As Bitcoin price has climbed from $1k to $15k this year, I get asked quite a lot – how to actually buy it?
Usually I recommended to open an account in Kraken.com – their user interface is a bit complicated, but it is one of few exchanges that has not been hacked (yet). And to test it out, I opened a new account – sign up was fast and easy. Verified my email and got following email:
Ok, so I need to get verified. No problem. Until I opened the “Get Verified” section:
WTF? I would understand if verification would take slower as usual, but just disabling it? This is ridiculous. Without verified account I cannot do anything – deposits and withdrawals are disabled. So fuck Kraken.com – for existing users half of time their service is down and for new users it is not available at all. Cannot recommend it anymore.
I am not a big fan of Coinbase – because they don’t support Bitcoin Cash, but have mentioned it as a more user-friendly alternative to Kraken. So I created a new account there as well.
Signed up, verified email – so far so good. But when I clicked on “Add a Payment Method” and selected “Bank Account“, got a blank popup that hang up with a loading animation:
So Coinbase are having technical issues as well. Tried to repeat this 5 times and then it finally loaded with a message that I first need to verify my identity.
Ok, at least verification is not disabled – made a photo of my ID card. In “Limits” section there was a message: “We’re verifying your identity. Please wait a couple of minutes.” – few minutes turned into a day, but next day they asked me to verify my identify again. Uploaded the same ID card – and this time it really got accepted within couple of minutes.
What are Coinbase downsides when compared to Kraken.com?
Limited support for crypto currencies – Coinbase allows you to trade only Bitcoin, Ethereum, Litecoin. Kraken has support for 17 currencies, including Bitcoin Cash, Ripple, Dash, Monero.
Higher prices – for some reason coins on Coinbase are 5-7% more expensive when compared to Kraken:
|Bitcoin||€ 12 600,50||€ 13 269,05||+5,3%|
|Ethereum||€ 369,91||€ 391,37||+5,8%|
|Litecoin||€ 123,50||€ 131,61||+6,6%|
Higher fees – did not notice this at first, but Coinbase has crazy high fees: 1.49% per each buy/sell transaction, and 3.99% if you buy from credit card. Kraken charges about 0.25% per transaction, so it is 6 times cheaper. For this reason alone – I strongly advise to avoid Coinbase unless you are ready to pay much more for user friendly interface with very limited functionality.
GDAX is owned by the same company as Coinbase – but it has more advanced features and similar commissions to Kraken: 0.25% for BTC, and 0.3% for LTC and ETH, and it is 3rd largest exchange by volume.
And just like Kraken, it has serious technical issues. Signed up and got an error already during email verification:
And as I was checking out their pricing page, even that one went down:
But couple of attempts later I accepted their terms and was asked to either upload Passport or choose Business account:
Instead of Passport I provided my ID card again. Got another error – that GDAX is under maintenance, but also was provided with estimate – that my verification will take 3-5 minutes and a timer:
After 7 minutes did a refresh, and got another verification screen, so I provided my ID card again.
But GDAX validation is totally broken. I’ve tried to upload passport, ID card 20+ times during a period of 2 weeks and each time after I have done the upload, later I get asked to do it again.
When this is fixed, would recommend them because of low fees, but until then – it is totally useless for new users similar to Kraken.
Created an account in Bittrex a long time ago, but had not done any trades. So on Dec 19th I tried to get through their enhanced verification process – again, needed to upload documents, but this time it worked without any fuckups and just needed for them to process them.
On Dec 28th I got approved, so it took about 10 days. Not fast, but still much better than Kraken & GDAX.
Everyone is a big fan of Revolut and recently they announced a new feature – ability to buy crypto currencies. So I tried to check if it works.
Well, not really – unless I invite friends or become Premium member:
But they have promised to offer option to buy Bitcoin, Ethereum and Litecoin similar to Coinbase. And if users will have ability to withdraw coins to their own wallets – then Revolut might be a good alternative to Coinbase.
Well, there is a big list of them on coinmarketcap.com – but before using any of those, I would recommend to do a bit of research. As I have learned the hard way, even the biggest exchanges get hacked or do some shady shit. Some exchanges from my own experience:
- bitcoin-24.de – largest exchange in Europe, received DDoS attacks, closed down.
- mtgox.com – got hacked/scammed by owners, users lost hundreds of millions.
- btc-e.com – was involved in lot of criminal stuff, closed down by FBI.
But the list of exchanges that have got hacked or closed down is much bigger, Blockchain Graveyard has collected info on 47 incidents.
I got coins, now what?
If you think you will be able to predict price movements of crypto currencies and you want to do lot of trading, then you will need to keep your coins in an exchange (or split among several ones).
If that is not the case, then I suggest to buy the coins and then move them to your own wallet to avoid loosing them if your exchange service has any issues. It also would be reasonable to create a backup of your wallet to a USB memory stick or some other method in case you loose your computer.