Cryptocurrency exchanges are simply online platforms that help you exchange one kind of digital asset for another. An exchange accomplishes this by acting as an intermediary between buyers and sellers.
Think of a cryptocurrency exchange as a brokerage. You can deposit money through bank transfers, wire, etc. If you, the trader, want to exchange between assets, you will have to do so by first paying a conversion fee (just like when you go to a bank and exchange one Fiat for another).
There are some extremely popular cryptocurrency exchanges out there one such being, the Binance.
Binance was founded by Changpeng Zhao in the year 2017. The company was forced to relocate after the Chinese government decided to ban cryptocurrency trading. Currently, Binance has offices in Japan and Taiwan.
Binance exchange is one of the most popular cryptocurrency exchanges offering more than 45 virtual coins i.e. Bitcoin (BTC), Ethereum (ETH) and Binance Coin (BNB). It is mainly known for its crypto-to-crypto trading services. This means that it allows trading between two cryptocurrency pairs.
There are a few benefits to using Binance as your cryptocurrency exchange platform. Firstly, major upside to trading on Binance is something we have already discussed—it supports more numerous cryptocurrencies including Bitcoin. Since it is one of the largest volume exchanges in the world, many traders feel comfortable that they are transacting at market price. Another benefit to using Binance is that it has an extremely low trading fee, however, this is mainly only the case if you choose to pay in the native token—BNB.
Despite its rise to popularity, like everything else in life, there are a few drawbacks of using Binance Exchange. The following section will highlight some of the shortcomings you must keep in mind before using its services.
While Binance boasts of maintaining a high standard of security with multi-tier and multi-clustered architecture of firewalls, this is far from the case.
In 2018, there were reports of strange activities taking place on the platform. While these rumors were never confirmed, many people claimed that the exchange limited its activities. These mainly included the withdrawal of funds being stopped. A thorough investigation into the matter confirmed that the Exchange had been hacked for nearly $45 million in July of 2018.
While Binance announced that the funds were safe and that they would be covering any losses that came about during the hack along with upping the ante on their security system, many users did not feel satisfied. Many users felt their funds were not safe with the crypto-exchange and people began pulling away.
The same thing happened a year later in 2019. Reports say that nearly 7,000 bitcoins were stolen from Binance’s reserves. While these coins did not directly belong to the customers—none of the client’s wallets were affected—these coins are said to have been funds belonging solely to the Binance Exchange.
Hackers said they were able to withdraw this large sum, nearly $40 million, in a single transaction through an epic security breach. Because the main cryptocurrency that was stolen was Bitcoin, its value dropped as much as 3.1%.
However, what shocking was that the hackers were also able to access customer data and leak it. According to the hackers, they were able to get a hold of over 60,000 customers’ data. The hackers allegedly circulated the sensitive data bit by bit.
However, we see that the Exchange’s track record has been far from stellar two years in a row. Who knows that the year 2020 has in store?
Glitches and Breaks
Customers have begun complaining that the platform provided by Binance has become buggy over time. That is, they do not experience a smooth transaction experience. This is amplified during times when there is a jump in Bitcoin quotes. As clients flock to the exchange to make transactions, the platform begins to glitch and break— this is simply because the system is not equipped to handle such traffic.
What this essentially means is that Binance fails to deliver in a quick, timely manner meaning some users will not be able to take advantage of a favorable climate.
In addition to this, many users complain of insufficient customer care. While you are encouraged to contact Binance via email or live chat, users complain that it is long before their inquiries are answered. This delayed response time could be because they host many customers making downtime unavoidable. However, one thing we would like to point out is that they do not offer phone support, something many other exchanges offer.
Comparatively less User-friendliness
Binance does not offer much assistance to someone who is just starting to invest in cryptocurrency. While it is a complex process to follow, many popular exchanges extend some help to those who are starting. Instead, Binance required users to already own cryptocurrency before investing in the exchange. This essentially means that the new user will have to acquire Bitcoins elsewhere and then invest them into the exchange. This complicates an already tricky process.
Leverages and Short Positions
Leverages are defined as an operating facility offered by a broker to an investor which allows them to take positions larger than the amount of requisite funding. A short open refers to a trading technique where security plans are sold to buy them again later on. This is done with the investor anticipates the price of an asset or stock will fall shortly.
Binance didn’t offer these features until recently which means that traders who joined earlier were not at the same advantage newer traders were at. Because Bitcoin is one of the earliest currencies, it becomes difficult to compensate older traders about these new policies.
While their drawbacks such as flimsy security, poor customer service as well as a platform that is prone to brakes is a deal-breaker for some clients. If you’re one such client, then you’re encouraged to look at other options. We highly recommend CoinMarketSolution.
