Kraken is one of the biggest exchanges in the world and is the world’s largest Bitcoin (BTC) exchange in Euro volume and liquidity. Jesse Powell is the founder and CEO of Kraken. Powell decided to create the Kraken exchange after seeing how poorly Mount Gox was run, a move which in hindsight proved to be an excellent decision.
It was launched in September 2013 after two years of beta testing. It initially offered trading between Bitcoin (BTC), Litecoin (LTC) and Euro. Currently, the Kraken exchange is most known for its Bitcoin (BTC) and Ethereum (ETC) to cash (EUR and USD) markets.
In September 2013 Kraken was the first exchange to switch to the ISO 4217 standard currency code for Bitcoin. In October 2014 Kraken formed a partnership with Fidor bank which facilitated SEPA payments for depositing and withdrawing from Kraken accounts.
Kraken was one of few exchanges immune to something called “transaction malleability,” which many bitcoin exchanges suffered from between 2014 and 2015. Kraken is one of the largest Bitcoin exchanges and is considered the largest Bitcoin exchange based on the Euro volume, liquidity, and the trading of Canadian dollars, Japanese Yen, US dollars and Pounds Sterling.
In terms of website traffic Kraken loses only to Coinbase, and experiences the highest mobile phone usage. As of July 2017, the exchange had over 20 million monthly visits and 60% of users are from Europe.
These figures change rapidly given the influx of new users into the cryptocurrency industry and the exchange battle is quite competitive. It should be kept in mind that many exchanges claim to be the biggest, and what happens is that they may be the biggest in terms of trading volume for a week or month and make the claim which is only true for a particular time period.
Kraken is certainly one of the more well-known exchanges. One of the advantages of Kraken is that the verification process is quite straightforward, though it can be a little strict for higher tier verifications.
Tier 3 verification takes about two days to complete, which is quite impressive by cryptocurrency standards. A valid government ID and recent proof of residence are required.
One of the biggest advantages of Kraken is that it has some of the lowest fees on the market right now, aside from the two new game changers, Binance and Kucoin. Withdrawal fees for both cryptocurrencies and fiat are negligible.
Kraken does not charge fees for the majority of deposit methods, though it does charge a 5 Euro fee for deposits in European countries. Aside from Ripple all cryptocurrency deposits are free.
Kraken easily outdoes the competition in terms of the fiat currencies available on its exchange. Most exchanges only offer USD, EUR and possibly JPY. The British Pound and Canadian Dollar are extra.
Kraken has a moderate amount of cryptocurrency trading pairs compared to other exchanges, a total of 15. The fees on trades are very low, around .26%.
Another neat feature with Kraken is margin trading, which is reserved for the more adventurous cryptocurrency traders. But the Kraken trading exchange features leave much to be desired.
All advanced order types such as Stop Loss and Stop Limit appear to have been disabled in late 2017. And it also takes weeks to get any type of answer from Kraken due to their overloaded support team.
The security of Kraken is quite high. They offer 2 Factor Authentication (2FA) as well as PGP encryption on messages. This is becoming industry standard given how often cryptocurrency exchanges get hacked.
Jesse Powell recently stated that it is up to individual cryptocurrency investors to manage their own accounts and perform their own due diligence. This is not exactly what investors want to hear from the CEO of the company holding their funds.
In 2016 and 2017 many Kraken users had their accounts emptied, and many are of the opinion that Krakens 2FA implementation is not as robust as it should be, using a static 2FA login password which is quite vulnerable. This static 2FA should not be an option as it is not secure.
Of course, there is a strong counter-argument that this is user error as there are more secure options available. The 2FA issue aside, Coinbase is the only exchange where your funds may be safer than Kraken.
Kraken was the first cryptocurrency exchange to create a cryptographically verified proof of reserves. The majority of funds are kept in cold storage in secure facilities. Think armed guards and retina scanners along with video surveillance.
Cold storage cryptocurrency is the Fort Knox of the future. Data is encrypted where possible and replicated in real time.
But remember that Kraken does hold private keys to public addresses, like all other large custodial exchanges. In other words, you have to trust them to keep your cryptocurrencies safe, and cryptocurrencies are supposed to eliminate reliance on third parties. We appear to have gone full circle in many ways.
One of the drawbacks of Kraken is that the site is not beginner friendly and can be somewhat confusing. It can also be subject to buggy orders now and again which can render it frustrating to use.
Kraken might have been one of the best exchanges, but has fallen sharply in the past year or so. Since around August 2017 accounts appear to have been locked for no reason and the customer service team has practically disappeared.
Accounts that are suspected of fraud are closed and there is little in the way of a fair trial. In January 2018 the site exchange went down for three days.
As a website and service, in general, it is incredibly slow. Many new users seem to be getting a 502 error code and it is obvious that the whole system is overloaded. With no way to contact the customer support team, this issue is increasingly difficult for users.
The website is going through an upgrade which is compounding the problem. Kraken is not what it used to be, and this shows in the rankings, though it may make another appearance in the future. But if you really want to avail of low fees then Kraken is still the best, as well as one of the most secure.
Aside from the technical issues they are currently going through, they are reliable. But it is best to avoid this platform for now until they get their various problems resolved.