What to look for in a Coinbase Alternative?
So, if you are going to look for an alternative to Coinbase, then what are the qualities that you will be looking for? Let’s go through them one-by-one.
Finally, please make sure that you are opting for an exchange which is available in your country. You don’t want to sign up for something and go through a tedious KYC process only to find out later that you can’t trade there. The issue of a crypto exchange’s legality is a dicey one and may even vary state-to-state. Please do your research beforehand
Coinbase Alternatives #1: Coinmama
Coinmama has been operating from Israel since 2013 and is originally a venture of NBV internationally registered in Slovakia. It allows investors to buy popular coins such as BTC, ETH, BCH, ADA, LTC, etc. It hosts around 1.5 million users around the world and operates in 190 countries. While prices are shown in USD and EUR, you can buy coins using any currency via credit cards. In fact, they recently added an option to sell Bitcoin for Customers in the 37 European countries that are part of SEPA (Single Euro Payments Area).
However, when it comes to buying, the number of coins available is a little limited. They only offer Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Qtum, Ripple, Ethereum Classic and Cardano. Having said that, the company did say that they are looking into adding more cryptos to their list.
Unlike other exchanges, Coinmama doesn’t have an in-built BTC, ETH, LTC, BCH, ETC, XRP, QTUM, ADA wallet. If you want to trade in the exchange, then you must have your own wallet for each of the available cryptocurrencies. This could be perceived as both a good thing and a bad thing. While it encourages users to make their own wallet, which is a lot more secure, it is not the most convenient option.
The actual amount of crypto that a user can purchase is solely dependent on the level that they have reached with the platform. The more documentation the user provides about their identity, the more the currency that they will be entitled to purchase. However, do keep in mind that the predefined daily and monthly limits are applicable regardless of what level the users have reached. The levels are as follows:
Coinmama is registered with the Financial Crimes Enforcement Network (FINCEN) in the U.S. This brings in an extra layer of security and credibility into their operations.
Coinmama is a buy-only exchange. So, while you will be able to buy cryptos, you won’t be able to sell and trade them.
The range of coins that you can actually buy from the exchange is pretty limited.
While easy purchase through credit card is extremely appreciated, the flipside is that the fees charged are pretty exorbitant. To use your card, you will have to pay an extra 5% fee on top of the rate that Coinmama charges. However, keep in mind that no matter what exchange you use, buying via credit card will always inflict extra charge.
Speaking of fees, Coinmama also charges an average fee of 5.5% for every transaction you make. The exact fee is dependent on the number of coins you want to buy.
Coinbase Alternatives #2: LocalBitcoins
LocalBitcoin (LBC) is an exchange based out of Helsinki, Finland and has been operational since 2012. The thing that makes LBC unique is the fact that unlike Coinbase and Coinmama, it is not centralized. In fact, it is a P2P Bitcoin exchange. LBC has Bitcoin buyers and sellers in more than 15,000 cities around the world. Traders can trade between themselves by paying in cash or sending money via wire transfer or PayPal or SEPA or direct bank deposit or anything that the seller wants. Registration in the exchange only requires you to use your email ID. However, if you verify your identity, then you will be raising your trust between traders.
You may be a bit wary of LocalBitcoin’s security and credibility since it is a peer-to-peer system. However, they are taking plenty of security measures which should put your mind at rest.
LBC uses 2-factor authentication or 2FA to add extra security. This is a handy addition which will help prevent account hacks. This feature is not activated by default. It has to be done by the user.
LBC will keep a record of the IP address of the computer which was used for account creation. The exchange will also keep a record of the browser which is constantly used for logging into the account. If the user uses a new IP address (say they move to a new location), then a verification process is done via email to confirm identity.
LBC does a rigid KYC protocol to help weed out scammers.
All the transaction done between the parties uses LBC as an escrow to store the funds. The funds are only released when the transaction has been confirmed to be complete.
The free structure is pretty fair. The exchange charges zero fees for Bitcoin transactions.
The security measures are pretty robust and strict.
The exchange has a map that co-locates sellers with buyers in their region. The is ensures high liquidity of funds.
The exchange still doesn’t accept clients from the U.S. because of regulatory reasons.
The customer support is a little slow.
The exchange also doesn’t have a hard wallet system. As such, the users are responsible for protecting their own crypto.
Coinbase Alternatives #3: Kraken
Kraken was founded by CEO Jesse Powell back in July 2011 and officially launched to the public on September 2013. While they are based out of San Francisco, USA, they still have one of the largest Euro-to-crypto markets in the world. Kraken is available to residents of US, Canada, Japan, and various European nations. It also allows you to deal with multiple fiat currencies like the US Dollar, the Canadian Dollar, the Euro, the British Pound, and the Japanese Yen. Kraken does not currently accept deposits via credit cards, debit cards, PayPal, or similar services.
Alright, so what all cryptos are available for trade here?
Apart from Bitcoin, they also provide trading of Ethereum (ETH), Monero (XMR), Dash (DASH), Litecoin (LTC), Ripple (XRP), Stellar/Lumens (XLM), Ethereum Classic (ETC), Augur REP tokens (REP), ICONOMI (ICN), Melon (MLN), Zcash (ZEC), Dogecoin (XDG), Tether (USDT), Gnosis (GNO), and EOS (EOS).
In 2014, Kraken became the number one exchange in the world when it comes to Euro trade volume. They also pioneered the first verifiable cryptographic proof of reserves audit system and was also listed on the Bloomberg Terminal within the same year.
Kraken Security Against Hacks
Kraken has enjoyed a very healthy reputation in the market due to its resiliency to major hacks. In fact, to show how secure it is, Kraken was chosen as the platform by which creditors of the Mt. Gox exchange could receive their claims. Following Mt. Gox’s filing for bankruptcy protection, the admin team chose Kraken as a partner to help creditors receive their payouts. Along with this, consider the following factors: