ShapeShift is a unique exchange platform in many aspects. The services offered by the online trade company became quite popular within the cryptocurrency markets due to many altcoins offered. Thus, it was natural for us to be curious and to investigate ShapeShift.
Stay tuned as we go through exchange’s registration & verification processes, regional coverage, deposit & withdrawal options, fees, exchange rate and security functions. At the end of the article, we propose a set of pros and cons that can be benchmarked against other similar crypto platforms.
About the Platform
ShapeShift was founded in 2013 by Swiss-based investors, Roger Ver and Barry Silbert. Through different funding projects, the company collected over $2 million with the help of different well-known investors, such as Bitfinex. The initial release of ICO was in 2015, gaining funds and establishing operations.
Now, the service includes over 950 cryptocurrency swap pairs. The whole business idea is based on the non-fiat altcoins exchange. Almost all crypto coins would find their place at ShapeShift which is the reason for ShapeShift’s popularity, as shown below.
An interesting fact about ShapeShift is that other exchanges use the platform as well, not just individual traders. If you happen to have an account in Exodus, you will find that swapping your coins around is possible through built-in ShapeShift app, as seen below.
Other than Exodus, the ShapeShift app is also present in Jaxx, Mist and BitGo wallets. Support is available through ticket system and extensive FAQ page. Live chat is not available like in Coinmama, which can be seen as an issue.
Registration and Verification
We can actually rope together both registration and verification together in the case of ShapeShift as they both are nonexistent. If you take a good look at the exchange’s homepage below, you will find that there is no registration button present.
The company does not collect any sort of information about you, except wallet addresses for coins you wish to swap. Unlike in Bitfinex, Coinbase and other platforms, there is no verification procedure at ShapeShift. You do not need to provide even email address or set up an account to trade cryptos.
Moreover, the website does not track your location nor does it hold data about your history. Address codes change in most wallets, meaning that ShapeShift is a completely private way to exchange altcoins.
ShapeShift, due to the lack of registration or location requirements, offers services to traders from all over the world. No matter where you live, you only need to have wallets for altcoins you wish to trade. This puts ShapeShift on upper hand when compared to Coinbase for example, as latter is available in 32 countries only.
Deposit/Withdrawal Methods and Fees
The exchange does not offer any sort of fiat currency trade, deposits or withdrawals. It is strictly a crypto-to-crypto trade platform where only cryptos can be swapped around. You cannot hold them nor can you withdraw them to your wallets. You have to provide two wallets for the coins you wish to exchange. It is a perfect ground for getting rid of less popular coins while getting the ones you want to invest.
Beginners will find this a wonderful feature while experts can switch from one coin to another and invest in other exchanges. Since there is no deposit or withdrawals in either fiat or cryptocurrencies, the only cost you need to pay is network fee. Each of the assets has its own cost structure and is usually only a fraction of the coin’s value.
Trade Fees and Exchange Rate/Spread
Since there are no other expenses apart from network fees, the exchange rate is the main source of income for ShapeShift. This is also the source of complaints from customers since some coins have a large spread between buying and sell prices.
We can say that trade expenses are thus not shown transparently as they are part of another price of cryptocurrencies. In a way, you pay more for a privacy provided for your transactions. Even popular coins, like bitcoin and Ether, have larger spreads than in Bitfinex for example.
It is worthy to mention that ShapeShift’s perimeter was breached on three separate occasions, resulting in 469 BTC, 1900 LTC, and 5800 ETH stolen. Since then, the platform rebuilt its security system and included new safety protocols.
Apart from the transaction protocols, there are no other safety measures left for users to have. To be fair, there is also no need for them, as you do not have a registered account or balances. The hacking incident played out to the harm of the company, not users.
Thus, the platform itself is safer than exchanges with numerous safety features, like Bitfinex. Cybercriminals cannot get hold of your assets and neither can they follow up your address codes in any case. Without a clear trail, your balances are safe with you.
- no verification or registration procedures required, making ShapeShift one the most privacy-friendly exchanges in the industry
- only network fees are applicable
- swapping is instantly carried out
- a large number of altcoins (over 50 of them) creating over 950 available trading pairs
- a very secure place to exchange altcoins you do not need since there is no balance nor trace left when trading at ShapeShift
- wide exchange rate, especially for less popular coins
- some cryptocurrencies might have low liquidity if they are not popular
- there are no fiat currencies to use when trading coins
If you are looking for a place where you can get coins you want while getting rid of unnecessary ones, then ShapeShift is a right place for you. Experts may not find complex services but trading coins around at any time without registering an account is definitely a plus.
Most of the complaints about the system employed by ShapeShift revolves around large exchange rate. The company makes a profit from the spread between sell and buy functions, which can be quite large for unpopular cryptocurrencies. It can be said that, due to the privacy offered, exchange charges premium prices on its services through high rates.