Kraken and Poloniex are two popular exchanges in the cryptocurrency industry. However, both of these exchanges have different strengths. For example, if you want to trade in alternative coins, then Poloniex might be your best bet, but as a beginner in crypto trading, Kraken could be preferable. Everyone has different requirements from an exchange and in this review, we will compare Kraken vs Poloniex to help you find the best one for you.
Types of Cryptocurrency Exchanges
There are three main types of cryptocurrency exchanges, traditional, brokers, and peer to peer. Brokers make their money through setting prices for cryptocurrencies and profiting the difference, where peer to peer list sellers for currencies and connect them with buyers. Both Kraken and Poloniex however, are a traditional exchange, acting as the middle man between sellers and buyers and charge fees on every transaction.
Being a more experienced crypto trader is beneficial if you’re working with this type of exchange, but their fees are lower than brokers and there is a little more structure than peer to peer. It will definitely pay to familiarize yourself with the industry and average coin price and fees before diving headfirst into a traditional exchange.
So now that you know about the kinds of crypto exchanges and the experience level required, let’s jump into the comparison. First, we’ll take a look at Poloniex, and then Kraken.
Before we get into the details, let’s take a look at how the platform made its beginnings. Founded in 2014, the company is owned and operated in the US in Delaware. The platform supports many altcoins, making it a favorite for investors looking for alternative investments to the more popular Bitcoins and of the world.
The platform doesn’t only offer traditional trudging though, it also provides services such as lending and margin trading for the more experienced investors.
Advantages of Poloniex
Poloniex is a favorite of altcoin traders and that is for one reason: the huge range of coins available for trading on the platform. But they also list the household names on their website such as Ethereum, Monero, and Bitcoin.
It is also very beginner-friendly, despite being a traditional exchange, as the user interface is very straightforward and easy to learn. In comparison to Kraken, Poloniex is the more beginner-friendly.
Another big pro for the platform, and especially the less-experienced traders, is the fact that the platform is owned and operated in the US. This means they are held to all the US regulations and care about keeping the customer’s funds safe since they will be liable in the event of a hack.
Poloniex does not require its users to identify themselves as some other exchange platforms. This can be a long and annoying task that can take weeks for verification. It also means complete anonymity for traders who will be moving less than $2000 in crypto per day.
It comes at a small price however, as the only reason its possible is the fact that they don’t support any Fiat currencies.
One of the most advantageous elements of the Poloniex platform is that they have very decent fees. Being very transparent about their prices is also a bonus. The maximum amount you will ever pay in fees is .25% but will be lowered the higher amount the transaction is, and the average is between 0 and 0.20%.
Numbers change regularly though so its best to head over to their website to check out their most updated fees.
Verification and Security
If you want to trade in higher volumes or want a verified account with Poloniex, the process is pretty straightforward. You’ll need to provide information like a permanent address, a picture of photo ID such as a passport, and a phone number.
Once you reach the second level of verification, this will allow you to trade in volumes up to $25,000 per day. The website requires you to use two-factor authentication to use your account for an added layer of security.
Major Disadvantages of Poloniex
Now that you know what the advantages of the exchange are, it’s important to also look a the disadvantages to make the most informed decisions. In recent times, the community has been turning against the platform and reporting issues with withdrawals, customer support, and random changes to their terms of service.
Customer support: Although the issue of bad customer support is pretty prevalent in the crypto industry as a whole, some are better than others. Poloniex has faced accusations of frozen accounts and funds, with replies from their customer support and live chat taking months or weeks to arrive. Some even claim that once they received these replies they still had to wait months on an end before the issues were resolved.
Withdrawal problems: With the verification process being supposedly simple, many users have reported having a difficult time withdrawing more than the 1 tier limit of $2000, even if their accounts are fully verified.
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Terms of service changes: Users have been unhappy with the recent changes to the terms of service on the site, reporting changes such as not allowing certain areas of the United States to use the platform.
The platform has a decent security protocol at the time of this post, however, in the earlier days of the site, they did experience a pretty major hack back in 2014, where 12.4% of all the companies’ bitcoin supply was stolen.
However, the company was able to sufficiently pay back the stolen funds, and are arguably stronger nowadays because of the hack.
Lastly, Fiat currencies are not supported by the platform at all. This means that any user wanting to join will need to have some form of crypto before trading with Poloniex. This is mainly disadvantageous to beginners.
Kraken is one of the largest and longest-running crypto exchanges. The platform was founded by Jesse Powell in California in 2011. By observing one of the biggest exchanges back then, Powell noticed there was a problem with the security of the legitimacy and security of exchanges, and wanted to resolve this issue.
With major players like Mt Gox experiencing multiple major hacks, Powell was determined to change the game.
Advantages of Kraken
One of the major advantages, and the discerning feature from Poloniex, is that you can trade fiat currencies on the exchange. The support Euro, USD, British Pounds, and more. There are fewer altcoin options available in comparison to Poloniex however.
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There are currently 56 trading pairs and 18 cryptocurrencies to trade with including major players like Bitcoin and Ethereum, as well as a limited amount of altcoins.
The company is regarded as very safe in terms of security. The company learned a lot from the mt Gox hacks and have never been hacked themselves. They even took a break in 2017, acknowledging their issues and relaunched after resolving them.
They, like Poloniex, have a two-factor authentication system, giving them two layers of personal security for their users.
The maximum fees are slightly higher than their competitors, though only by 0.01%. The most you’ll pay in fees are 0.26%, but the lowers with higher volumes. We always advise you to check out the official website to see the most updated info on fees, since this can change very regularly.
Verification and Security
If you want to sign up for Kraken, you’ll have to verify your account and provide varying levels of information for more privileges. There are three tiers of account verification: Starter, intermediate, and pro.
Both Pro and Intermediate accounts will take 1 to 5 business days to verify, where the starter could take as little as a few minutes. The more verification you provide, the higher volumes of withdrawals and trades you’ll be able to complete.
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Kraken has implemented two-factor authentication, which is almost an industry standard at this point. Nonetheless, this provides extra security. If you’re under 18, bad luck. Kraken requires all users to be over 18 to participate on the platform.
Cryptocurrency exchanges are not like banks, and neither the user nor the companies want them to be. This brings an inherent challenge with customer support and regulation. The attitude of most exchanges is that their users should be able to problem-solve themselves.
It is reflected in the industry as most crypto-related services have pretty terrible customer support. That being said Kraken does better than most, as well as providing an in-depth FAQ and guide on their website.
Since the site is hyper-aware of security, and haven’t experienced a hack to date. This comes with a downside. Many users have reported a very sensitive anti-fraud protocol, and many have had their account permanently terminated with no warning, or frozen along with funds.
This in combination with customer support that isn’t the best is a recipe for disaster. In comparison to other sites with poorer security reviews, however, this is a relatively small issue. Depending on of course, whether you are affected by this problem.
In comparison to Poloniex, Kraken has a relatively small selection of altcoins available, which is a major disadvantage for anyone wishing to trade in these less popular coins and perhaps get lucky on a riskier investment. The platform does not support lending like Poloniex does either.
When comparing Kraken vs Poloniex you can find many pros and cons for each. If you are looking for a more reputable and possibly safer exchange, where you can deposit in fiat currencies, then Kraken is for you. If you’re a more experienced trader who is looking to invest in alternative cryptocurrency options, then Poloniex might be for you. Which did you pick, and why? Let us know.