This is a relatively young cryptocurrency exchange that hails from Estonia. What sets it apart from other cryptocurrency pairs is that it offers traders the option of trading tokenized assets.
Because this is still an infant exchange, CoinMarketSolution has managed to successfully attract upwards of 3,000 traders who can profit from the buying and selling of assets on the platform. Thus, it is seen as a promising up and comer.
Why should you go for CoinMarketSolution? – Pros
- This is a licensed exchange that allows for the trade of tokenized assets i.e. stocks, gold indices, etc. You as a trader are allowed not only trade in the cryptocurrency market but also the commodity market as well as the stock market. This kind of flexibility is not offered by exchanges such as Binance.
- You may be thinking that managing several different accounts for different markets might become a hassle—that’s where you’re wrong. CoinMarketSolution helps its traders keep it simple by allowing them to use one account for all their trading needs, no matter which market you’re trading in.
- Another great reason to switch to CoinMarketSolution is the risk-free transactions and replenishment of your account in Fiat. By doing this, CoinMarketSolution makes joining the world of crypto trading extremely easy. As you’ll recall one of the biggest drawbacks of Binance was the fact that new users did not have the option of trading right away without acquiring bitcoins from another source. To get started with CoinMarketSolution, you don’t need to buy Bitcoins.
- In addition to these great features, the exchange provides its users with a smooth, easy-to-use interface and the peace of mind of dealing with a platform that is licensed by the European Union.
Traders can take advantage of the close contacts CoinMarketSolution has established with VerifyMeTrade and the Security Standards Board. This helps the exchange ensure to its users that the platform’s activities are strictly regulated and ensures that there will be no incidents of theft of coins as a result of hacking.
Yobit Cryptocurrency Exchange
Cryptocurrency exchange YoBit is one of the leaders in the number of trading pairs. However, the reputation of the exchange on the Internet is extremely mixed. But even this does not prevent this exchange from maintaining high trading volumes. According to some reports, the exchange began its work in January 2015.
There are no exact data on the creators of the exchange in open sources. The company also hides accurate information about its location. Presumably, the founders of the cryptocurrency exchange come from the CIS countries. This conclusion is obvious due to the availability of the Russian version of the site and the great authority of the support service operator with the nickname Matveevka. Also, the exchange is completely missing verification, which is why many traders rate it as unreliable. In addition, the exchange does not comply with KYC / AML standards, which is why it attracts various scammers.
Functionality and features
The site is adapted for the Russian, English and Chinese versions. The main feature of the YoBit platform is access to trading about 500 instruments in total. The trade commission is about 0.2%.
The creators of the platform introduced a widget with games, a victory which allows you to double the initial amount of the bet or lose everything, which emphasizes the focus on gambling customers.
In addition to trading on the exchange, there are two possibilities:
Invest Box - exchange deposit system. It involves obtaining a percentage of the invested cryptocurrency in the storage of Yobit.
FreeCoins - the opportunity to get a few different coins for free, provided 20 transactions daily.
In general, the platform has all the necessary widgets for working on the sale and exchange of cryptocurrencies.
General conclusions about the work of the Yobit exchange
Despite a rather dubious reputation, the Yobit cryptocurrency exchange has some advantages, which include:
- Pretty nice and intuitive interface;
- Large selection of markets and wide functionality;
- A very large number of cryptocurrency pairs for trading;
- The presence of Russian-language chat for customers.
However, all these advantages do not outweigh the following disadvantages, which are noted by the world community and most traders. These include:
- Support service ignoring many requests from its customers;
- The absence of any evidence of the legal and legal status of the organization;
- Long delays in the withdrawal and deposit of funds;
- High withdrawal fees.
Most users note the unstable operation of the YoBit cryptocurrency platform. Often there is a blocking of users without any confirmation and explanation of the reason. In general, the entire cryptocurrency exchange does not deserve any trust.
Conclusion on the result of comparative analysis
Trusting the YoBit and Binance platforms is not recommended due to the violation of user safety rules and frequent technical failures on the part of exchanges. The best option is the Coin Market Solution tokenized assets exchange. It meets all security standards and allows you to effectively trade cryptocurrency and progressive tokenized assets.
Ariel Laur from New York on July 07, 2020:
Very informative and useful article. Thank you for writing in layman's terms, well done!
Logan Cobb on June 03, 2020:
I traded on all three cryptocurrency exchanges from this list. Last year, I preferred Coin Market Solution. The first reason is the most minimal commission: 2.5% when depositing / withdrawing to a bank card and 0% when depositing / withdrawing through a cryptocurrency wallet. I was also attracted by the opportunity to make risk-free transactions.
Myron Higgins (author) from Philadelphia on April 28, 2020:
Thank. I tried to make the most objective review of popular cryptocurrency platforms.
Ghazali Abdullah from Malaysia on April 28, 2020: