There are hundreds of different cryptocurrencies and almost as many different places to buy them. These places are called exchanges. Selling and buying cryptocurrencies on exchanges is becoming a big business.
One of the biggest crypto exchanges is called Kraken. In this Kraken exchange review, I’m going to tell you everything you need to know about the exchange. I’m even going to tell you some stuff you don’t need to know, just for fun!
Shall we begin? First, this Kraken review will have a look at how Kraken got started…
Table of Contents
- 1 Kraken Review: The Kraken Story
- 2 Kraken Review: What is Kraken?
- 3 How to Start Trading on Kraken
- 4 Kraken Withdrawal Fees
- 5 Who is Kraken for?
- 6 And finally…
Kraken Review: The Kraken Story
Once upon a time in San Francisco, California, there was a young man named Jesse Powell. Jesse was a big fan of all things crypto.
In 2011, Jesse visited the offices of Mt. Gox. Mt. Gox was the world’s biggest crypto exchange. During his visit, Jesse was shocked by what he saw. Mt. Gox had been hacked and Jesse could see why. It was poorly run and in danger of losing its customers’ money.
Jesse decided to build an exchange that was safer and better organized. He called it Kraken.
By 2014, Kraken was one of the most respected exchanges in the business. In the same year, Mt. Gox has hacked again, lost $460 million of its customers’ money and went bankrupt.
Jesse Powell understood that getting customers to trust cryptocurrencies – and their exchanges – was very important. Kraken formed links with banks in Germany and Japan. It was also the first crypto exchange to be listed on the Bloomberg Terminal (a tool used by bankers around the world).
Kraken became a platform that customers could trust!
In 2017, the exchange had some problems from inside and out. It closed for updates in January 2018 for one week. Fans have praised the platform for taking the problems seriously. Others think that problems will continue for Kraken.
The world of crypto can be unpredictable, so it’s hard to tell what will happen to Kraken in the future.
Now, let’s look at what kind of platform Kraken is in more detail.
Kraken Review: What is Kraken?
Kraken is a cryptocurrency exchange, but you already knew that, didn’t you? It allows users to trade with fiat currencies as well as for cryptocurrencies.
Note: A fiat currency is any currency that is supported by a government. They are the legal currencies of countries. Examples of fiat currencies are the US Dollar, the British Pound, and the Chinese Yuan.
Kraken allows users to trade in these fiat currencies:
- US Dollars (USD)
- Japanese Yen (JPY)
- Canadian Dollars (CAD)
- British Pounds (GBP)
- Euros (EUR)
The amount that is spent in each of these currencies is called their trading volume. Kraken has the largest Euro trading volume of any other exchange.
Note: Trading pairs are currencies put into pairs and given a relative value. It’s a bit like the Bureau de Change at the airport where the pairs look like this; 1 USD = 106 JPY. A trading pair on Kraken will look like this; 1 BTC (Bitcoin) = 6770 EUR (Euro)
The cryptocurrencies that you can trade with on Kraken are;
Bitcoin Cash (BCH)
Ethereum Classic (ETC) Ethereum (ETH)
Stellar Lumens (XLM) Monero (XMR)
The more popular a cryptocurrency is, the more trading pairs it will have. For example, Bitcoin and Ethereum are two of the most popular cryptocurrencies. There are 18 Kraken Bitcoin trading pairs and 7 Kraken Ethereum trading pairs.
So, you know how much trading is done on Kraken, let’s have a look at the numbers for today’s date (March 19th, 2018):
Next, this Kraken review will look at the pros and cons of Kraken.
Good Things About Kraken
Fiat currency trading
You can trade with five different fiat currencies on Kraken. This means that you don’t need to visit other exchanges before you start trading. Exchanges like Bittrex only allow trading with cryptocurrencies.
So, is Kraken safe? Jesse Powell and the Kraken team learned a lot from the Mt. Gox hacks. Kraken has never been hacked. It keeps most of its currency offline. It also offers users two-factor authentication for their accounts.
Note: On Kraken, two-factor authentication is where a user’s account has two kinds of a password. The first password is set up by the user and the second is created by an App like Google Authenticator or Yubikey.
