Coinbase vs. Poloniex: Exchange Review: Are They Safe?

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Coinbase and Poloniex are two of the most prominent cryptocurrency exchanges in the market today. Their platforms have similar functions, primarily the trading of Bitcoin, Ethereum, and other digital assets, and they appeal to many of the same potential users as well. There are, however, some key differences between these products as well that interested consumers should be aware of.

Concerns like transaction fees, functionality, accessibility, and other important factors can make a large difference in the profitability and usability of an app. This article will look at Coinbase and Poloniex side-by-side to help readers determine which platform is the best fit for their own specific needs.

Comparing Coinbase vs. Poloniex

One of the main differences in Coinbase and Poloniex is that Coinbase has a reputation as an excellent platform for beginners, whereas Poloniex users may require a greater degree of familiarity with crypto markets before they start trading with it.

One feature that makes Coinbase more beginner-friendly Poloniex is the variety of payment types that customers can use to buy in with. Coinbase accepts credit and debit cards, bank transfers, and a variety of different cryptocurrencies, whereas Poloniex only takes cryptos.

Coinbase can also pay out in cryptos, bank transfers, and PayPal, where again Poloniex exclusively uses cryptos. Despite this limitation there are more than 70 different types of currencies that Poloniex accepts, while Coinbase only takes Bitcoin, Ethereum, and Litecoin.

The result of this is that interested users already have to have purchased some form of cryptocurrency before they start using Poloniex, while Coinbase can be the first platform that someone uses to buy into the digital market. In addition to this fact, Coinbase is also known for their user-friendly design and functionality, which can help to make the experience less confusing or intimidating.

Poloniex has a clean website design that is accessible and functional, with candlestick charts, order book visualization, and a variety of overlays. Their platform may be somewhat more intimidating to new users in part because it has more options for advanced features beyond those found on Coinbase, such as margin lending, however it is still relatively user-friendly.

Options offered by Coinbase and Poloniex

Coinbase is best known for their GDAX digital asset exchange, one of the most used products of its type. It offers features like up-to-the-moment pricing and orderbooks, a variety of charting and prediction tools, and a user-friendly interface.

GDAX is backed by the New York Stock Exchange and other major investment groups and is also fully insured by the FDIC. Other features on their site include a variety of extra tools for merchants and developers in addition to those that are offered to individual investors.

Poloniex has very similar products ant functions as those mentioned above, however they have a few more options for more experienced investors as well. This includes lending and margin trading options, which help expand the ways that savvy investors can monetize their holdings.

Consumer Support

Both Coinbase and Poloniex have faced some criticism in the past for their customer service departments. The complaints about their responses to customers’ issues became so pervasive that Coinbase went to the extreme lengths of adding telephone operators that customers can actually speak with person-to-person.

While this level of service may be common in most industries, it is extremely rare for a cryptocurrency or exchange to offer it. This is another feature that may appeal to newer investors as well, as it can be helpful to talk through issues with a trained professional rather than having to rely on online help features.

Poloniex, by comparison, only offers an FAQ page to help users, with no options to speak directly to company representatives – even through chat or instant messaging features. They use what they call Support Tickets in order to address specific customer issues, however these involve a complicated sign-up process and can take an indefinite amount of time to receive a response.

There are a number of customer complaints that can be found online claiming that Poloniex ignored them entirely, as well as other issues like freezing accounts, delaying withdrawals, and other customer service issues. While both companies have had their problems keeping customers happy, Coinbase certainly has a better reputation than Poloniex for hearing and addressing their clients’ needs when problems do arise.

Trust

Coinbase is one of the most trusted cryptocurrency exchanges in the market today. They do a massive amount of business overall and are considered to be one of the premier organizations in the industry.

Poloniex does not have as strong of a reputation, due in part to the fact that they simply have done less business overall. Additionally, there are the complaints about their customer service mentioned above, as well as with their security, which is discussed in the section below.

Security

There have been some security issues that have affected both Coinbase and Poloniex. Coinbase is thought to have been affected much more recently however, while Poloniex’s attack took place back in 2014.

Despite the fact that it was years ago, Poloniex’s attack is still regarded as one of the largest cryptocurrency thefts in history.  More than 12% of the company’s total coins were taken in the incident, a value of nearly 800,000,000 USD. The way that Poloniex compensated for this was to increase their security measures and to reimburse all of their customers the full value of the coin that they lost.

The company has publically stated that there have been no further attacks on any of their properties since then, however there are also some indications that this is not the case. There are some reports of irregularities that may be the products of hacking, however this has never been officially proven.

The attack that Coinbase faced came in February of 2018 and involved a two-tiered approach that both stole Bitcoin out of users’ wallets and took their credit card information. Coinbase has not disclosed how much BTC was taken overall, however one Coinbase user reported that they alone lost 67,000 USD worth of cryptocurrency.

Coinbase has also not addressed any changes that they may have made in the wake of this attack, so it is not known at this time how vulnerable they are to a repeat incident. They do however still insure customers against any losses and keep the vast majority of their funds in offline cold storage accounts that are particularly difficult to access inauthentically.

Fees

Coinbase's fees are slightly higher than Poloniex’s. Coinbase charges 1.49% per transaction made with their wallet or a direct bank account, and 3.99% for all credit, debit, and PayPal purchases. Poloniex charges .15% for makers and .25% for takers for all transactions under 600 BTC in total, and they scale their fees down for all transactions greater than that.

Offered Crypto

As mentioned in the introduction, Poloniex carries a much wider variety of currencies than Coinbase. Coinbase strictly carries Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Their representatives have mentioned in interviews and promotional materials that Coinbase has some tentative plans to add other currencies to the exchange, however there are no specific details for what currencies this may entail at this time.

Poloniex currently offers over 70 different types of digital assets through their exchange, including all those mentioned above. They do not trade in USD, though the USD proxy currency Tether is available.

Summary

There is considerable overlap that can be found between the uses for both Coinbase and Poloniex. Both are user-friendly markets where consumers can trade in some of the largest cryptocurrencies in the world today. They offer reasonable rates and make it easy for users of a variety of levels to access and enjoy their platforms.

There are still some differences between their platforms, however, especially regarding the types of assets that are traded and the fees that they assess for them. Poloniex in general will cost less, especially for users that are dealing in high-volume trading or that are looking to diversify their portfolio.

Both companies have experienced complaints about their customer service, however Coinbase has recently added a telephone-based service option in order to better address customer issues. Poloniex remains one of the more frustrating markets to have to deal with in the event of an issue, however this is an industry-wide issue.

They have also both experienced security issues, including one of the largest cryptocurrency hacks in history in Poloniex’s case. Despite these issues, both companies have shown a willingness to take care of their customers in these events and both are insured against future attacks as well.

For first time crypto investors that are still learning the market, Coinbase is a better entry point – if only because it does not require users to previously own some form of digital asset. Once users have been in the market for some time, however, they may be attracted to the lower fees and more diverse options of Poloniex. There are pluses and minuses to both platforms and interested users should decide which one best fits their specific needs.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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