Exchanges

Kraken vs Coinbase – A Comprehensive Comparison

Coinbase vs kraken
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Are you having the classic Kraken vs Coinbase argument?

Do you want to know which one is better? Let’s talk about it.

These are two of the best exchanges available for buying cryptocurrencies online. But how do they compare? Which one is better and why?

This is just the tip of the iceberg when it comes to questioning which exchange is the better one.

If you are new to the world of cryptocurrencies, then finding the best exchange for you should be one of the most necessary tasks. While both Coinbase and Kraken are excellent exchanges, each will suit different users differently.

In this detailed comparison, we take every aspect of both the exchanges and see which one has the edge.

What is Kraken?

Kraken is the largest Bitcoin exchange in the world when it comes to Euro volume.

Based in San Francisco, it was founded in 2011 by founder Jesse Powell. Jesse previously has worked in Mt. Gox, which was the biggest Bitcoin exchange at that time. After the Mt. Gox episode, Jess wanted to create the most secure Bitcoin exchange there is.

And, as a result, Kraken was born.

Till this point, Kraken is one of the most secure exchanges out there. It has good volume and is one of the most used exchanges right now.

You can use fiat currencies to buy Bitcoin and a variety of other cryptocurrencies inside Kraken.

What is Coinbase?

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam and is also based in San Francisco. It is both a cryptocurrency exchange and also serves as a wallet service.

Coinbase was also started with an intention to make a better exchange than Mt. Gox. But, with Coinbase, their main aim was to provide an exchange which is super easy to use for the general public.

And they have succeeded with that as well. It is one of the easiest exchanges to use for people in 33 countries. You can use fiat currency in your country to buy Bitcoin, Ethereum, and Litecoin.

Coinbase even has its own exchange platform called GDAX. GDAX stands for Global Digital Asset Exchange. GDAX offers a good trading experience and records all transactions like volume and price levels.

If you are new to the crypto space and if Coinbase is available in your country, then it is the easiest method to get some Bitcoin, Ethereum, and Litecoin.

The Kraken vs Coinbase argument has been going on for some time now. This post will explain in detail what each platform offers and how they are different from each other. You may find Coinbase perfect, but someone else may say the same thing about Kraken.

Let us tell you why.

Creating accounts

Even though they are two different platforms, creating accounts on both the sites are pretty similar.

Kraken:

Go the https://www.kraken.com and click the sign-up button in the top right corner.

Kraken vs coinbase

On the next page, enter your name, email address, and password. Agree to their terms and conditions, and click the sign-up button.

Then you are asked to enter your country of residence and also the time zone you are located in. You also have the option to enter a master key and a PGP public key. These keys are used to improve the security of your account.

Once you provide the activation key you receive in your email address; you can activate your account.

That’s how you create an account on Kraken. It will take less than 5 minutes to get this done. You also have entered a master and a public PGP key to improve the security of your account as well.

Inside your account, you need to undergo the verification process to unlock different tiers of your account. You can do fundamental trading and withdrawal even with the first tier account. For most freedom, unlock the last level by providing the requested documents.

Coinbase:

Signing up of Coinbase is a breeze as well.

Go to https://www.coinbase.com and click the sign-up button.

You will be given two options to either register as an individual or as a business. Click the individual tab and provide your first name, last name, email address, and password. Once done, hit the create account button.

You now have to verify your email address. Once it is done, you can access your account. You will have to verify your identity in Coinbase before you can purchase or sell any cryptocurrency.

On successful completion of verification, you can use your account freely for both buying and selling cryptocurrencies.

Cryptocurrencies Available

The number of cryptocurrencies to trade is another aspect of an exchange that matters to most of the people.

