Kraken has reasonable leverage of up to 5x of your account balance. Professional pit traders think 4x is gambling not trading, and most professional forex traders keep margin limits at 10x. Kraken has double the margin trading ability of Poloniex at 2.5x.
You can margin trade the following assets on Kraken; Bitcoin (BTC), Ethereum (ETH), Tether (USDT) Monero (XMR), Ethereum Classic (ETC), Augur (REP), Ripple (XRP), and Bitcoin Cash (BCH)
Kraken uses Cryptowatch for its charting services. While it doesn’t compare well against Tradingview in programmability or Coinigy for the total number of exchanges, the Cryptowatch service is still excellent and easily tradable. All of Krakens’ assets can be charted on Tradingview or Coinigy. An investor or trader could also trade all the assets using Coinigy’s API.
- Professional trading interface
- A large number of cryptocurrencies and trading pairs
- Largest Liquidity in EUR markets
- Never been hacked
- U.S. Margin trading
- Verifications times are longer
- Server issues when the market has massive swings
Cryptocurrency exchanges have always been scary to trade on. Will scheduled maintenance be the last time you see a positive account balance? Poloniex systems, in their current state, are something traders and investors seriously need to think about.
On the 30th of December 2019 Poloniex announced A data leak of 5.5% of their users’ emails and passwords (this could just be user error, end users are known to reuse the same password everywhere and generally use one email address for everything), this is allegedly linked to another exchange being compromised.
On the 12th of February 2020 between 17:53 UTC and 18:05 UTC, a bug occurred in the exchanges order execution code. Poloniex’s response was to reverse every trade that took place and freeze withdrawals. We agree with freezing withdrawals to protect traders and investor’s funds in case of a hack.
Most responsible and accountable exchanges take the financial loss of bad code with an insurance fund. Not financially harming victims of the bug but also rewarding traders who were lucky enough to profit, this is what happened with GDAX and the Ethereum Flash Crash (this was not faulty code but market conditions, nevertheless, the standard and president was set).
Poloniex has been actively seeking to bring back traders. With 3 airdrop campaigns of USDT and TRX20. The TRXMarket was rebranded into Poloni DEX which controls the largest decentralized Tron TRX marketplace. They lifted the ban on all non-KYC accounts and implemented a maximum withdrawal limit of $10,000 for non-KYC accounts. Implementing pwang.com for people in china to use Poloniex was a masterstroke.
Poloniex’s history of support is worse than Kraken due to their size, at one point they had 50+% of the global exchange volume, which is a tall order for any Cryptocurrency Exchange. They have improved their services under Circle and a lot of exchange frustration has been removed by non-KYC accounts. We suspect most of the issues came from non-KYC accounts in the 2017 bull market but only time will tell if this will be an issue again for them.
Poloniex has limited leverage of up to 2.5x of your account balance but they have a better coin selection. You can margin trade on the following assets on Poloniex; Bitcoin (BTC), Ethereum (ETH), Tether (USDT), USD Coin (USDC), Monero (XMR), Ethereum Classic (ETC), Litecoin (LTC), Ripple (XRP), and Bitcoin Cash (BCHABC), Bitcoin SV (BCHSV), Dash (DASH), Cosmos (ATOM), Stellar (STR), EOS (EOS), and Dogecoin (DOGE)
Poloniex uses Tradingview for its charting services. The service is limited and doesn’t compare well against Tradingviews original service. All assets listed on Poloni DEX are not available to chart in both Tradingview and Coinigy. Poloni DEX also uses a limited version of Tradingview.
- Professional trading interface
- A large number of cryptocurrencies and trading pairs
- Non-KYC accounts
- Low Fees
- Global Margin Trading excluding the U.S.
- Poloni DEX
- Insurance Fund
Kraken has the reputation of being the cheaper exchange compared to other exchanges but not against Poloniex. Kraken does serve the more security conscious trader and investor, additional, funds are cryptographically verifiable with a proof-of-reserves audit. These conditions are worth the expense.
Kraken fees need to be reviewed and understood to trade effectively on their platform. The tiers offered can make all the difference to the monthly bottom line for a professional trader or investor. The costs of trading can be astronomical to the users’ trading balance when they are not taken into account.
Poloniex is aggressively seeking business from traders and investors. Due to this, their fees are extremely competitive. Compromises are made for this reduced cost. Poloniex is the smaller exchange with less volume Coinmarketcap, and FTX Volume Monitor both place Kraken above Poloniex.