Kraken fees are some of the lowest on the market. Trading fees are between 0% and 0.26%. What you are charged per trade depends on whether you are buying or selling. Buyers usually pay 0.16% and sellers usually pay 0.26% on each trade.
Kraken fees also depend on which kind of account you have. Confused? Don’t worry! I’m going to tell you all about the fees and account types very soon.
Kraken offers a good choice of cryptocurrency to trade with. Some exchanges only offer the most popular coins. For example, Coinbase only offers four different coins — Bitcoin, Ether, Litecoin and Bitcoin Cash.
Crypto experts like Kraken. Kraken has worked hard to gain global respect. It was one of the first exchanges to prove that it was keeping all its customers’ money safe. It did this using a proof-of-reserves audit.
Note: A proof-of-reserves audit is a test that a bank or exchange can take to show its customers that all their money is where it should be.
Kraken’s website has a lot of helpful information on it. Newbies to the site can go to HELP and then SUPPORT to get lots of useful tips. Other platforms, like Bittrex, don’t have this.
No Kraken review would only look at the good things it does, you need to know the bad stuff too. So here it is!
Bad Things About Kraken
Kraken does have an App for trading on your mobile phone but it’s not very good. Users often complain about how buggy the exchange is on its mobile platform.
Note: ‘Buggy’ is a tech nerd word for coding errors that make a program hard to use.
In 2017, Kraken had a few problems. The exchange couldn’t cope with the number of users that were signing up. It also had to deal with several cyber attacks.
These problems meant that Kraken had to close for about a week in January 2018!
Kraken bosses have said sorry for closing. This could be a good thing though. It means that Kraken took the time to make its platform better and safer for its users.
Kraken is not a very simple exchange to use. It offers many different services and styles of trading. This is great if you’re an expert trader. It’s not so good if you’re a newbie. It can be very confusing! Newbies might find a simpler exchange like Coinbase easier to use.
A lot of exchanges have this problem. Sometimes, when users have an issue they can’t get the help they need. Kraken is trying to improve in this area. However, they think it is up to the users to help themselves.
Quick Tip: It’s important to remember that crypto exchanges aren’t banks. They don’t want to be a bank! There isn’t a telephone number you can call or a building you can go to if you have a problem. You’re on your own!
What have you learned from this Kraken review, so far? You know what Kraken is, you know what’s good about it and you know what’s bad about it.
Do you think you’re ready to give Kraken a try? Before you go, this Kraken review will give a short guide to getting started.
How to Start Trading on Kraken
- Get registered– Go to the Kraken homepage and click on SIGN UP. Create a username and password. Do not use PASSWORD1234 as your password! You’re better than that! Enter your email address. Click on SIGN UP.
You’ll receive an email from Kraken with an activation code in it. Enter the code, your username, and your password. Click ACTIVATE ACCOUNT.
You now have a registered Kraken account!
- Get verified– Kraken has five tiers (or levels) of verification (0-4). Verification means that you need to prove that you are who you say you are. The proof you need is different kinds of personal information. The first three levels don’t need much proof but the last two need quite a lot. Tier 0 lets you look around and that’s it. To trade, you need at least Tier 1 verification. This Kraken review will cover how to get verified to Tier 1 and 2. On your account screen click on GET VERIFIED. To get Tier 1 verification, you’ll need to enter your name, date of birth, country, and telephone number.
Click on GET VERIFIED and that’s it!
As a Tier 1 user you will only be able to deposit (put in) or withdraw (take out) with cryptocurrencies. There is also a 2,500 USD limit on how much cryptocurrency you can withdraw each day. Tier 1 is not a lot of fun! I recommend getting verified to at least Tier 2.To do this, click on GET TIER 2 VERIFIED. You’ll need to give proof of address. You’ll need to give this information;
Now, click on GET VERIFIED.
That’s where most users will stop the verification process. Tier 2 allows you to deposit and withdraw with fiat currencies. Deposits and withdrawals in fiat currency are limited to 2,000 USD each day. Cryptocurrency withdrawals are limited to 5,000 USD each day. There is no limit on cryptocurrency deposits. Tier 1 and 2 verification only takes minutes. Tier 3 and 4 verification can take several days. Tiers 3 and 4 have higher limits on deposits and withdrawals. If you live in the US, Canada, Germany or Japan then you will need Tier 3 verification to deposit and withdraw fiat currencies. For this, you will need a Government issued ID and more proof-of-address, like a gas bill.Tier 4 is used by companies and high-value traders. That means rich people and if that’s you, congratulations! Can I borrow some Bitcoins?Before you make your first trade, be safe! Set up two-factor authentication.
- Get two-factor authentication– On your account screen go to SECURITY and click on TWO-FACTOR AUTHENTICATION and then SETUP. As I said earlier, you can create your second password with either Google Authenticator or Yubikey. I strongly recommend using two-factor authentication on any exchange that offers it. Okay, that’s all the boring stuff done, let’s get trading!
- Get trading– On your account screen go to FUNDING and make a deposit. You can fund your account by making a fiat currency bank transfer. Sometimes fees will be charged depending on which fiat currency you’re using and where you live. For example, deposits in Euros are free if you are in the EEA. If you deposit USD in the USA then it will cost you 5 USD. Now all you have to do is choose which cryptocurrencies you want to start trading with. Click on the TRADE tab and then NEW ORDER. There are three options for trading; SIMPLE, IMMEDIATE and ADVANCED. As a newbie, always select SIMPLE. Kraken offers all kinds of different trading and it can get very complex. When you’ve been using the platform for a while you can explore more options. For now, keep it SIMPLE! Now choose the currency you want to buy and what currency you’re going to pay with. You can buy currencies using a limit or market order. Market orders are quicker and more simple than limit orders. Note: A limit order is when you buy a currency for a set price. A market order is when you buy currency at the best current price available.
Now simply click the green BUY WITH button and that’s it! You’re a crypto trader, well done!
A Quick Note on Storage
It is important to use exchanges for trading only. Do not use exchanges to store cryptocurrency for long periods of time. Storing crypto online or in hot storage isn’t a good idea. Keep most of your crypto offline or in cold storage.
To do this, you need at least one hardware wallet. Hardware wallets are like super-secure USB memory sticks. They contain all the codes you need to access your cryptocurrency. Kraken work very hard to protect your money when you’re on their platform but remember, your safety is up to you!
When you make a ton of money trading crypto on Kraken you might want to withdraw some as fiat currency. To do this you will need to pay Kraken fees.
Kraken Withdrawal Fees
Kraken withdrawal fees vary a lot depending on where you are in the world. For example, if you want to withdraw USD and you have an American bank account, it will cost you 5 USD. Not bad, right? If you don’t have an American bank account, it will cost you 60 USD. Not good, right?
You’ve now learned quite a lot about Kraken, but is it the exchange for you? This Kraken review is now going to help you answer that question.
Who is Kraken for?
Another Kraken review might tell you that Kraken isn’t for beginners. This is sort of true. Kraken is a big platform with lots of confusing features. Even expert traders can find it hard to use.
However, I would recommend Kraken for beginners. Think of learning to trade on Kraken as being like learning to drive a car. You’re not going to win the Monaco Grand Prix in your first lesson! You start small. You learn how to turn the engine on and get to the end of your street first, right?
If you start with Kraken then you won’t need to learn to use another platform. You can get Tier 2 verified and deposit some fiat money within minutes. Then you can do small and simple market trades for as long as you want. As you get better at trading you’ll be able to use all the other features Kraken has to offer.
Some platforms are limited. Some don’t offer fiat trading, and some don’t have very many cryptocurrencies to choose from. Kraken offers both of these and more. Kraken allows users to do margin trading and short selling. This makes Kraken more like a normal stock exchange than most other crypto exchanges. More advanced users will really enjoy these features.
Note: Margin trading is where you borrow currency to trade with. It means that you can make more money, but you can also lose more. Short selling is borrowing currency and then selling it, hoping that the price will go down. You then buy it back and make a profit.
Now that you’ve read this Kraken review, you should know that it’s a big and slightly confusing platform. Kraken is safe, and its fees are low. It has a lot to offer all users, from beginner to expert.
This Kraken review has also shown you how to open an account and how to trade with it safely. Are you ready to give Kraken a try? Have you already tried Kraken and think I’m talking nonsense? Maybe you want to write your own Kraken review?
Let me know what you think — we can learn from each other!