Kraken:

Kraken comes with a wide variety of coins you can purchase with your fiat money. They are

  • Bitcoin
  • Ethereum
  • Bitcoin Cash
  • Dash
  • EOS
  • Ethereum Classic
  • Gnosis
  • Litecoin
  • Augur
  • Stellar
  • Monero
  • Ripple
  • Zcash

Kraken allows the use of four fiat currencies namely U.S. Dollar (USD), Euros (EUR), Canadian Dollars (CAD), and Japanese Yen (JPY).

Apart, from buying cryptocurrencies with fiat money, you can also deposit your cryptos and trade inside the platform as well.

When it comes to crypto-to-crypto trading, there are both Bitcoin and Ethereum trading pairs which give you a lot of options.

Coinbase:

Coinbase is limited when it comes to the number of cryptocurrencies you can buy with.

Right now, you can buy Bitcoin, Ethereum, and Litecoin with fiat currency.

Though people thought they might add more coins in the future, Coinbase adopts a stringent method for including new cryptos on the platform.

You can’t trade between cryptos on Coinbase. For that, you will have to use GDAX which is Coinbase’s exchange platform.

Trading Platform

Kraken:

Let’s see how the trading platform on Kraken performs.

Trading among cryptocurrencies is a very easy thing to do inside Kraken’s exchange. There are many crypto pairs, and even as a beginner, you can trade with a little practice.

Apart from your regular crypto to crypto trading, Kraken gives us a number of advanced trading options. They are explained below.

Margin Trading:

Kraken allows you to do margin trading. Margin trading gives you to the ability to trade with more money than you have deposited. Many traders love this as it gives more money to play with.

In other words, you are borrowing some money from the exchange to do some trading. You can do margin trading with different ratios and make more money if the move is right. If you are trading with a leverage of 2:1, then you can buy twice as much Bitcoin as you have deposited. If the price keeps going up, you are going to be profitable. But if it falls, then you will take a loss.

Let’s explain this with an example. Assume that you are depositing $10000 into your account. Now with a leverage of 2:1, you can purchase $20000 worth of Bitcoins. If the price shoots up by 10%, you now have a profit of $2000. Without margin trading, this profit would have been just a $1000.

Do note that it can lead to a higher loss as well. Let’s say the price fell by 10%. With leverage, you would have lost $1000, but now you have $2000 from your initial investment of $10000.

Short Positions:

In Kraken, you will also be able to short your cryptocurrencies. This means you are anticipating the price to go down. If you are shorting Bitcoin at a price of $10000 and if the price goes down to $8000, then you can buy Bitcoin back with a profitable $2000. But if the price goes the other way, you would end up in a loss.

Coinbase:

Coinbase does things in a much more straightforward fashion. It does not give you a bunch of options, and that’s why it is super beginner friendly.

Coinbase is a broker and what do we mean by that? Allow us to explain.

The one thing you can do with Coinbase is that you can either buy or sell any of the three cryptocurrencies they currently offer. If you want to buy $10000 worth of Bitcoin, you will place an order. Coinbase will then execute the order for you.

Once you have made enough profit with a price surge, you can place an order to sell those coins. Coinbase will sell it for you, and you can withdraw your money from Coinbase.

You can not exchange the cryptocurrencies inside Coinbase as you would do inside Kraken. You can simply buy and sell and that’s that Coinbase offers. Nothing more.

Fees

The Fee structure is one of the deciding factors to choose your exchange if you are planning to put a lot of money into crypto trading.

Kraken:

Kraken charges a fee for every trade made. The fee is based on the amount of trade volume you have done on that trading pair.

The maker fee ranges from 0% to 0.16% while the taker fee ranges from 0.10% to 0.26%. If you are doing less volume, then you would be paying high fees. If you are doing outstanding volumes over a 30 day period, then you applicable fee will be much lesser. The fee structure for XBT/EUR pair is shown below as an example.

There is also a small fee for depositing and withdrawing fiat currencies. It is pretty low when compared with other exchanges. Find the fees for both deposits and withdrawals below.

Coinbase:

Though Coinbase makes it 100 times easier for us to get cryptocurrencies, it comes at a price.

