The Top Crypto Exchanges In The Market Today
What is the best cryptocurrency for buying digital coins from in the market today? No doubt, this is the single foremost question that every single crypto investor grapples with. The fast-rising number of crypto trading platforms can be confusing. An interesting fact: Since 2009 when Bitcoin was released, over 500 trading platforms have entered the market.
The exchanges provide a meeting point between buyers and sellers so that prices of digital coins are driven by the forces of the market. That said, the exchanges have become an easy target for hackers.
When you take a look at the major losses reported in the crypto industry, chances are that they took place at the exchanges. One of the recent attacks took place at Coincheck in January 2018 where more than $500 million worth of digital coins were lost.
This post is a comprehensive review of the top crypto exchanges in the United States. The guide will help you narrow down the best crypto platforms there are.
What are the Characteristics of a Good Crypto Exchange?
The original idea of cryptocurrencies was to provide a secure and reliable way of carrying out financial transactions. However, the exchanges have turned into magnets for scams and mires of tech dysfunction. So, how can one identify a good exchange? Here are some useful tips:
- Low transaction fee
- High security
- Intuitive user interface
- Responsive customer support
- Advanced trading metrics
It is also advisable to look for an exchange with good history. Make sure to ask key questions such as “Who are the founders of the cryptocurrency exchange?” and “What is the main mission of the platform?”
The following are the top crypto exchanges in the market that you should consider:
Binance is a Chinese-based cryptocurrency exchange that was created in July 2017 by Yi He and Changpeng Zhao who were concerned that trading was becoming overly complex and expensive.
Binance: an Exchange Created to Make Trading Easy
One method that Binance used to address the above issues was the introduction of native tokens referred to as BNB. When a trader pays the transaction fee for using Binance with BNB, he/she gets a discount of 25%.
It is worth noting that though the address of Binance reads Hong Kong, it has shifted the servers to Malta following China’s abrasive policies towards crypto exchanges that were introduced in the third quarter of 2017.
Binance Achievements During its First Year in Operations
In July 2018, Binance celebrated one year of being operational. The platform has turned into a trendsetter with its impressive achievements such as scalability of up to 1.4 million transactions/second. Other achievements recorded in the Binance’s first year included:
- Over 143 listed tokens
- More than 350 trading pairs
- Multi-language support
- More than 900 million airdrops & fork tokens
- A mobile app
How to Trade on the Binance Exchange
Because Binance operates as a centralized exchange, users are required to register for accounts and deposit crypto coins they want to trade with. Here is the process you need to follow to start trading at Binance:
- Register for an account on the Binance website. You can opt for a level one trading account or the advanced account. Level one’s account has a daily withdrawal limit of 2 BTC while the advanced account allows withdrawals up to 100 BTC.
- Enable two-factor authentication. Though the transactions on Binance are encrypted, the two-factor authentication helps to provide an additional layer of security.
- Deposit your tokens into the account and select the preferred trading pair. For example, a person who has deposited Bitcoins can pair the coins with others such as XRP or BNB to form pairs such as BTC/XRP or BTC/BNB.
- Execute a trade depending on the market movements. It is important to closely follow the market dynamics and news touching on selected cryptocurrencies pair to optimize profits.
A Summary of Pros and Cons of Using Binance
Here is a set of the main advantages and disadvantages of using Binance:
- Lists many cryptocurrencies.
- Led by a highly enthusiastic team.
- Provides advanced trading metrics.
- Low transaction fee of 0.1%. Users can lower the fee further by 25% if they pay with BNB.
- The platform is planning to launch its own blockchain.
- It is a crypto-only platform.
- Does not support leverage trading.
- Does not support credit cards or fiat currency.
Coinbase is one of the best US crypto exchange platforms known for its intuitive user interface and top-notch security. The platform was founded in 2012 by Crypto enthusiasts, Fred Ehsram, Brian Armstrong, and Ben Reeves.
The Coinbase Journey
After the launch in 2012, Coinbase grew steadily in the subsequent two years to reach one million users. In 2013, Coinbase became the highest funded Bitcoin startup and the largest exchange in the entire globe. By mid-2018, the number of Coinbase users had reached 12 million.
The exchange has entered into partnerships with top brands such as Dell, Dish Networks, Time Inc, and Overstock to help power Bitcoin-related payments. In 2016, Coinbase rebranded to Global Digital Asset Exchange (GDAX).
In January 2017, Coinbase got a license to trade from the New York State Department of Financial Services (DFS). Later in the same year, the IRS (Internal Revenue Service) ordered Coinbase to report all accounts that held over $20,000 in annual transactions.
Coinbase provided IRS with info such as IDs, dates of birth, addresses, names, and histories of transactions from the year 2015. This move has reignited the debate that the use of centralized exchanges could be a threat to cryptocurrency anonymity.
How to Use Coinbase for Trading Digital Coins
As a centralized cryptocurrency exchange, Coinbase requires users to create accounts in its platform and deposit funds to use for purchasing or trading cryptocurrencies. Here is a demonstration of how to set up and start using a Coinbase account.
- Visit the Coinbase website to sign up for a trading account using your name and email address.
- Select the account type and verify it. Here, you need to establish whether you want a personal or business account. Then, verify the account using a phone number that will also be used for two-factor authentication.
