The Kraken exchange is one of the oldest and most popular cryptocurrency exchanges. It was created back in 2011 by Jesse Powell, one of the first bitcoin enthusiasts. Kraken is one of the few major exchanges that have a great reputation for security.
After reading this article, you will learn how the platform works, how to trade on this exchange, how to deposit and withdraw funds, how much the commission is, and what additional features the trading platform has.
Kraken history
The American exchange Kraken appeared on the cryptocurrency market in 2011. The exchange is headquartered in California, San Francisco.
The founder and CEO are Jesse Powell, who recognized the importance of Bitcoin and Blockchain since the inception of the cryptocurrency ecosystem and saw great potential and opportunity for achieving financial independence in it. He saw the point in developing what Satoshi Nakamoto invented in 2009 and creating new and effective solutions that marked the beginning of a new digital economy.
In the early years, the exchange was in the shadow of competitors, but from mid-2014, its popularity began to grow. It is largely due to the bankruptcy of the MtGox exchange, which at that time had an impact on the balance of power in the market. Many traders and investors who previously worked with MtGox switched to Kraken, which offered favorable trading conditions.
Initially, only Euros, Bitcoins, and Litecoins were listed. Gradually, the list of assets expanded; other fiat money and digital currencies were added, and trading volumes increased. In 2014, the Kraken exchange became the world’s largest platform in terms of EUR / BTC trading volume.
Positive aspects of the Kraken exchange
The popular Kraken exchange has several advantages, which include:
- Impeccable reputation
Kraken has earned user trust by maintaining the highest level of data protection. Since its inception, the name of the exchange has never appeared in any scandals related to the theft or hacking of users.
- A carefully selected list of cryptocurrencies
One of the initial stages of working with any exchange is the choice of the currency you will trade. At the moment, there are about 300 different types of cryptocurrencies, and a beginner at this stage needs to make the right choice. From this point of view, the Kraken site is ideal for new traders, since only proven coins are on their trading list. The list of cryptocurrencies available for trading is updated, but only after the new currency gains worldwide recognition. Over the past year, Kraken has expanded the list with such coins as Augur (REP), Iconomi (ICN), Zcash (ZEC), Monero (MXR), and, of course, Bitcoin Cash.
- Availability of margin trading
It is an important point for those who care about getting the maximum profit from transactions. The main thing is not to forget about the risks and take a balanced approach to transactions using leverage.
- The Dark Pools option
The previous year, the network exploded by the news that Kraken had launched Ethereum trading through the so-called Dark Pools. The introduction of this innovation allowed traders to make large trades anonymously without disclosing the details of the completed transaction to other participants. The transaction amount and currency remain encrypted. The main advantage of using trading through dark pools is the reduced impact on the market when making transactions with large amounts. Today Kraken is the first and only exchange on the market to provide such a service.
- High level of security
The Kraken platform uses two-factor authentication (2FA) to ensure maximum protection of user data. It also allows you to connect a Master Key or PGP Key for additional protection of your transactions.
- Taking care of users
Cryptocurrency exchange Kraken is one of those that try to provide its users with only the best service. This approach significantly increases the level of loyalty of existing users and also attracts new ones. For example, for the convenience of users, a special application for smartphones was developed and launched. With the help of it, traders can monitor statistics and make trades at any time and anywhere.
Disadvantages of the Kraken exchange
Here are some of the disadvantages you need to be aware of before getting started with Kraken:
- Commission size
When choosing an exchange, the size of the exchange commission is one of the most important points, since your daily earnings on the exchange will depend on the commission. The fees for deposits and withdrawals on Kraken are slightly higher than on alternative exchanges. Remember to take this fact into account.
- Verification
Be sure to keep in mind that registering with Kraken is not enough to start trading or fund your deposit. The verification process on Kraken consists of a few levels, and to fully work with the service, you need to go through at least one of them. Users are given limited access without verification – they can only view charts and transaction history.
Personal Account
The exchange interface is available in 14 languages: American and British English, French, Spanish, Italian, Portuguese, Filipino, Russian, Ukrainian, Turkish, Japanese, Korean, Chinese, and Vietnamese. Therefore, the Kraken exchange is used by traders from all over the world. They work with the exchange in their native language, which greatly simplifies the exchange and trade process.
There are three types of accounts on the Kraken exchange: starter, intermediate, and pro.