Kraken is one of the safest exchanges in the Cryptocurrency markets, not suffering a single hack. This is by design and not by accident. Kraken engineers have taken the time to design a system that works and is usable for the most part.
Another amazing feature is the Global Settings Lock. This feature blocks IP addresses that are not associated with the account.
This can be spoofed/made to look like another address is being used than the actual originating address, meaning someone in the United States can look like they are computing over the internet from Austria. This would have to be a targeted attack and, for the most part, probably the user’s fault. This would have nothing to do with Kraken.
Kraken allows for the use of 2FA which makes hacking your account harder but not impossible.
Poloniex is not as safe as Kraken. Considering how they handled an internal bug on the 12th of February 2020 and not compensating users for the effects of the bugs with the use of an insurance fund, we have concerns about funds left on this exchange. Their location also makes it harder to seek legal resolution to problems.
Poloniex uses Email 2FA for new IP addresses. Poloniex will send an email to your registered email account. This will contain a series of numbers that can be input after your login details. This is safe unless someone hacks your email account finds an old Poloniex email or you mention your crypto interests online. You can also use 2FA to lock down your account further on Poloniex.
This boils down to how the investor or trader interacts with either exchange and the available markets. Both Kraken and Poloniex have their respective markets. Kraken is America focused and Poloniex has shifted towards China.
Kraken is the more reliable exchange, simply because we can see what their management has done in the past and can predict what they are likely to do in the future. We don’t see a problem using Poloniex, as trading of investment platform the fees are cheaper but would strongly advise against keeping funds on the exchange long term.
To be fair we don’t trust Kraken either, not your keys not your crypto. Both exchanges should be used when needed, at all other times purchased coins should be in hardware wallets. Only when coins are going to be sold immediately should they be on an exchange.
We feel confident using both exchanges. If the investor or trader follows proper crypto hygiene; simply use a hardware wallet, back up the hardware wallet and never leave funds on an exchange. Secure the exchange with 2FA and create a 2FA backup.
- Kraken vs Coinbase
- Bitstamp vs Kraken
Author: Jesus Cedeño
UN report reveals North Korea steals from crypto exchanges to evade sanctions
The US. Treasury, Department of State, Department of Defense, and the FBI have issued comprehensive guidelines on cyber assaults allegedly initiated by North Korea. The guidance aims to promote international cooperation against DPRK’s work in cyberspace. It stated that it is vital for the international community, network defenders, and the public to stay vigilant and to work together to mitigate the cyber threat posed by North Korea.
The United Nations had also reported earlier that the North Korean regime has been using cyberattacks and stealing cryptocurrency from all around the world to fund its nuclear weapon programs. The guidance issued by US agencies also refers to the alleged involvement of the infamous Lazarus Group in hacking multiple cryptocurrency exchanges. It also mentions the infamous WannaCry ransomware that took place in 2017. US agencies attribute North Korea’s interest in cryptocurrencies and cyberattacks to its desire to fund a nuclear weapons program. The guidelines state that under the pressure of robust US and UN sanctions, the DPRK has increasingly relied on illicit activities to generate revenue for its weapons of mass destruction and ballistic missile programs.
Earlier, the US police arrested two Chinese citizens for helping North Korean hackers launder more than $100 million in cryptocurrency. Blockchain analysis firm, CipherTrace released a detailed analysis of how the hackers stole cryptocurrencies through several banks and crypto exchanges. Last month, the Department of Justice charged Tian Yinyin and Li Jiadong with laundering over $100 in cryptocurrencies to benefit North Korean co-conspirators. According to the report, the North Korean co-conspirators used fake identities and manipulated photos to circumvent the KYC procedures at several exchanges.
Earlier this year, former Ethereum researcher Virgil Griffith was arrested by the FBI for attending a crypto conference in North Korea and allegedly helping the nation evade sanctions using blockchain and crypto.
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.
Author: By – Jai Pratap
How to buy Beam (BEAM) coin: Exchanges where it’s listed
Beam coin is an anonymous privacy-oriented cryptocurrency based on the Mimblewimble protocol. Its transactions are private and anonymous by default.
In this guide, we’ll explain what sets Beam coin apart in the world of cryptocurrency as well as where you can currently buy, sell and trade it.
Binance Cryptocurrency Exchange
Go to site
Bitit Cryptocurrency Marketplace
Gate.io Cryptocurrency Exchange
At the time of writing (February 2019), you can only buy Beam with Bitcoin (BTC), Ether (ETH) or Tether (USDT). You cannot yet buy it directly with fiat currency such as GBP or USD.
