Let’s talk about Kraken and Coinbase …
So, you are on your way to becoming a crypto hobbyist and you are ready to start trading! But where to start ?!
Cryptocurrencies are not like bread, sugar, eggs, and milk. We can’t go to our local store to get them, and Amazon definitely doesn’t ship them with next-day delivery! Instead, we need to use the services of a cryptocurrency exchange.
Essentially, these cryptocurrency exchanges help us exchange our fiat currency for cryptocurrency. They also provide a platform for cryptocurrency trading, sale and storage. Such a large choice, and how to understand which one is better?
Kraken Exchange and Coinbase are some of the largest and most reputable online exchanges. However,they still need variations.
Kraken and Coinbase are two different platforms.
We cannot begin our review of the Kraken and Coinbase cryptocurrency exchanges without first highlighting the huge difference in their features.
Let’s take a glance at what the two exchanges provide.
Kraken offers leveraged trading (or margin trading). This means that you can trade larger amounts than you deposited.
Let’s look an example:
Imagine you deposited $5,000. Then you could buy $15,000 worth of Bitcoin. Bitcoin’s price goes up and suddenly your investment is worth $20,000! If you sell at that moment, you will make a profit of $5,000 – So you will double your investment.
This way, you can make a lot more money than you deposited! However, there can be a reverse reaction: you can also lose more money than you deposited.
For example, you buy $15,000 worth of Bitcoin with your $5,000 deposit. The price dropped a lot and now your Bitcoin is only worth $14,000. If you sell at this stage, you will lose $6,000. You only deposited $5,000, so you owe the Kraken $1,000. This is how leveraged trading works.
It’s all happening because the trade margin is flexible and it is changing every minute. So to not lose—the right solution is to always follow it and the information about it. For doing that, in the 21st century it is easy to find Instagram or facebook influencers and have an ear about their objective opinion and predictions.
Coinbase does not support leveraged trading like Kraken. It’s just a crypto brokerage service. It basically works like this:
- You are submitting a request to Coinbase that you would like to buy X Bitcoins:
- The platform then trades for you:
- The Coinbase exchange then adds the number of Bitcoins that you bought to your Coinbase Bitcoin wallet:
Kraken VS Coinbase: Pros and Cons
It’s important to understand that each service and product has it’s own advantages and disadvantages.
Software technologies are developing more and more. Due to artificial intelligence, there are programs that are generating random shapes or random numbers for users. Cryptocurrency platforms generally use random number generators for security.
Both cryptocurrency exchanges follow industry best security practices and are widely recognized as secure cryptocurrency exchange platforms.
But Coinbase has an extra layer of protection. Funds held in the Coinbase digital wallet are insured by the Lloyds of London syndicate. Thus, if hackers somehow hack and steal our cryptocurrency, any lost money will be refunded. It is very cool!
Coinbase’s fees are much higher than Kraken’s. They also offer the option to purchase using a credit / debit card, which sells for a higher price.
What cryptocurrencies you can buy:
It’s simple: you can only trade four cryptocurrencies on Coinbase.
- Bitcoin (BTC)
- Ethereum (ETH)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
If you want to exchange Dash or Melon, Coinbase would not be the right fit for you. You can use Kraken instead.
So now that you’ve read our Coinbase vs Kraken comparison, you’re ready to choose your winner in the Kraken vs Coinbase battle. If no, and you need more information check out another good comparison of Kraken VS Coinbase and get more info about it!