Starter:
- unlimited deposit;
- deposits and withdrawals in cryptocurrency (fiat is not available);
- buying, selling, and exchanging cryptocurrency;
- margin trading.
Intermediate:
- unlimited deposit;
- deposit and withdrawal in fiat and cryptocurrency;
- buying, selling, and exchanging cryptocurrency and fiat money;
- margin trading,
- high transfer limits;
- trading crypto futures.
Pro:
- unlimited deposit;
- deposit and withdrawal in fiat and cryptocurrency;
- buying, selling, and exchanging cryptocurrency and fiat money;
- margin trading,
- high transfer limits;
- trading in crypto futures;
- individual transfer limits;
- increased margin limits;
- High API limits;
- trading on the OTC desk.
Registration on the official Kraken website
Instructions on how to create a new account on the official Kraken website:
- Go to the official website of the crypto exchange;
- Choose to create an account in the upper right corner or click on the Get started button;
- In the registration form, enter your email address, username, and a strong password. Password must contain at least 8 symbols, at least one letter, one number, and one special character;
- Indicate your current location;
- Accept the Terms of Service and Privacy Policy by reading both documents;
- Click on the button Create an account;
- Next, you will need to enter the activation code received to the email address specified during registration. Enter the received code manually or follow the link in the letter;
- Go through a simple captcha I am not a robot and click Activate account;
- Your Kraken account is activated, you can enter your account and proceed with the settings.
In the future, to enter the system, click Sign in on the main page, and enter your username and password. To leave your account, you need to click Sign out.
Verification of Kraken account
To start trading cryptocurrency, you need to go through a verification process, which involves confirming your identity and providing the necessary documents.
The developers have a well-thought-out verification process and divided it into several levels. Thus, each user decides how much of his/her personal data he/she is willing to provide – and gets an appropriate number of opportunities. There are 4 levels in total.
Tier 1
To assign this level, you must indicate your full name, date of birth, telephone number, and country of residence. The first level makes it possible to replenish the account with no limits and withdraw the cryptocurrency in equivalents – daily up to $ 2,500 and monthly for $ 20,000.
Tier 2
To get level 2, you need to enter registration information. The second level allows you to operate with fiat currency – every day for up to $ 2,000 and up to $ 10,000 a month. For crypto coins, the limit will grow to $ 5,000 and $ 50,000.
Tier 3
To obtain the third level, it is necessary to send scanned copies of documents (passport or id card), and proof of residence. The third level is where margin trading becomes available. Limits are increased for cryptocurrencies to $ 5,000 (daily) and $ 200,000 (monthly), and for fiat money to $ 2,500 and $ 20,000.
Tier 4
The last, fourth level of verification is provided for holders of large capital and clients who decide to open a corporate account. To obtain this level, you need notarized copies of certificates and documents of an existing business or certified certificates confirming income. Also, here a personal agreement is drawn up with the administration of the Kraken exchange. Limits on cryptocurrency and fiat money are reaching the ceiling – the equivalent of $ 100,000 daily and $ 500,000 monthly.
Kraken’s reputation and safety
Kraken exchange was able to gain credibility in the crypto industry. Kraken conducts regular internal audits and strives to demonstrate transparency even in the face of unfair competition. For example, a large number of less reputable exchanges are wash trading to artificially increase their trading volumes. The latest report from the Blockchain Transparency Institute showed that there were no signs of wash trading on Kraken, and the exchange (along with Coinbase) provides the most accurate trading data.
However, despite the high reputation of Kraken, there are many negative comments about the platform’s work on the Internet. Most of the complaints mention verification problems and slow support. Also, in 2017, the exchange experienced failures more than once against the background of record trading volumes.
However, when it comes to security, few can compete with Kraken. Today Kraken is one of the few major cryptocurrency exchanges that has never been hacked.
To achieve the highest possible level of security, Kraken stores most of the users’ funds in cold wallets geographically distributed across several countries. Kraken servers are monitored 24/7 and protected by armed guards, and a team of cybersecurity experts regularly checks for potential vulnerabilities.
Kraken offers many additional options for account protection. These include optional two-factor authentication as well as account settings lockout.
Two-factor authentication
User account security is a priority for the Kraken exchange. Therefore, immediately after registration, the system prompts a new user to go through to connect additional protection for their account through two-factor authentication.
Kraken Exchange offers the following 2FA methods:
- Static password. Low-security level because the password remains the same every time.
