Chances are you have heard of the highly popular Poloniex trading exchange. But how do you know if it is the right choice for you? Rest assured, I will give you a full review of Poloniex on everything you need to know!
To begin with I will give you some background information about what Poloniex is and where it is located. Then comes a complete list of advantages and disadvantages, along with an explanation of the fee schedule. I will also answer one of the most important questions: “Is Poloniex safe?
Finally, I will also give you a step-by-step guide to setting up your account and using Poloniex, with some really helpful pictures!
Well, why are you still waiting? Jump directly to the Poloniex review to learn all about it.
Targeting better liquidity and lower spreads, Poloniex decided to use a volume-tiered, maker – taker fee schedule. It means that maker – taker system supports higher market liquidity by providing the makers with a fee rebates. So, as the makers compete for fee rebates they need to outbid each other resulting in lower spreads. The higher fee that the taker pays is usually offset by the better prices this tighter spread provides.
There are many advantages of using Poloniex: it was world’s largest Ethereum exchange in 2017; it supports new coins; it has data analysis tools and charts; it is open source; enables margin trading; supports over 70 digital assets; low fees; refunded affected users after a security incident, etc.
We will cover these in more details.
Who is behind Poloniex?
There is very scarce information on the identities of managers, owners and investors behind Poloniex trading platform. Additionally and more worrying, the lack of company’s physical office.
The only name that can be found on their official web site is of Tristan D’Agosta, and it says he is the founder of Poloniex. D’Agosta is a music composer and a former freelance writer with a Bachelor of Arts in music from Rutgers University. Tristan posted an open letter to the users of Poloniex. In his letter he wrote about the changes in Poloniex and the new rules on withdrawals defined by the Financial Crimes Enforcement Network (FinCEN).
Starting on May 21, 2015, Poloniex will require your name and country for all withdrawals. To withdraw more than $2,000.00 USD equivalent within 24 hours, you will have to provide your address and phone number. It is only if you need to withdraw more than $7,000.00 USD equivalent in a 24-hour period that Poloniex will require identity verification such as your social security number or photo ID. He stated that Poloniex is taking these measures to protect them and you from potential criminal activity that could force a shutdown of their services.
There were hundreds of user complaints in 2017 and as well as in January 2018. Many users claiming that the Support Center is very slow or even none existing for some. The users are complaining that they did not receive any kind of response from Support Center for days and even months.
Here are some of the complaints from users that can be found on cryptocompare.com:
“Absolutely bad support. No communication for the whole month, no answer for tickets. The customer is in zero place.”
“I have made a Transection to withdraw my Sia Coin on 13/01/2018. But it was not completed showing the error (Complete:Error). Created a ticket on the same day but now no reponse from Poloniex Support Centre. Its arround 24 days very bad and unresponsive customer support. I will not suggest any one to trade on this exchange. There are very high chances to loose your hard earned money. Be carefull”
“Unfortunately after reading all these reviews I won’t be using this Exchange. Hopefully the customer service will change very soon. I’ll check bk”
One Poloniex user has reported waiting more than 5 months for an order to completely process, in spite of numerous attempts to reach the Poloniex customer service team in order to address the issue. In some cases, customer patience may be worn quite thin as a result of the expectation of a fast-moving and seemless transaction process in the cryptocurrency space. On the other hand, highly publicized stories of some cryptocurrency exchanges collapsing or mysteriously losing large quantities of money may put Poloniex users on edge as well.
In June 2017, Poloniex announced that they are hiring people for their support team: „Increased enthusiasm for trading blockchain tokens on the Poloniex platform has led to increased stress on our systems. Heightened activity and new users mean more support tickets and man-hours spent resolving them. Thus, to meet this demand, we have more than doubled the size of our support team and will continue to focus our efforts toward improving user experience. Hiring quality support staff is neither easy nor quick, especially in our line of business. Training must cover the technical and regulatory complexity of a rapidly evolving industry and community. We must also ensure the security of our system and operations at every level. This requires thorough and proper vetting of new staff.“
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In March 2014, the company completed its Bitcoin reimbursements to all customers affected by the hacking incident. When the theft was discovered, Poloniex owner, Tristan D’Agosta, took full responsibility by vowing to pay back the 97 Bitcoins to his customers before taking any profits himself. It was reported that the debt has been paid back to all affected victims.