- Set the preferred payment method. At Coinbase, you can opt to fund the account using bank transfers or credit cards. For those who want to use wire transfers, Coinbase sets up one to two small transactions to and from the account for verification. For others who choose credit cards, Coinbase requires a screenshot of the respective card capturing all the numbers.
- Execute your transaction. Whether you wanted to buy Bitcoins, Ethereum, or ERC-20 tokens, simply navigate to the purchase tab and confirm details such as fee and the amount to go to the wallet. Then, execute the transaction.
Coinbase puts a lot of emphasis on the platform and user’s info security. 98% of their customer’s funds are stored offline in cold storage. This implies that even in the event of an attack, only a very small percentage would be affected. Other methods used to keep Coinbase secure include:
- The Coinbase website is run on encrypted SSL (https) protocol that helps protect the integrity and confidentiality of communication between users and the site.
- To deter CSRF attacks, the platform uses SQL injection filters that verify the authenticity of the POST, PUT, and DELETE requests. The injection filters also limit the number of login attempts.
- To prevent the danger of an insider attack, staff working at Coinbase have to pass criminal background checks. The Coinbase system also uses two-step verification, encryption of hard drives, and screen locking.
Coinbase’s Transaction Fee
The transaction fee for using Coinbase is 1.49% for standard buy/sell transactions. However, instant buys with credit cards attract a fee of 3.99%. This implies that Coinbase is more expensive when compared to others such as Binance and KuCoin that charge 0.1%.
A Summary of Coinbase Pros and Cons
This summary demonstrates the main pros and cons of using Coinbase to buy and sell digital coins:
- Supports a wide variety of deposit and withdrawal options.
- It is a secure platform with two-factor authentication and multi-signature options.
- A friendly user interface.
- Users’ deposits are insured.
- It is led by a highly aggressive tech team.
- Only supports a few cryptocurrencies.
- The accounts are monitored by the IRS.
- Wire transfers are very slow. At times they take more than three days.
- The transaction fee is high.
Kraken is a San Francisco-based exchange that markets itself as the ultimate platform for helping traders ‘sail the high seas of success.’ The exchange was created in 2011 by Jesse Powell and launched in 2013.
Marks that Make Kraken One of the Top US Crypto Exchanges
After its launch, Kraken grew rapidly to become the top exchange in the US and Europe for Bitcoin in 2014. The fast growth in the first few years of operation was a demonstration of the trust that users had in its system.
After the infamous attack on Mt. Gox in 2011 where about 850,000 BTC were lost, Kraken was selected to help with the investigation.
How to Use Kraken
As a centralized exchange, Kraken requires users to open and fund their accounts before holding any transaction. Here is the process to follow:
- Visit the Kraken signup page to create a free account and verify it using an email address. This is for a level one/tier-1 trading account. You also opt for a tier-2 account or tier-3 account by adding more information such as a phone number, proof of residence, and a photo of your ID.
- After the account has been created successfully, it is time to fund it. You can do this by visiting the Deposit section to select the preferred method of deposit.
- Then, select the preferred trading pair and execute a trade by navigating to the New Order section of the website to pick the right currency pair.
The following is a video of how to buy Ripple using the Kraken platform:
Kraken Transaction Fee
Transaction fees at Kraken is charged on both the Maker (seller) and Taker (buyer). The highest rates on the platform are 0.16% for the maker and 0.26% for the taker when running transactions of less than 50,000 with any currency (both fiat and cryptocurrencies).
For traders handling higher volumes, the fee goes down until it hits 0% for the maker and 0.10% for the taker when dealing with volumes of more than 10,000,000.
To make a deposit using a wire transfer, a flat charge of $5 is levied on US citizens. However, this fee jumps up to 10 GBP for UK residents and 10 Euros for other EU citizens.
To guarantee users of optimal security, Kraken has put in place advanced measures to keep the system free from attacks. The efforts have made the exchange run effectively without a report of a successful hacking attack.
How has Kraken managed to remain this secure as others such as Poloniex suffer attacks? Here are the features and strategies employed at the exchange:
- Kraken uses cold storage wallets that are air-gapped. This means that they are not connected to the internet and are held in secure locations.
- To protect users from possible liquidity shortfalls, Kraken keeps extensive reserves in conventional banks.
- Kraken uses two-factor authentication on all accounts.
- The exchange also uses standard SSL certificates that help to protect users from man-in-the-middle and phishing attacks.
- The exchange also allows users to enable account encryption as an additional layer of security.
Summary of Kraken Pros and Cons
The following pros and cons outline the reasons why Kraken is one of the best US cryptocurrency exchange platforms:
- Provides high liquidity.
- It is a secure platform with no cases of successful hacking.
- Easy to use.
- Supports many cryptocurrencies.
- Supports both fiat and cryptocurrencies.
- The exchange has a very high transaction fee.
- Reports of delays during peak times.
- The exchange is not decentralized.
The Final Take
Picking a good cryptocurrency exchange is an important step in defining how securely you can trade digital assets. If looking forward to picking the best cryptocurrency exchange, carefully review your personal trading goals and establish the efficiency of the platform’s structure to serve them.
Note that though the transaction fee is critical in selecting the right platform, it cannot be used solely as the answer to the question “What is the best cryptocurrency exchange?” It is important to comprehensively interrogate the platforms of interest by starting with their history, their safety, and other key features.
Coinbase, Kraken, and Binance are the top recommendations today because they are not just popular crypto exchanges but they are also easy to use, supports more than one cryptocurrency, and is secure.