Trading cryptocurrencies are becoming easier than ever, with growing number of platforms that offer unique services to their clients. Together with bitcoin, a number of altcoins exist in the industry. The investors buy and sell them on a daily basis and numbers of these digital currencies increase on daily basis.
If you want a different approach to coin trade, then Poloniex is an exchange that you should not bypass. The exchange offers margin-trading services with a number of cryptocurrencies, using only digital money as a method of trade.
This guide on Poloniex provides an in-depth analysis of the platform in terms of trade fees, available cryptocurrencies as well as the security functions. We also compare the broker with other popular exchanges, to provide a clear picture of how good the platform is.
A lot of controversy surrounds the ownership of the web platform, as owners are yet to reveal themselves to the public. Add that inexistence of the physical office and you will get the picture why so many people distrust the company.
In addition to the exchange services, Poloniex offers margin trading and lending markets where you can spread your coins and earn more in the process. Lending is especially interesting, like many other exchanges, like Coinbase or Kraken, do not offer. You provide coins to other peers and they pay you daily interest rate.
The exchange is the top source of Ethereum in the market, with almost 4.000 ETH traded on daily basis.
Account Creation and Verification
Creating an account at Poloniex looks like this: you go to their website, provide a username, email, and password. They send you verification link that you click. You will be directed to your dashboard and can start trading cryptocurrencies. Simple, isn’t it?
As for the verification, much like Coinbase, you have to verify your account before you can even start trading coins. You need to have a webcam ready since the platform would take a picture of you holding the document.
Currently, there are over 70 cryptocurrencies actively traded on the platform. The number of coins that you can use to make profit changes as well, depending on how well they do in the market. Just couples of days ago, SJCX, NOTE, and NAUT have been delisted from the platform. If you had balance in those, the money would be still available for withdrawal.
The exchange likes to introduce new and trendy currencies in. Nevertheless, we would caution you to take great care when you choose these new coins.
The only currencies that exist in the Poloniex platform are digital ones. The exchange does not accept fiat deposits or withdrawals like Coinbase, Bitfinex, and others. It specializes in crypto-to-crypto trade only and even lending interests are paid in coins.
Fees and Exchange Rates
You pay taker and maker fees depending on the type of order you make. These costs change from day to day, depending on the market trends and volume traded. The taker fees can range from 0.05% to 0.05% while maker expenses range from 0% to 0.15%. For lending, you pay 15% of the interest rate.
Withdrawal fees, on the other hand, do not depend on the volume. These expenses are constant, fixed in their value since you pay volume of the online money you wish to withdraw.
Being the largest Ethereum exchange and a big player in bitcoin market, liquidity for these coins is quite high. As of other cryptocurrencies, the situation is not the same. Many currencies get delisted on daily basis, putting a large question mark on anything that is not as popular as BTC and ETH.
Founded in 2014 by an unknown entrepreneur (or group of them), the platform expanded its business by introducing coins into its market. Poloniex registered its business with Financial Crimes Enforcement Network (FinCEN) as a money service business (MSB) in 2016.
In 2014, the website was hacked by an unknown group, resulting in 12% bitcoin volumes stolen from the user. The overall value of the loss estimates to be $600.000, most of which remains unpaid.
In 2017, the company introduced Android and iOS apps for traders to use. The files are downloadable on the phone and are completely free.
Due to the hacking incidents, security is the biggest issue Poloniex has at the moment. All you have a protection is two-factor authentication (2FA). Other exchanges like Kraken and Bitstamp offer email encryption, password manager, and API message tools, all of which Poloniex ignores.
Customer support is taking many hits lately, as the response rate is quite slow or even nonexistent in many cases. This does make an issue as hacking incidents did happen already and many traders are yet to receive any sort of answer from owners.
Pros and Cons
⬤ different markets to play in (exchange, margin trading and lending)
⬤ over 70 cryptocurrencies available for trade
⬤ instant transactions, deposits, and withdrawals
⬤ largest Ethereum market in the world
⬤ services are globally accessible
⬤ owners are not known by the public
⬤ fiat deposits are not available
⬤ low trade fees for all currency pairs
⬤ customer support has a bad reputation
⬤ physical office not visible
⬤ hackers have taken a large volume of coins successfully from Poloniex users
⬤ liquidity for many coins is questionable as they get delisted on a daily basis
Poloniex has some neat features to be sure. Its bitcoin and Ethereum market is large and you can find many new and trendy currencies within your reach at the platform. The security issues, as well as lack of fiat currencies, are a problem that needs careful consideration from your side.
Hackers, unknown owners, and liquidity for many coins are some of the factors you have to take into account before you trade at the platform. We would recommend you not to invest large volume of coins since their safety is not guaranteed.