Comprehensive Poloniex Review 2018
Last Updated: 16 September 2018
Is Poloniex considered a secure cryptocurrency exchange? This thorough Poloniex audit is designed to share the insights on some of the steps the company took in attempt to become one of the world’s leading cryptocurrency marketplace.
Poloniex is US based FinCEN (Financial Crimes Enforcement Network) registered cryptocurrency exchange. It was founded in January 2014.
According to Fincen, Poloniex’s registered address points to Wilmington, Delaware. Nevertheless, the officially displayed address belongs to Poloniex’s agent. Furthermore, the company lacks to clearly display information about the firm as well as its founders and corporate officers. The company’s LinkedIn profile displays an associated site Owler where Tristan D’Agosta is named as founder & CEO. Interestingly D’Agosta is a former freelancer, music composer and writer.
The Poloniex Advantages
- Poloniex is known to be the biggest exchange by Ethereum volume in 2017.
- Exchange offers plenty of top coins for some serious crypto traders.
- Detailed interactive charts and plenty of tools made for analyzing data in real time.
- High volume margin trading and lending services for top crypto coins.
- Welcomes users from all over the world.
- Over 70 crypto coins are available for daily trading.
- Relatively generous deposit and withdrawal fees.
- Very active community when it comes to delivering on point support.
Disadvantages of Poloniex
- Users are actively reporting funds withdrawing issues.
- The private keys to your wallets are being stored on Poloniex’s centralized server, further increasing the potential of security breaches.
- Poloniex is a crypto only exchange! Users looking to deposit fiat should consider an alternative.
- Poor customer support.
- Physical location of the exchange is unknown and subject for raising eyebrows.
- High volume Traders are required to verify identity.
From the marketing standpoint
Due to lack of transparency about company’s management, ownership and physical locations had resulted in folks questioning the legitimacy of the cryptocurrency giant. I personally agree with the majority, sometimes silence isn’t always appropriate. Many users are concerned about the security of their funds. Nevertheless, the media sometimes delivers the false sense of security to the public by giving companies credibility despite the lack of full transparency. The company still continued to increase its user base and overall volume in spite of many potential security issues.
Poloniex Surprises Everyone With Impressive Stats
No wonder Poloniex is reportedly was considered one of the five most popular cryptocurrency exchange in 2017. Binance would be one of the fewer exchanges that can proudly claim the traffic trophy over Poloniex.
Some 15% Poloniex’s visitors are coming from Russia, another 11% are from the US, 6% from Ukraine and 6% from Vietnam. The fact that the exchange is almost free from all governmental regulations makes it stand out among its competitors in terms of global user reach. The popular cryptocurrency exchange supports more than 70 crypto coins for daily trading.
Several non fiat competitors are Shapeshift and Yobit. Together they offer about 300 coins for trading. Many users choose shapeshift over Yobit, because users are not required to create accounts and submit documents for verification. Despite the flexibility, Shapeshift lacks support and proudly charge extremely high transaction fees. Furthermore, a large number of users made reports about ShapeShift’s dishonest business practices, where funds have only gone one way. I would advise folks to stay as far away as possible from this illegitimate company.
Unfortunately, Poloniex doesn’t offer a mobile app, however, the mobile web version of the exchange simplifies trading from mobile devices. As with almost every exchange, Web developers are welcome to utilize Poloniex’s API for custom software integration. Poloniex seem to be very popular among a crypto to crypto margin traders group and welcome users from across the globe.
Poloniex’s Safety & Security
Again, I’d like to stress out the importance of being aware of the possible circumstances which may lead to potential negative impact when private keys are being stored on centralized server. The private keys to your crypto coins are being stored in single location, which means if attackers are successful, the likelihood of your coin being compromised is great. Nevertheless, Poloniex makes claims about storing most of the coin in an offline “air-gapped” cold type of storage and provides 2FA authentication for its users in further attempt to secure the crypto coin from being compromised.
Despite centralized cryptocurrency exchange structure, it seems like the executives behind the platform are a group of honest individuals afterall. Sometime in 2014, Poloniex experienced a minor security breach, as result some 12% of total Bitcoin was compromised by the hackers. Due to company’s strong integrity, every missing coin was refunded back to each victim. The incident has proven that even the honest folks sometime wear the mask. Many experts and traders alike recommend maintaining a balance of no more than 20% of your total coin on a centralized exchange.
The User Experience
The interface is a beauty in my opinion. The user friendly BTC market navigation links that are made for easy order execution, without having to wonder around the site (XBTCE is a good example of “not a user friendly interface”).
This is what Poloniex interface appeared like in 2014.
This is what Poloniex interface appeared again in 2017.
Users make reports about Poloniex’s exchange platform trading experience being closely comparable to Bittrex and Bitfinex. Simple navigation make trading easy even for the beginners. Though some users make complains about deposits taking longer than usual to become available for trading, however in my personal experience this was never an issue. There were a couple of instances when a deposit took more than several hours due to Bitcoin network being heavily clogged in December 2017. Furthermore, folks make claims about unresponsive customer support, where tickets are not being addressed efficiently.
The Benefits of Having a Poloniex Trading Privileges
The Poloniex registration process is as simple as taking your dog for a walk in the park. KYC still remains a mandatory process across all major exchanges, and frankly it’s the right thing to do. Poloniex’s isn’t exception, though due to the fact that there is no fiat involved, the verification process is somewhat friendlier. A single account is allowed to be registered for every user, violating the rule will result in reprocution. By registering an account, a trader will be allowed to buy, sell cryptocurrency as well as take advantage of the lending services Poloniex offers to its users. Margin allows traders to take advantage of the volatile market even during the bear market. For those with less risk tolerance, a profit can still be made by lending cryptocurrency to others, while making a steady interest. Alternatively, a trader may choose to borrow the coin on margin by paying a fixed interest rate to the lending party.
Account Verification Mechanism
The first level of verification could be attained by simply providing your name, current residency information and an email. That's it! Now, you will be permitted to deposit and withdraw coin equivalent to $2,000 as well as perform daily crypto trades. By completing level two verification, the deposit and withdrawal limits will now be raised to $25,000 in crypto equivalent currency. To be eligible for level two verification, Poloniex will ask for your address of residency, a date of birth and a photocopy of your passport. If you need the lift up above $25k, consider reaching out to support.
The best part about non fiat exchanges like Poloniex is the absence of hefty deposit and withdrawal fees. Though when placing an offer to buy or sell your crypto coin, a minor fee must still be paid. In essence a maker (a trader who is making the market by setting up a specific price generally pays a lesser fee of around 0.15%. Whereas the taker (who takes the order from the market), pays a higher fee between 0.05 and 0.25% depending on volume being traded. Furthermore, lending fees are being imposed when a trader is made a decision to lend the coin away to other traders. In the competitive market, by offering a lower interest rate, a lender has a higher chance of finding a borrower. An average offer to lend asks for around 0.2%, minus Poloniex’s 15% fee.
A list of Alternative Solutions To Poloniex
Here is the list of cryptocurrency exchanges that are in my opinion should be considered reviewing.
- Kraken.com – offers less crypto coins for trading, high liquidity, accepts fiat deposits and allows fiat withdrawals. Consider taking a peak at my comprehensive Kraken review.
- Bittrex.com - offers a great variety of crypto coins. Fiat deposits and withdrawals are permitted. A complete Bittrex review is also available.
- Yobit.net - over 6000 crypto coins are available for trading, though most are low volume.
- Shapeshift.io - a popular, yet poor and expensive crypto exchange service provider. No account registration is required.
- Changelly – similar to Shapeshift. Fiat deposits are allowed. (Czech Republic)