If you want to sell Beam, the process for doing so is the same as buying, except you reverse the coins you’re buying and selling.
To sell Beam, you can either buy BTC, ETH or USDT with Beam, or sell your Beam in exchange for BTC, ETH or USDT.
At the time of writing (February 2019), the only wallet that supports Beam is the official one created by Beam.
You can download it from Beam’s website.
Beam was the first cryptocurrency to go live with the Mimblewimble protocol. It combines the ideals offered by the privacy protocol with the regulatory friendliness of opt-in auditability.
Anonymous cryptocurrencies facilitate private transactions by allowing you to move money without revealing who’s sending or receiving it.
There are several privacy cryptocurrencies that use different systems to achieve this.
For example, Monero hides the identities of its users by mixing decoys into a transaction. Zcash conceals addresses and allows for optional shielding of transaction values.
In Beam’s case, it doesn’t even show the transaction amounts or the addresses of the sender or receiver. But where needed, it allows users to attach data to a transaction in order to create an audit trail for regulatory and compliance purposes.
Beam achieves anonymity with something called the Mimblewimble protocol. It’s one of the only cryptocurrencies in existence to use this protocol.
Mimblewimble is a framework people can use to build privacy cryptocurrencies. It consists of several key elements, each of which grants a certain type of privacy. For example, one element hides transaction amounts and coin histories while another conceals wallet addresses.
These individual elements were separately designed for Bitcoin originally, but Mimblewimble was the first to put them all together in a way that they could work together.
The result wasn’t compatible with Bitcoin though, which is why Beam was created from scratch.
Two cryptocurrencies quickly emerged and started building on top of Mimblewimble. One of them is Beam, and the other is Grin.
One of the main differences between them is that Beam is a corporate venture with organised development, venture capital backers and commercial branding. By contrast, Grin is the work of mostly anonymous volunteer developers.
The technical foundations of Beam have many people regarding it as a promising competitor in the privacy coin space.
As the thinking goes, privacy is a highly desirable feature for digital currency in a quickly changing world. But at the same time, a completely anonymous digital currency is unlikely to receive a warm welcome from regulators. Beam, with its opt-in disclosure modes, is an effort to solve this.
- High volatility. Cryptocurrencies are volatile by nature, but Beam might be especially volatile due to its newness and low circulation to date.
- Questionable demand. Real-world demand for cryptocurrency is still limited, and when given the choice of optional privacy modes, the majority of people prefer not to use them. This suggests that Beam may struggle to gain traction.
- ASIC centralisation. Beam cannot be realistically mined with GPUs, so ASIC miners dominate its Equihash algorithm. The economics of Beam mining trend towards centralisation.
- Equihash vulnerabilities. Beam currently has a hashrate of about 5.1MH/s. It is currently highly vulnerable to a 51% attack. If it ever achieves sufficient liquidity without a commensurate increase in hashrate, it may become profitable enough for someone to attack it.
- Centralisation hazards. There is a single, identifiable company behind Beam development. This presents a potential vulnerability if anyone wants to shut it down.
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Disclosure: At the time of writing the author holds ETH.
Author: Andrew Munro
Crypto Scams on the Rise and Can Still Affect Bitcoin’s Price
Bolstered by the new coronavirus pandemic, scams continue to be rampant in the cryptocurrency world. From malware to fake investment programs and even fake donations to health organizations, scammers are known for taking advantage of desperate times and desperate people. One of the most prominent scams in the industry, PlusToken, has come under the spotlight again after rumours emerged that the March crash was caused by its operators selling their stolen Bitcoin (BTC).
According to research by Chainalysis, a blockchain analysis company, PlusToken did not cause the “Black Thursday” sell-off of March 12. In a recent webinar, Chainalysis sought to bring clarity to the impact of the COVID-19 pandemic on cryptocurrency markets by analyzing key points in on-chain data such as exchange inflow and more.
During the presentation, Philip Gradwell, the chief economist at Chainalysis, addressed a somewhat common opinion that the crypto market crash that happened March 12 to March 13 was caused by PlusToken liquidating the Bitcoin acquired through its Ponzi scheme, which came to around $2.9 billion, according to Chainalysis. In the webinar, Gradwell stated:
“We can also dispel another theory that has been going around, that PlusToken […] selling triggered the price decline. We actually don’t think that’s the case because PlusToken had largely cashed out before early March.”
