Kraken, Coinbase, and Binance are the three of the most popular crypto exchanges in the world. If you are interested in trading cryptocurrencies, it's important to understand how these three platforms work. The ideal cryptocurrency exchange should be secure, easy to use, and inexpensive.
Let's compare the three exchanges to understand their characteristics, acceptable currencies, pricing, withdrawal options, safety, and more.
Kraken is a United States-based crypto exchange and is one of the most popular platforms in the world. It was founded in 2011 and is suitable for both new and experienced investors. Traders enjoy its low fee and high trading limit. Kraken is among the best for US-based traders. With Kraken, local and international users can all access it using the same platform. Cryptowatch, Kraken's standalone platform, allows you to track real-time data and charting for 8000 cryptocurrency markets.
Coinbase is an American crypto exchange founded in 2012 and operated remotely, without a physical headquarters. Due to their trading volume, they are the largest cryptocurrency exchange in the United States. In April 2021, Coinbase was officially listed on NASDAQ via a direct listing. Coinbase, being extremely user-friendly, is highly suitable for beginners. The barrier to enter the crypto market, which often attracts skepticism and confusion, is lowered due to this easy-to-use exchange. It offers custodial wallets for investors to store their investments. They also ensure your investments in FDIC-insured bank accounts which makes them more secure than other crypto exchanges. For advanced traders, Coinbase Pro offers more options with charts and indicators for the same fee.
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Binance, the largest exchange in the world, was founded in 2017 with a strong focus on altcoin trading. It offers over 500 cryptocurrencies, which is the highest in comparison to other exchanges. It caters to traders who have previous trading experience and need advanced features like charting, peer-to-peer trading, market order, limit order, etc. U.S.-based users cannot use the common platform. They must use Binance's U.S. platform, which has limited features but still offers a variety of trading options.
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Kraken vs Coinbase vs Binance: The Basic Difference!
Depending on where you are in your investment journey, you should have a crypto exchange that supports your needs. Kraken and Binance require basic trading knowledge, whereas Coinbase can be used by beginners as well. Kraken and Binance have advanced features such as market orders, staking crypto, etc. Kraken even supports margin trading and is more suitable for people with previous investment experience. New investors find the funding options and Coinbase's digital wallet to be more accessible.
Kraken Fees vs Coinbase vs Binance: Where Can You Find Them?
While Kraken and Binance have physical headquarters, Coinbase operates remotely. You can download all three mobile apps on Android and iOS. However, users based in the United States need to download Binance's U.S. platform to trade.
Kraken vs Coinbase vs Binance: Weighing The Pros And Cons
Let's understand what makes these companies unique. If you are looking for specific criteria such as safety or multiple funding options, or ease of use, this is a great way to ease your decision-making process.
- It has a low trading fee and is inexpensive.
- It follows strict U.S. regulations for KYC and other security features.
- Kraken offers a high limit on deposits and withdrawals, so it's best suited for people who want to make multiple transactions.
- It accepts fiat currency.
- It has a seamless user experience that makes it easy for beginners and advanced traders to use the app.
- It has multiple funding options like PayPal for trading
- It accepts fiat currencies
- It has a low trading fee and is inexpensive.
- It accepts deposits through ACH and debit card
- Offer a wide variety of coins
- Users based in the U.S. cannot deposit/ withdraw funds via ACH
- The user interface is not beginner-friendly, and the app has a higher learning curve than Coinbase
- It does not have a wallet that you can interact with
- The fee is high in comparison to Kraken and Binance
- It's unavailable in some countries
- Certain coins are not accepted
- They lack transparency regarding security measures. They have not disclosed the actual security measures they take, which does not reassure skeptics.
- The Binance U.S. is a separate version that is made only for U.S.-based traders. This app has limited options for U.S. traders, unlike the regular app.
Kraken vs Coinbase vs Binance: The Differences
Each of these exchange platforms of crypto offers its own set of currencies, and if you have a specific currency in mind, it's best to check all these three. Globally, Kraken offers around 69 coins, but U.S. investors are limited to trading with only 52 coins. They also provide seven fiat currencies. In comparison to other crypto exchanges, Kraken offers U.S. residents Polkadot (DOT). Coinbase offers more than 120 currencies for both retail and institutional investors. Binance users all over the world can trade over 500 currencies and 19 fiat currencies. The most common ones available are United States Dollars, Indian Rupees, Australian Dollars, Great Britain Pounds, and Euros. However, US-based traders can only use Binance U.S., which offers limited currencies, 47 altcoins, and can trade in USD.
