When getting into buying and trading cryptocurrencies it is essential to have a crypto currency exchange that meets your investment needs.
Two of the most common and popular cryptocurrency exchanges used today are Kraken and Poloniex. In this article we will dive deeper into both of these exchanges and will help you to determine which exchange is right for you. Continue reading for our full Kraken vs Poloniex breakdown.
Let’s get into it!
What is Kraken?
Kraken, founded in 2011 by Jesse Powell, is one of the oldest crypto currency exchange platforms available today. It was founded in San Francisco and still operates out of its headquarters there today. Kraken is a crypto currency spot exchange that also offers futures contracts and margin trading.
Kraken is one of the oldest and most well-known crypto exchanges and was the first bitcoin exchange to have their trading price and trading volume displayed in the Bloomberg terminal. As a result, Kraken is one of the most trusted and reputable crypto currency exchanges currently operating. They have also managed to retain ownership of their exchange since its inception, allowing them to have a high level of longevity and consistency.
Pros of Kraken include:
- Supports fiat deposits and withdrawals
- Supports over twenty crypto currencies and five fiat currencies
- Two factor authentication, global lock settings, and a master key
- Multiple methods of deposits and withdrawals including bank transfers, bank wires, and crypto currencies
Cons of Kraken include:
- Poor customer service
- Difficult to use user interface, especially if you are a beginner
What is Poloniex?
Poloniex, founded in 2014 by Tristan D’Agosta, is a crypto-to-crypto exchange platform. It operates out of its headquarters in Wilmington, Delaware, which is one of the most heavily regulated states in the United States. Poloniex focuses mainly on the US market but it has a large availability of altcoins (other types of crypto currency) that can be traded in return for bitcoin.
Poloniex was hacked in 2014 and again in 2020 which has reduced its trust and credibility with customers. As a relatively new cryptocurrency exchange platform, Poloniex have experienced various challenges and have had to work through many issues. Despite this, they are still one of the most popular cryptocurrency exchanges on the crypto market and provide a valuable and necessary service.
Pros of Poloniex include:
- Low trading fees and no deposit/withdrawal fees
- Two factor authentication
- Has a large number of crypto currencies available to trade
- Good user interface
Cons of Poloniex include:
- Only crypto to crypto exchange
- No fiat deposits or withdrawals
Head-to-head comparison: Kraken vs Poloniex
In this section we will look specifically at the different features and characteristics of each exchange and will make a determination as to which one is better.
In terms of the number of supported currencies that each exchange possesses, Poloniex has the advantage due to the large number of currencies that can be traded on their platform. They do not, however, trade with fiat currencies and trade exclusively between different crypto currencies. This means that you are not able to deposit fiat currency (such as the US dollar) into the exchange. You can fund your account with any of the coins available on the exchange, however, and there are a lot of them to choose from (up to one hundred) including the more mainstream options of Bitcoin, Ethereum, Monero, and Tether.
Kraken, while having a lower number of crypto currencies available, they do support the trading of fiat currencies on their exchange platform. This means that you have more variety and versatility in terms of the currencies that you can deposit and withdraw, as well as more variety in terms of how you interact with the exchange platform.
While Kraken is more versatile, in terms of sheer number of supported currencies, Poloniex has the edge. If you are only interested in crypto currencies, then Poloniex may be the better option for you. If, however, you would like to trade with fiat currencies then it may make more sense to go with Kraken.
Poloniex was hacked in March of 2014 after their platform was launched and again in December of 2020. Since the first hack, they increased their security, requiring a lot more information from their users when setting up their accounts and asking more in-depth questions. Poloniex uses tried and tested security measures such as separating company and customer funds, two-factor authentication, and storing their customers’ funds in separate hot and cold wallets. Hot wallets refer to funds actively stored online, while cold wallets refer to stored offline where its less accessible but is in a safe and secure location. The majority of a customers’ funds will be stored in a cold wallet while a small amount will be stored in a hot wallet.
Kraken was designed to be the most secure crypto currency exchange on the market and, as a result, has never been hacked or compromised. One of Kraken’s main selling points is their high level of security and with good reason. Jesse Powell, the founder of Kraken, prioritised quality security levels when setting up his exchange platform and the result is a highly secure trading platform. Kraken, in addition to two-factor authentication, also employs a Kraken “Master Key” which represents another passcode used for restricted account actions, as well as a Global Settings Lock which blocks IP addresses that are not associated with a customer’s account.
Kraken also stores customers’ funds in separate wallets as well as keeping company and customer funds separate. Because of this, in terms of overall security, Kraken is the more secure option vs Poloniex. Regardless of which exchange platform you choose to go with, however, the safest option when it comes to your crypto currency is to keep them in a hardware wallet. Hardware wallets are the safest way of storing your crypto as it is a physical storage device and allows you to store your crypto offline.