According to Chainalysis data, PlusToken movements to exchanges decreased severely before the crash, which indicates funds were already cashed out. A noticeable amount of 12,423 Bitcoin, worth $123 million at the time, was moved to a mixer or cold wallet on Feb. 12, followed by a similar amount in early March. It’s possible that the Bitcoin was cashed out immediately to avoid exchanges freezing funds.
PlusToken may still have 61,229 Bitcoin, currently worth around $420 million, according to a report released by OXT Research on March 10. While some Bitcoin has been sold after the crash, low prices seem to discourage those behind PlusToken from selling, if they are still in fact holding such large quantities of Bitcoin. It’s possible that the PlusToken operators may be waiting for the Bitcoin halving to capture a higher price.
According to Chainalysis, volumes prior to and during December 2019 were much higher than those observed in 2020. The accentuated inflows were discussed in another Chainalysis report where it took another stance on the PlusToken and Bitcoin price relation, stating that at the time the sell-offs from PlusToken were keeping Bitcoin prices down.
Although PlusToken has largely cashed out, there is still a chance it will continue to affect Bitcoin. According to Kim Grauer, the head of research at Chainalysis, a large sell-off by PlusToken could bring down the price of Bitcoin in the future, especially if liquidations are executed irresponsibly. She told Cointelegraph:
“We found in the past that large inflows to exchanges, such as those from PlusToken last year, tend to increase the price volatility on exchanges. This problem can potentially be exacerbated by trading bots that pick up on those on-chain movements and execute trades, not to mention the highly leveraged positions on derivatives exchanges that can get liquidated rather quickly. But overall, prices tend to bounce back quickly from those one-off events.”
PlusToken, now known as the biggest cryptocurrency exit scam in history — so far — was a 2019 Ponzi scheme that defrauded investors out of $2.9 billion in cryptocurrency assets by posing as a South Korea-based crypto wallet project that offered depositors interest in crypto, a practice that has become fairly common in decentralized finance applications, centralized banking applications and exchanges offering margin trading.
PlusToken explained that its high interest payments would be generated by exchange profits, mining and referral programs. Shortsighted by the promising gains, over 3 million users registered with PlusToken.The scheme even announced that it expected to grow to 10 million users by the end of 2019, shortly before it exited with depositors’ money.
Related: Crypto Exit Scams — How to Avoid Falling Victim
In China, PlusToken was quickly exposed as a Ponzi scheme when six individuals were arrested by Chinese authorities in June 2019, with reports connecting them to the PlusToken project. Cointelgraph reported on the incident at the time, but it was in August 2019 that the cybersecurity firm CipherTrace released its second quarter Cryptocurrency Anti-Money Laundering Report that confirmed the connection to the PlusToken scam.
Interest-generating products have been gaining evermore popularity in the cryptosphere, including MakerDAO’s decentralized protocol, which according to a report by DappRadar saw peak activity during March, and other centralized options such as BlockFi’s banking app or Binance’s lending services. Although crypto has always been prone to illicit activity and shady ventures, the relatively high interest rates practiced in these services may have helped normalize PlusToken’s profit claims, easing unwary investors.
Similar models have been seen elsewhere. In August 2019, a cryptocurrency wallet project from Nigeria called Satowallet allegedly made off with $1 million in a smaller-scale exit scam. Last year, another Ponzi scheme promising returns from cloud mining also made headlines after pulling off a $200 million exit scam that later resulted in 14 individuals being arrested.
An ever-increasing number of “topical” crypto-schemes have surfaced since the worsening of the coronavirus pandemic, from fake donation campaigns for the World Health Organization and the United States Centers for Disease Control and Prevention to fraudsters impersonating officials from these agencies who can sell information on active infections for a price, paid with Bitcoin of course.
Now more than ever, cryptocurrency holders need to be wary of crypto scams. The U.S. Federal Bureau of Investigations recently issued a press release in which it warned of the potential increase of “cryptocurrency-related fraud schemes” during the COVID-19 pandemic, adding:
“There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies.”
Although tough times create a perfect chaotic setting for scammers to operate in, it’s relieving to know that despite the increased activity and novel coronavirus-related scams, revenue for crypto scammers fell by around 30% in March.
Despite taking on new forms, cryptocurrency scams are almost as old as crypto itself. For example, OneCoin — one of the most prominent names when it comes to cryptocurrency-related scams — was founded in 2014 and it is still making headlines in crypto media. Although OneCoin has been sued, the lead plaintiff for the ongoing $4 billion class-action suit against the project, Donald Berdeaux, has repeatedly failed to meet the court’s monthly status reports, which may lead to the case being dropped.