The fees on Coinbase are pretty high. If you were to trade on Coinbase with this fee, you would not be a happy trader. Fortunately, there is no trading in Coinbase.

If you are depositing money via bank transfers, you will have to play a fee of 1.49% which is pretty high. If you are going to use a credit/debit card, then the fee goes to 3.99% which is definitely not that low.

This fee might vary depending on the country you live in. But the fact that you are paying too many fees remains.

Security

The crypto market is growing exponentially and will continue to do so in the coming years. When you are going to put in a lot of money as an investor, it is essential that you do some research about the safety of assets in an exchange.

Here, we have done that research for you.

Kraken:

Kraken was built with the idea that they should be the most secure exchange out there.

Have they succeeded in their quest?

We would like to say yes to that.

There have been no reports of funds being stolen from Kraken. However safe the exchange is, it is best not to leave your cryptocurrencies here. Yes, Kraken is super safe, but there is no exchange that is 100% foolproof.

If you are going to buy some cryptos and hold them for life, then transferring them to a wallet is the right thing to do.

What safety features does Kraken provide?

1. You can use two-factor authentication on your account. You will be asked a secondary password whenever you log in to your account. Two-factor authentication also comes into play when you are trying to withdraw your funds. This is necessary as someone else can’t phish your details and withdraw all the funds. They will need the secondary pin which only you will have.

2. You can also lock your IP. This feature helps you in a way that no one can use your account from any other IP address. This will come in handy if your account has been hacked and the hacker tries to access your account from a different IP address.

Coinbase:

Is Coinbase safe?

Yes.

Coinbase is a secure Bitcoin broker, and it adopts very good safety measures for protecting your funds. But you should make some effort at your end to safeguard your account.

You should make sure that you are visiting the correct URLs, not install any malware by mistake, and also store your passwords safely.

There is, however, one good thing with Coinbase. The funds stored in Coinbase are insured by a Syndicate of London. If they were to go through a site-wide attack and lose all the funds, the users would get their money back, thanks to this insurance in place. All exchanges must do something along these lines to safeguard their clients’ funds.

Customer Support

The user experience of any exchange is defined by its customer support. If an exchange has good customer support, then it will naturally get more users.

In this case, both Kraken and Coinbase have not such a great customer support.

Both exchanges have grown really fast, and as a result, the customer service has taken a hit.

Coinbase consistently has many negative customer support experiences. They have a bot to chat and also telephone support, but people still aren’t impressed with the slow customer support they provide.

Kraken is slightly better than Coinbase when it comes to customer support. The tickets are taken care of relatively quickly even though there is no way to get instant support.

If you are looking for pristine customer support, none of these two exchanges provide that. They do take care of the issue but not at the earliest.

Exchanges are not wallets

We have said this earlier, but we will say it again.

Do not use your exchange as a wallet, i.e., don’t store your cryptocurrencies on an exchange.

Though both the exchanges have excellent security in place, there is no exchange in the world that is hackproof.

If you are a beginner, maybe you can keep your coins on an exchange until you learn how to create and use a wallet. Once you do, transfer your coins from the exchange to the wallet immediately.

Kraken vs Coinbase: Which one is Better?

The argument of Kraken vs Coinbase is something every newbie will go through when they enter the crypto market.

Both are excellent exchanges that target different groups of people.

If you are a newbie to the world of crypto, you need something simpler to start off. In this case, Coinbase is a great option. It has a gorgeous user interface, and you will be up and running in no time. Once you buy your first few cryptocurrencies, and as you gain more experience, you can move on to complex exchanges and trading platforms.

If you are an intermediate or an advanced user, then an exchange like Kraken would make more sense to you. It comes with a variety of tools like margin trading, shorting coins, and much more. The fees are also pretty low making it a good choice for trading.

There you go. There is no one winner for all. It depends on what you want to do.

So who’s your winner in this Kraken vs Coinbase debate?

Do tell us your answer using the comment section below.

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