Kraken Review: A

Kraken Review: A

Kraken is a San Francisco-based Bitcoin and cryptocurrency exchange owned by Payward, Inc. Kraken is a general Bitcoin exchange and trading platform, meaning that they are focused on building their system for active traders rather than just people who want to acquire Bitcoin. They work with altcoins, but it is not their focus. As of 4/23/14, they exchange the following cryptocurrencies,

payment units, and national currencies:

  1. Bitcoin (XBT)
  2. Litecoin (LTC)
  3. Dogecoin (XDG)
  4. Namecoin (NMC)
  5. Ripple (XRP)
  6. Ven (XVN)
  7. EUR (Euro)
  8. USD (US Dollar)
  9. KRW (Korean Won)

The Kraken Review Overview

Kraken Review: Fees

  • Fees vary relatively significantly from pair to pair in a fairly complex fashion.
  • Nearly all fees decline by volume over the past 30 days.
  • Highest possible starting fee is 0.30%, lowest is 0.10%.
  • High-volume fees gets as low as 0.05% for most pairs.
  • Example: XBT/USD:
  1. 0.30% to start
  2. Declines by 0.01% at a time to 0.20% by 20k USD volume
  3. 60k to reach 0.15%
  4. 200k for 0.10%
  5. 1M for 0.05%
  • Example: XBT/LTC:
  1. 0.20% to start
  2. Declines by 0.01% at a time to 0.15% by 35k USD volume
  3. 200k to reach 0.10%
  4. 1M for 0.05%
  • Example: USD/XRP:
  1. 0.10% to start
  2. Declines by 0.01% at a time to 0.07% at 100k USD volume.
  3. 0.05% at 250k USD volume

Kraken Review: Security

  • Awesome, fast verification process that is very clearly outlined.
  • Heavily focused on appropriate KYC/AML while also remaining customer-focused and promoting simplicity and ease of access.
  • Graphic image at login page based on your IP as a phishing check.
  • 2FA is strongly recommended to customers, but they also do MUCH more.
  • Username / Public ID. Your account is given a public, shareable key so that you can keep your login name secure while still interacting with other accounts. For example, mine is AA66 N84G F63I UJZY
  • The only exchange I’ve seen that offers the ultimate security feature: PGP encrypted e-mails. I hope every exchange begins offering this feature in the future. It’s an excellent way of ensuring that your e-mail is very, very hard to compromise, and, as such, so is your Kraken account. PGP is a little technical for most users, but it shows that the people who built Kraken know what they’re doing when it comes to security.
  • Customizable auto-logout feature
  • “Global Settings Lock”: This feature allows your to ‘lock’ your account, preventing any settings or personal details from being changed, and hiding sensitive info. When you enable it, you set an amount of time it takes for it to disable successfully. The default is three days. Simply another brilliant security measure made accessible to the average user.

Kraken Review: Q&A

I sent in a brief e-mail to ask Kraken some questions. It took them a while to get back to me, which was unusual for their platform–I’m used to pretty much lightning-fast assistance. Maybe the questions required some asking around? Here are the brief Q&A in their entirety (even my pitch :-P):

TheBlogChain: “Can you estimate or speculate on (no guarantee required) at what point you will be adding leverage, and at what degree? Will you expand the available degree of leverage over time as volume increases? I probably missed this reading through your documentation, but do you offer un-leveraged short selling?”

Pam (Kraken Support / Business Development): “You are right, we are working on raising our volume and I am sure that will come in time. We don’t have an ETA on when we will be offering leverage. It is on our list, but volume needs to be higher. Some days it is high, but it has not been consistent enough on a daily basis to offer leverage. We don’t offer un-leveraged short selling yet, but again that will come with higher volume when we offer margin trading.”

TheBlogChain: “What is your total approximate volume in BTC between all currency pairs in an average day? I have estimates, but I expect they’re pretty low.”

Pam (Kraken Support / Business Development): “We are not able to give you an average on volume of all pairs on a daily basis and don’t have data on this. I think you have to go by your estimates and what you have been seeing. Again, we are optimistic as our volume is increasing with time. If you want to see BTC/EUR, here is a link.”

Note: I constructed the volume estimates at the top using some guesswork, but mostly sifting by through data to find consistent volume trends with which to make estimations.

TheBlogChain: “Do you offer an affiliate or referral program? Using Google Analytics, I’ve determined that my readers are much more likely to start using a service if they’re offered a promotional bonus for doing so. If the program is beneficial for me it also gives me a good incentive to make sure to stay up to date with your exchange and news regarding it. If you don’t currently offer one, I’d love if you started–as I said above, I’m a big fan of your exchange, and I’d love to promote it to the best of my ability. Offering or not offering a referral program won’t change my review of your site in any way, of course.”

Pam (Kraken Support / Business Development): “Sorry, at the moment, we are not offering affiliate programs.”

Kraken Overall: A

Legitimacy: 10/10
Ease of Use: 8/10
Trading Utility: 7/10
Customer Service: 9/10
Security: 11/10

Summary: Kraken is an exemplary institution that the rest of the Bitcoin world should look up to. On top of being one of the first exchanges to pass an independent audit, they’ve consistently shown themselves to be leaders on security practices, particularly in the realm of security services offered to users. They have nigh-uncrackable security, if the user wishes to utilize every layer of it. Why did I give them an A instead of an A+? They need to increase and diversify their volume, add leverage, and cater better to US-based customers, a group currently somewhat excluded due (primarily) to unresolved (and at current seemingly unresolvable) regulatory issues.

 
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