Since then, Poloniex has implemented stricter auditing and security measures to combat future exploits. “Since the hack, we implemented continual automatic auditing of the entire exchange, bolstered the security of all servers, and redesigned the way commands are processed so that an exploit like the one used in March is impossible,” D’Agosta added. “Security is a top priority at Poloniex. We are committed to continually improving our product to ensure the highest level of protection for our customers.”
In the summer of 2017, for instance, a rumor circulated among users that Poloniex was experiencing insolvency. The source of the rumors was difficult to track, but Coin Telegraph reported that at least one user experienced a significant personal financial loss as a result of hacking, and the user reportedly did not receive prompt assistance from the Poloniex support department.
“Poloniex exchange is not secure. I was stolen at 1500 USD per hacker who logged into my account with 2FA, which he registered . Poloniex puts the blame on me. Flee to Bitfinex, which is more serious company. Fernando. (55-11-947978218 – Brazil)”
As in case of user complaints of slow customer support, you can also read a lot about problems with withdrawals of funds.
“i transfer 13k sia coin to poloniex 2 weeks ago and i still havent got it they are bunch of criminals.”
“I deposit some XEM in poloniex, it past 5 days, and it is not there. Support center didn`t responde. I tried many exchanges, but poloniex is the worst place to put money in. Be careful.”
“Hello I made the withdraw of 3700 ZRX but the amount of ZRX did not arrive ! It’s been 20 days and nobody answers. The transaction appears to be ‘Complete’ in my History ! Also, I’ve checked the transaction id and couldn’t find the transaction ! Nobody answers”
“Funny how i deposit on them in no time and now i am more than two week waiting for withdrawing XMR. Support tickets are not answered and from what i have read they normally answer after a couple of months. The service is unacceptable. Stay away from these guys they don’t know how to treat a customers. I will never come back to poloniex again.”
You can find many more users’ complaints on cryptocompare.com.
These issues may be temporary or a sign of even greater trouble to come. It is impossible to tell at this point.
The most significant change can be seen in Section 16 „Electronic Trading Terms“ which states: „By using the Services, you acknowledge and agree (i) that Poloniex is not responsible for operation of the underlying software and networks that support Tokens and that Poloniex makes no guarantee of functionality, security, or availability of such software and networks; and (ii) that the underlying protocols are subject to sudden changes in operating rules (a/k/a “Forks”), and that such Forks may materially affect the value, function, and/or even the name of the Tokens you store in your Account.“.
This supposedly gives Poloniex legal basis for choosing not to distribute Bitcoin Cash to holders of Bitcoin on the exchange. This change came just before the Bitcoin Cash fork. Some users’ interpretation was that this change will allow Poloniex could keep all Bitcoin Cash created from the fork, potentially selling it themselves. As Bitcoin Cash is currently worth hundreds of dollars, this would represent a significant source of profit for Poloniex.
But Poloniex was quick enough and made an announcement regarding Bitcoin Cash and giving some comfort to the users: „We’ve received several inquiries about Bitcoin Cash (BCH) since the fork on 8/1/2017. Our hesitation to immediately support BCH or any other Bitcoin (BTC) derivative was and is born out of the desire to ensure the security of network operations and the safety of our users’ tokens.