According to Chainalysis, most of the funds moved by the PlusToken scam were liquidated in two Asian exchanges: Huobi and OKEx. This has raised some concerns about exchanges’ Know Your Customer practices, which do not seem to have been useful when it came to spotting or censoring the transactions from PlusToken.
Although other sources were used, they were small in comparison to the inflows to the aforementioned exchanges. Grauer stated that Chainalysis had “found traces of funds at mining pools, mixers, other scams, and p2p exchanges, but the paths were too small to be interrogated.”
If cryptocurrency schemes are to be stopped, exchanges should ideally act as a final barrier for illicit transactions. Responding to past criticism, Huobi is aiming to improve its security measures by launching Star Atlas, an on-chain monitoring tool that can identify “crimes like fraud, money, laundry and other problematic activities.”
Moreover, Huobi is also looking to partner with data providers like Chainalysis and CryptoCompare to build a more transparent and compliant ecosystem, a measure that will surely be essential for institutionalization and regulatory compliance going forward. Ciara Sun, the vice president of global business at Huobi, told Cointelegraph:
“While we may be able to identify illicit activities once they reach our exchanges and prevent their outflow, we can’t yet prevent illicit transactions that start outside of our platform. However, we believe that collaborative efforts among industry players, including but not limited to information sharing, are the key to success to create a safer friendly ecosystem for the crypto industry to grow.”
While efforts to reduce illicit transactions are being undertaken by exchanges such as Huobi and Paxful, users should always be aware of possible fraud attempts and conduct meaningful diligence into any project they are willing to trust with their coins, as it is unlikely they’ll get them back once lost.
Author: António Madeira
5 Things to Know About Cryptocurrency Exchanges
Most people know cryptocurrency exchanges as platforms where cryptocurrencies can be bought and sold. And although that is completely true, there is a lot more to them than that.
Before you jump in and sign-up or start to trade on a cryptocurrency exchange, there are a few things that you really ought to know:
Out of the thousands of exchange platforms that are out there, only a small percentage actually support fiat currencies. The rest are restricted to cryptocurrency to cryptocurrency trades.
If you intend to purchase tokens using fiat currency, you should check in advance whether or not the exchange supports it – and what type of payment options are available.
Contrary to popular belief, there are actually different types of cryptocurrency exchanges. The most common is definitely centralized exchanges which are controlled by a single entity, or decentralized exchanges that enable the trustless exchange of tokens between two parties.
Aside from that, there are broker exchanges as well as hybrids that are often a combination of centralized and decentralized.
The majority of cryptocurrency exchanges cater to specific locations. In part that is due to the regulations governing cryptocurrencies that differ from one jurisdiction to the next.
If you intend to find a BTC trading platform, you should make sure that it caters to your location and is compliant with the regulations.
If you’re hoping to find an exchange that offers you anonymity, you’re probably going to be out of luck. Most exchanges nowadays are compliant with KYC (Know Your Customer) regulations and require identity verification of some form or other.
To be perfectly honest if an exchange is not KYC-compliant it is a red flag and you’ll want to check very carefully to make sure it is reputable and reliable.
Sufficient liquidity is key when you look at cryptocurrency exchanges. Without it, the speed of your transactions may be compromised and it may even affect the prices as well.
Although exchanges may not disclose their liquidity up front, you can estimate it by looking at their recent trading volume. The higher it is, the faster and smoother your trades should be – and the less likely that the price will be affected.
While you should definitely look at the security measures that are offered by cryptocurrency exchanges, you should also remember that security is a two-way street. In other words, you will want to take steps on your end to protect yourself.
Some of the common security features that you should look for in an exchange include two-factor authentication, fund cold storage, and proof of reserve. However, on top of that, you should take other steps to secure your computer, including using a firewall or VPN, scanning for viruses, and so on.
It should be noted that these are by no means the only things that you should look at when you’re trying to find a cryptocurrency exchange. Instead, there are many other factors that you’ll also want to weigh such as the fee structure, interface, support, and so on.
Think of this list as a quick introduction that lets you know some of the most important aspects of exchanges and what you need to keep an eye out for. If nothing else you should be starting to see just how diverse they really are, and why it is important that you take your time when choosing one.
Rich Snippet Title
5 Things to Know About Cryptocurrency Exchanges
Most people know cryptocurrency exchanges as platforms where cryptocurrencies can be bought and sold. And although that is completely true…
Author: Coinpedia Staff