The three exchanges offer popular cryptocurrencies like -
- Litecoin (LTC)
- Cardano (ADA)
- Chainlink (LINK)
- Bitcoin Cash (BCH)
- Ethereum (ETH)
Some lesser-known currencies can only be traded on one of these platforms. For instance, traders can find Filecoin (FIL) and Yearn Finance (YFI) on Coinbase, FLOW (Flow), Polkadot (DOT), and Icon (ICX) on Kraken and Binance USD (BUSD) and altcoins on Binance.
For investors, security is always a primary concern, and the unregulated nature of cryptocurrencies makes security measures all the more essential. Although all three platforms follow the know your customer (KYC) rule as per U.S. regulations, let's look at how differently each of these platforms deals with security.
Kraken is known to store 95% of assets in air-gapped cold storage that is under constant surveillance. The signup process has multiple checkpoints, which enhances its security. On the other hand, they use methods like penetration testing, third-party auditing to check proof-of-reserves, and bounty programs to run a bug.
Coinbase stores 98% of its data in a wide geographically-distributed cold storage that is offline. Coinbase is extremely secure as it's insured by the Federal Deposit Insurance Corporation (FDIC) for a sum of $250,000.
Binance, however, doesn't disclose details on its security measures. They mentioned that they store most of the data in cold storage and a very nominal percentage in wallets but did not disclose any figures.
Kraken vs Coinbase vs Binance: Similarities
Some common security features that Kraken and Coinbase provide -
- Two-factor authentication (2FA): During login, the Coinbase system asks for two-step verification for SMS login, and Kraken offers them while making withdrawals and deposits.
- Security Keys: When you insert your security key into a computer, physical keys authenticate your login information. Then, it generates a one-time passcode (OTP) which makes it very secure. You can store your keys in as many locations as you want.
- Authenticator application: If you don't want to use your email or receive a text message as part of the two-factor verification, then you can use authenticator apps. Both Kraken and Coinbase use many authenticators, most commonly the Google Authenticator.
- Security keys: When inserted into the computer drive, the physical security keys authenticate the login while also generating the one-time passcode. You can also create multiple keys and store them in secure locations.
- Pretty Good Privacy (PGP): These companies use PGP encryption to communicate online with the exchange. Both the companies offer guidance while setting this up. This ensures that all communication relating to your cryptocurrency trade is kept safe and secure.
Some common security features that Kraken and Binance provide -
- KYC (know your customer): As per the U.S. regulations, Kraken and Binance strictly follow the process of KYC.
- Penetration testing: It's a technique to test a computer, system, or network against vulnerabilities that an attacker could exploit. Both Kraken and Binance use the method of penetration testing as a security measure.
- Proof of Reserves: It is a method that Kraken and Binance use to prove the number of cryptocurrencies they could spend without generating a live transaction. This also protects them from the risks of moving funds.
- Run a bug bounty program: Both these companies reward ethical hackers who identify and report a vulnerability in the application. They receive a monetary benefit for helping the organization identify bugs so they can fix them. In the long run, companies leverage hackers to protect and strengthen their systems.
Difference: Ease Of Use
Kraken's website is easy to navigate and reliable. It's simple to access help articles and find solutions immediately. Kraken's extended security measures are attractive to investors, but the precautionary steps slow down the process. It not only leads to a higher learning curve but is frustrating for users who want to begin trading immediately.
In contrast, Coinbase has a seamless user interface. It simplifies the login process, provides quick access to features, and offers multiple funding options. New users don't require a high learning curve and can start trading quickly. They only need to verify their phone number. On the other hand, Binance caters to traders with previous experience and (L2) reports that advanced verification can take up to 15 days.
The Bottom Line
On comparing Kraken, Coinbase, and Binance, it can be concluded that all of the crypto exchanges provide advanced trading options, cheap transaction costs, and support a good number of coins. Binance's large selection of cryptocurrencies appeals to international customers, and on the other hand, both Coinbase and Kraken have multi-layer security options.
So, the best crypto exchanges, depending on what features the users are looking for.