We will be crediting users who had BTC in their account balance at the time of the fork with matching BCH. We expect this to occur on or before 8/14/17. Keep in mind that we have not yet determined if we will be listing BCH as a market on Poloniex nor can we commit to supporting BCH withdrawals right away. The ability to withdraw BCH will depend on network stability which is completely outside of our control.“
Basics to get you started trading
We pointed out several issues about using Poloniex trading platform, but there are still users who grade Poloniex with 5 stars. Even with these existing doubts, however, Poloniex has continued to grow in terms of its user base, transaction volumes and the number of cryptos it supports. Poloniex provides a lot of alternative coins for trading.
Before you start trading on Poloniex, it is highly recommended that you activate 2FA (two factor authentication). By enabling two-factor authentication (2FA), you have 2 layers of protection. This enhances your account security and keeps your account protected from hackers.
Two-factor authentication (also known as 2FA or 2-Step Verification) is a technology that provides identification of users through the combination of two different components. With Two-Factor Authentication on Poloniex, you’ll protect your account with something you know (your password) and something you have (your phone).
Poloniex is a crypto only exchange; they do not accept deposits in fiat currencies such as US Dollars, Euro, and Yen.
You can deposit coins into your Poloniex account using the desktop or the mobile site. Open your desktop or mobile wallet to enter the deposit address. You can use the QR scanner from your device (where you have your wallet) [OR] copy and paste the address. It takes several minutes for a transaction to be complete as several confirmations are required. Depending on network congestion, it can take 30 minutes or up to an hour. You may look at ‘Deposit History’ to view the progress of a transaction. Account balance gets updated once the deposit is complete.
All you need to do is select a trading pair and place an order to Buy or Sell coins based on the selected pair.
The markets are divided into tabs and several coins are listed under each tab with the latest prices quoted. By picking a coin listed on a specific tab, you select a trading pair to buy or sell. In the example shown below, the trading pair selected is ETH/ BTC where a user can buy or sell ETH in exchange for BTC. You can trade on either a desktop or a mobile device.
Withdrawing your funds
You can withdraw coins from your account via the desktop or the mobile site using the ‘Withdraw’ option.
Open your desktop or mobile wallet to generate the deposit address. Copy and paste the correct address. Enter amount of coins you want to withdraw. It takes several minutes for a transaction to be complete as several confirmations are required. Depending on network congestion, it can take 30 minutes or up to an hour. Finally, a user confirmation is needed to complete the step. Users with two-factor authentication do not receive email confirmations.
Poloniex is definitely legitimate trading platform and it has been around for quite some time. However, it’s never a good idea to have loads of coins on a single exchange. Bear in mind that each and every exchange and other websites specialized in cryptocurrencies have positive as well as negative reviews.
No matter what exchange you use, you still have a risk using it. You need to trust the exchange not to run away with your funds (yes, this happened in the past). Poloniex is an exchange with highest volume and it is known for a single security breach in the past but they successfully returned the funds to its owners. They tend to have “DDoS” attacks sometimes and that can disable your option to cancel your buy/sell orders so somebody else can fill them.
Bitstamp is one of the oldest cryptocurrency exchanges. Read our Bitstamp review here.
HitBTC is one of the largest cryptocurrency exchanges. Read our HitBTC review here.
Cryptopia is a small exchange that is known for being the place less known coins with smaller caps come out first. Here is our review of Cryptopia.
You can choose the best coin exchange by reading this article. Read here how you can quickly convert other coins to bitcoin and the other way around.
Our recommendation is always check if Coinbase is available for your country and buy there – as it is by far the safest and best regulated bitcoin exchange. Coinbase is trustworthy and has acceptable fees and it is a leading platform for buying BTC.
If Coinbase doesn’t support your country, use Cex.io – read how Cex.io works – it is a good Coinbase alternative. Coinmama is also safe exchange for buying cryptocurrencies – click here to visit Coinmama.
If your country is not available on Coinbase – check for best Coinbase alternatives (such as Cexio and Indacoin – see here Indacoin exchange review) and buy BTC on one of those exchanges. You can always exchange your coins on Changelly (see if Changelly is legit place to trade crypto), instantly and directly to bitcoin.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com