- Authenticator App. A mobile application that generates a one-time 6-8 digit dynamic password.
- Yubikey. Authentication devices that issue one-time passwords when pressed or touched. It helps prevent remote access.
How to deposit money into your account
Before you can buy or exchange cryptocurrencies on the platform, you need to deposit funds into your Kraken account.
You can replenish the balance on the exchange in cryptocurrency or fiat currencies:
- USD;
- EUR;
- CAD;
- GBP;
- JPY.
Important information about depositing in fiat:
- All methods, except for personal CAD, include some form of wire transfer (no credit card required);
- The names on your bank account and your Kraken account must match;
- The system does not accept deposits from some third-party payment systems (TPPPs);
- The deposit commission depends on the method and currency of the deposit;
- Deposit limits depend on the level of account verification.
As for cryptocurrency, for security reasons, a certain number of confirmations are required in the blockchain before funds are credited to the account. When the transaction is broadcast to the network, you need to wait for the miners to include it in the block, and the transaction will receive one confirmation. The more confirmations received, the more permanent the transaction is.
Each block is at a different speed depending on the blockchain. For example, in the Bitcoin blockchain, a block is mined every 10 minutes on average. Kraken only credits Bitcoin deposits after 6 confirmations. Thus, it will take about 60 minutes to transfer bitcoins to the exchange balance.
After confirming the verification, you can enter any of the supported digital or fiat assets by following these steps:
- In your account, select the Funding tab;
- Select the currency of replenishment;
- In the same line, click on the Deposit;
- In a new window, we get the address of the wallet for transferring cryptocurrency or bank details for fiat money;
- When you first deposit in cryptocurrency, you must select Generate a new address and wait until the new deposit address is available;
- After checking the correctness of the data, transfer cryptocurrency or fiat, taking into account the minimum amount of the deposit;
- After the required number of confirmations, the currency will be credited to the exchange account.
How to withdraw money
You can withdraw money from the Kraken account to any external account or wallet in two ways: in cryptocurrency or fiat money. To do this, follow these steps:
- Select the Funding tab in your account;
- Select the currency for withdrawal;
- And on the same line, click on Withdraw;
- Next to the address field, select a previously added address or click on the add address button to add and confirm a new one;
- In the amount field, indicate the amount you want to withdraw, making sure that it is more than the minimum amount;
- Check the correctness of all information and click on Confirm withdrawal;
- After that, you will receive an email notifying you that the withdrawal request has been created.
All withdrawal options include some form of bank transfer. You cannot withdraw cash or withdraw funds to a credit card or third-party payment system.
How to trade the Kraken
You can go to trading immediately after receiving the first level verification. Trading takes place on the Trade page. In addition to trading with personal funds, the opportunity to use borrowed funds is also available. For this, support for leveraged transactions has been introduced. It should also be noted that the charts on the exchange are not very detailed and may seem unusual for most novice traders. However, this does not make the interface complicated, and it will suit everyone, regardless of the experience of trading on the exchange.
If you trade with your funds, then you need to open a trade of the Trade Position type. Then your currency is simply exchanged for the one you buy. The identifier of such transactions will always begin with the letter T. If you want to open such a deal in leverage, then choose None.
Leveraged trades work the same way as in Forex. You don’t need to have cryptocurrency to sell. All that is required is simply to select a trading pair. When you open order in leverage, you need to specify the leverage size.
Commissions
The first step with any trading platform is to top up your balance. There are no commissions for depositing money to the Kraken. But when withdrawing funds, the commission rate depends on the withdrawal currency.
Trading commissions on the Kraken exchange directly depend on the volume. The more you trade, the lower the commission on subsequent buy and sell trades will be.
Kraken trading commissions range from 0% to 0.26%. They depend on the total volume of transactions, which provides the best liquidity.
Trading volume
Kraken has been among the top cryptocurrencies in terms of trading volume for a long time. The daily volume exceeds a quarter of a million dollars, and the following are the most popular trading pairs:
- BTC / USD;
- BTC / EUR;
- ETH / USD;
- ETH / EUR;
- LTC / USD;
- LTC / EUR.
Conclusion
It can be concluded that the Kraken is a good and reliable tool for trading cryptocurrencies, which has been showing good results for many years. The platform offers interesting solutions that not all competitors can boast of. It will be an excellent option when choosing a trading platform.
