Wikipedia defines cryptocurrency exchanges in the following way, ” Cryptocurrency exchanges or digital currency exchanges are businesses that allow customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money, or different digital currencies.”
With the extraordinary rise in the value of cryptocurrencies, many exchanges have sprung up all over the world. As with any situation like this, there are some that are better than others. If you do a Google search on, “What are the best cryptocurrency exchanges?” you will get a variety of different opinions.
Review of Poloniex
The criteria for a good exchange are summarised beautifully in the following “
You should consider some parameters to judge and find out the
best Bitcoin/cryptocurrency exchange:
How safe are the website and server?
Transaction fee structure of the exchange of fixed fees, percentage
fees and spread.
Whether exchange provides transparent data of coins transactions, prices,
How many and which currency pairs are available to trade Bitcoin, for example USD, Euros, and other fiat /government-issued currencies, or
Multiple options to buy Bitcoin like PayPal, credit card, etc.
Are customers happy?
Good user ratings.
Is Poloniex safe/ secure?
It is not recommended to store large amounts of coin at any exchange. Exchanges are prime targets for every hacker, and they are often broken into by these criminals. On its website, Poloniex says, “
Liquidity, for an exchange, refers to the ability of the exchange to convert its asset, namely cryptocurrency, to cash, meaning fiat money.
Poloniex vs Coinbase
As there are many exchanges, we will only compare Poloniex and Coinbase. If you wish to compare Poloniex with any other exchange, then there is a vast amount of information available on the Internet.
Coinbase is slightly older than Poloniex, having started in 2012. It is ideal for beginners in cryptocurrency. A trader using Coinbase can both buy and sell his or her coins using fiat currency via credit card, bank transfer, and Paypal; cryptocurrency can also be used. Buying and selling on Poloniex can only be done using cryptocurrency.
Poloniex has a much larger stable of currencies than Coinbase, which only deals in Bitcoin, Bitcoin Cash, Ethereum, Classic Ethereum, and Litecoin. The only downside to this for users of Poloniex is the inability to use fiat money.
Coinbase has an app for mobile devices, which is very helpful in many situations. Poloniex does not have an app and recently warned its clients about an app that was being promoted. This app was probably just a clever scam.
No discussion about exchanges would be complete without consideration of security. Both exchanges have excellent reputations. Coinbase is slightly better, never having been successfully hacked. It was mentioned in (1) that Poloniex was hacked in 2014, but never successfully since then. The warning is given in (1), namely, “it is not recommended to store large amounts of coin at any exchange,” should always be heeded.
Finally fees, Poloniex has lower fees than Coinbase, and for someone trading vast volumes of altcoin, the difference will be significant. We will say more fees later.
If you do not know the meaning of margin trading, then the following definition from Investopedia will help, “Buying on
Poloniex provides you with the facility to margin trade if you wish. The funds borrowed from Poloniex are those of other clients. Margin trading is an advanced activity and carries considerable risk, although it can be very remunerative.
What currencies can I buy, sell and margin trade on Poloniex and using what payment methods?
Poloniex caters for at least 100 cryptocurrencies. It is possible to buy, sell and margin trade on all of these.
All exchanges must have income and to get this they charge fees. In comparison to the fees charged by banks, the fees are much less. In calculating fees, Poloniex decides whether a client is a
A seller can be a maker if they offer to sell a coin at more than anyone has said they will pay. A buyer can be a maker if they offer to buy at a price that is less than anyone will accept. Similarly, a seller can be a taker if they offer to sell a coin at less than someone has said they will pay. A buyer can be a taker if they offer to buy at a price that is more than someone is offering.
The table below shows the schedule of fees Poloniex has; you can see that they are quite small.
Does Poloniex have any transfer limits?
If you are a small trader, it may be that an exchange may have a minimum size of the trade. Some exchanges have a $50(US) minimum limit. Similarly, there may be a maximum limit. Poloniex has no minimum limit but a maximum daily limit equivalent to $25,000 in Bitcoin.
Does Poloniex have identity verification?
It used to be that Poloniex did not require identification for small accounts, however, in late 2017 this changed and now every client has to go through the identification process. An excellent YouTube tutorial on how this is done is found at ICOformula.com entitled, ‘How to set up a Poloniex account.
Poloniex accounts created before late 2017 will be disestablished if the owners do not submit to the verification process. Anyone who suffers such disestablishment will lose any cryptocurrency they have on the Poloniex exchange.
(9) Assuming that I have been verified and have made a trade, how quickly does the transaction take place and my funds become available?
The most optimistic estimates vary between 30 minutes to an hour. There have been complaints of much longer waits. If you join Poloniex, it will be wise to do a check with a small amount before committing a considerable sum
How do you use Poloniex?
Before you decide to use Poloniex, do due diligence! This applies to any exchange and not just Poloniex. If you want to use them now, then you must undergo the verification process described in (8). Once you have completed this you will be directed to a two-factor authentication process then after that, you can start trading. Trading is not a simple process and until you know what you are doing, only experiment with amounts you can afford to lose. This is particularly so if you are considering margin trading.
It is important to remember that you can only trade with cryptocurrency on Poloniex. You need to buy some cryptocurrency such as Bitcoin or Ethereum from an exchange such as Coinbase or Changelly. You should put this into your own wallet such as Jaxx. To do this easily, you must be familiar with how to use wallets and their keys.
You can then deposit coin from there to Poloniex. To do this, Poloniex must verify you; once you are confirmed, then the screen should show this menu after you have logged on.
You do all the depositing and withdrawing using the
A very good tutorial on the process of deposits and withdrawals is given at the YouTube:
Finally, we come to the vital question of customer support.
(11) Customer support at Poloniex
Checking the Internet reveals a wide variety of opinions about this. I think that Poloniex is satisfactory for more advanced users of cryptocurrency but other exchanges such as Bittrex and Coinbase are regarded as far superior for beginners. To their credit, Poloniex has been working hard at this, and the beginning of 2018 saw them actively seeking new support staff.