Both Kraken and Poloniex are relatively inexpensive and are good bang for your buck exchange platforms depending on what you are looking for. They both employ a fee structure that is common across most crypto currency exchanges which is the volume-based maker-taker fee schedule. In this system, makers (the people that place orders) get different transaction rebates than the takers (the people that fill the orders). This method of fee payment evaluates a users’ activity over a 30-day period and applies a fee per trade.
Of the two Kraken is slightly more expensive with a maximum payable fee of around 0.36%. On the other hand, on Poloniex, the maximum that a user can be charged is 0.25%. This makes it one of the most inexpensive crypto exchanges on the market. Additionally, Kraken charges its users a fee per withdrawal and deposit when using fiat currencies (crypto currency deposits are free). Poloniex does not charge their customers for withdrawals or deposits making them even cheaper than Kraken.
Overall, when it comes to fees, Poloniex is definitely the cheaper option when it comes to these two crypto exchange platforms and, if your budget is lower or cheaper prices are important to you, then it may be a better option to go with Poloniex over Kraken.
Ease of use
When it comes to user interface, neither Kraken or Poloniex are particularly user friendly or easy to use. This is especially true if you are a beginner. Kraken’s user interface is very buggy and requires prior knowledge of crypto lingo and is more suited to more experienced crypto traders. Poloniex, on the other hand, is less buggy and, since it only trades in crypto currency exclusively, there is less crypto jargon and lingo to learn.
When it comes to the appearance of the two exchange platforms, neither of them is particularly appealing. Poloniex’s screen is a bit crowded and can feel cluttered. They do place all of the relevant information and charts into an easy to find place, however, which is useful. Kraken uses an interface where you can select the level at which you would like to pace order (simple, intermediate, or advanced) which can be useful but, due to the bugs, the platform as a whole can be difficult to use.
Of the two, Poloniex is definitely more user friendly and easier to use. Both platforms have many different security protocols that can make setting up your account cumbersome and a lengthy process. Despite this, because it is less buggy and has less jargon and lingo, Poloniex is the more user-friendly exchange platform vs Kraken.
Customer support is one of the most important aspects of any customer facing industry and this is no different for the crypto currency world. Unfortunately, neither Kraken nor Poloniex have good track records when it comes to their customer service or the way they interact with their customers.
Poloniex especially is known for their lacklustre and underwhelming customer service. Service tickets take an exceptionally long amount of time to be resolved, and the customer service resources available for customers to use is incredibly limited. This, among other things, has contributed to the diminishing levels of trust that customers have with Poloniex.
Kraken also has a number of customer service issues, such as users running into issues when trying to verify their accounts and are also known for not having the greatest customer service. In an attempt to rectify this, Kraken have implemented a 27/7 live chat service on their website. This allows users to ask questions and receive answers to any of their problems regardless of the time or their location.
Overall, in terms of customer service, Kraken is definitely the better option in this Kraken vs Poloniex comparison. While not being great at customer service themselves, they are better than Poloniex and are trying to make adjustments to improve and provide a better user experience for their customers.
Both Kraken and Poloniex have mobile apps that are available on both iOS and Android, on the app store and google play store, respectively. This means that users are able to buy, sell, deposit, and withdraw straight from their phone and on the move. They both also have websites that are responsive and are able to be used on mobile. Neither of these mobile apps have distinguished themselves from each other, however, so there isn’t a clear favourite in this category.
Both Kraken and Poloniex are excellent crypto currency exchange platforms. Of the two, however, Kraken represents the better and more reliable option. This is due to their longevity and large amount of trust in the crypto market, high level of security and customer protection, and a relatively inexpensive fee structure. Poloniex is, however, an excellent exchange platform and may be the better option for you depending on your particular investment goals and/or preferences.
You should use Kraken if:
- You value a high level of security as Kraken has never been hacked or compromised
- You want to trade with fiat currencies (such as the US dollar) in addition to crypto currencies
- And you want to trade with a trusted and well-known exchange platform
You should use Poloniex if:
- You want to have access to a large amount of crypto currency options
- You are not interested in trading with fiat currencies and are comfortable with using only crypto to crypto exchanges
- And if you are on a budget or value a platform with lower fees
Frequently asked question
- Which of these measures is the most important to consider? – When considering which platform to use the most important measures you should focus on first are the supported currencies so that you can identify if your trading pairs are available, the fees that come with using the particular trading platform, and the level of security available so that you can ensure that your digital currency is safe and secure.
- Which crypto currency exchange is the best for beginners? – For first time traders, a smooth and easy to use trading platform is essential in order to be successful. Not all crypto exchanges are straightforward or easy friendly. That being said, one of the most popular and easy to use platforms is Coinbase pro. Many users report that it is one of the simplest and easiest to use exchanges on the market. Between Kraken and Poloniex, Poloniex is definitely the more user friendly of the two.
- How do I choose the best cryptocurrency exchange for me? – When choosing which crypto exchange to use it is extremely important to first evaluate what your crypto currency knowledge and goals are. Beginners will have less knowledge and different goals compared to more advance and experienced users. Knowing your goals and what you want to accomplish will determine which crypto exchange you ultimately use.