You certainly cannot afford to pass up crypto opportunities in 2021, especially when you realize Bitcoin has already been reaching some new heights! But where do you start? Well, you obviously need to find yourself trading options in the form of an ideal crypto exchange that suits your needs. There are now literally hundreds of crypto exchanges out there, and all of them have their unique set of pros and cons. For example, now we have exchange platforms such as Binance, Gemini, Bittrex, and Zcash. Then, there is PayPal making inroads into blockchain-based cryptocurrency trading, which is taking crypto adoption to a whole new level. So, at the end of the day, which crypto exchange should you choose?
We have pitted two crypto exchange giants head-to-head: Yes, we are talking about Kraken and Coinbase. We have also taken a deep dive into each side’s pros and cons and have compared them side by side. It will only help you choose the right crypto exchange. So, bear with us.
Kraken vs Coinbase: Key differences
There is hardly any doubt both Coinbase and Kraken are among the major crypto exchange platforms currently available for you to trade your Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and altcoins. Much like other crypto exchanges out there, these two aren’t exceptions to some fundamental differences either. Plus, we are only here to discuss things that set Kraken and Coinbase apart and which one you should choose, especially in 2021. Let’s start by focusing on some of the core differences between Kraken and Coinbase, shall we?
- Coinbase has more users.
- Kraken has lower fees.
- Coinbase offers a built-in wallet.
- Kraken offers more advanced features.
- Coinbase is more user-friendly.
- Coinbase is more beginner-friendly.
Both Kraken and Coinbase are among the oldest cryptocurrency exchanges, and there is hardly any doubt both are equally credible. Let’s see how these platforms kicked off their operations and emerged as among the top crypto exchanges over the years.
Coinbase is one of the oldest crypto trading platforms headquartered in San Francisco, California, United States. Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase has traded more than $220 billion worth of crypto assets across more than 100 countries worldwide. It offers a non-custodial wallet where the private keys are stored directly on your device, providing you with total control over your funds. One of the co-founders, Brian Armstrong, leads Coinbase as its chief executive officer (CEO).
A brief history of Coinbase
- June 2012: Brian Armstrong and Fred Ehrsam founded Coinbase.
- October 2012: Allowed buying and selling bitcoins through bank transfers.
- January 2015: Introduced Coinbase Exchange.
- May 2016: Renamed Coinbase Exchange to GDAX.
- July 2016: Added retail support for Ether.
- December 2017: Listed Bitcoin Cash.
- April 2018: Announced Coinbase Ventures.
- October 2020: Announced Visa debit card program.
Founded in 2011 by Jesse Powell, Kraken predates Coinbase. Kraken is also based out of San Francisco, California, United States. And guess what? It also provides traders with an option to trade cryptocurrency to fiat. Kraken services are available in more than 175 countries worldwide, including the United States of America. The platform has made about 40 cryptocurrencies available for trade. Per CoinMarketCap, Kraken was the 7th largest cryptocurrency exchange worldwide as of November 2020.
A brief history of Kraken
- 2011: Jesse Powell started working on Kraken.
- September 2013: Powell formally launched Kraken.
- April 2014: Got listed on Bloomberg Terminal.
- May 2015: Announced the beta launch of margin trading.
- June 2015: Opened a bitcoin pool of Dark liquidity.
- April 2017: Launched fiat funding options.
- August 2017: Listed Bitcoin Cash.
Despite Kraken coming to existence months before Coinbase, it falls behind in terms of the userbase. A couple of years ago, Kraken revealed the company serves more than 4 million active users. Obviously, those numbers must have surged in the past several months. Still, Kraken’s userbase continues to fell short compared to Coinbase’s 35 million+ users. The reason for such a massive gap in userbase is that Kraken did not have a mobile app for a long time. Due to the lack of a mobile-friendly experience, Kraken users could not use the service on-the-go. Now that Kraken has a mobile app to offer, it has since widened its mass users’ targeting. If you are getting started with Kraken or Coinbase, be rest assured you can download their mobile apps from Google Play Store and Apple App Store.
Now that we have seen an overview of Coinbase and Kraken, the first thing you should be asking is whether your money is safe and absolutely natural. If you search for terms such as crypto exchange hacks and exit scams on search engines, you are not alone. Some people consider the crypto industry prone to risks. You should always remember one thing: The faster you play, the more are your chances of making bad choices. Let’s see some of the key security features of Coinbase and Kraken.
Let’s start with Coinbase first. This exchange uses its standard security protocols and procedures. As a result, you can benefit from security systems and processes developed and evolved over the years.
Coinbase is a champion of cold storage policy where they HODL most of your coins in offline wallets. Cold storage enables holding cryptocurrency tokens in wallets not connected to the Internet. It is a way to prevent threat actors from gaining unauthorized access to your crypto assets.
You can also back up an encrypted version of your private keys to your cloud storage account. The exchange offers an asset custody service for institutions. So, we can safely assume it is trustworthy.
Coinbase also provides all USD accounts with something known as Federal Deposit Insurance Corporation or FDIC insurance. The U.S government federally insures depositors, and the coverage limit is currently $250,000 per individual. So, if Coinbase were to liquidate, you would still be covered up to a quarter of a million dollars.
Then, you can always set a strong password with a password manager’s help, in addition to a two-factor authentication method. Additionally, you can see whether or not a third-party data breach has compromised your email address and login credentials. Make sure to keep all of your devices up-to-date. Coinbase users can lock down their mobile accounts and use the Vault to secure their crypto assets.
Well, Kraken has been around longer than Coinbase, and it naturally had more years to stress-test its security protocols. As far as offline coin storage is concerned, Kraken keeps 95 percent of deposits offline than Coinbase’s 98 percent. On top of Kraken’s air-gapped storage, it stores private keys across multiple locations.
Regarding your digital asset security, Kraken servers are under 24/7 surveillance by armed guards and video cameras. So, unauthorized physical access to Kraken servers is virtually impossible. Plus, it encrypts sensitive account information at both the system and data level with strict control over who can access the information.
The company also employs a whole team of penetration testers for stress-testing of its internal system. It also runs a bug bounty program to encourage white hat hackers to breach the exchange’s security.
One major drawback is your Kraken account will not offer FDIC insurance, unlike Coinbase. Now it will hardly make a difference to you if you are not in the states. Since Kraken also serves institutional clients such as investment banks, mutual, pension, and hedge funds, be rest assured the exchange takes security fairly seriously.
As for your individual account security, you get features like two-factor authentication that you can easily set up using Google and Microsoft Authenticator apps.
This is important! One key factor when choosing the right crypto exchange is the range of cryptocurrency available for trading. You could always buy Bitcoin and send it over to an altcoin exchange like Binance to access hundreds of different coins, but most people often prefer doing everything on one account.
Coinbase accepts more than 35 different cryptocurrencies such as BTC, ETH, Dash, EOS, UNI, Stellar, and more. On the other hand, Kraken supports more than 45 different cryptos, including Monero, Tether, Polkadot, and more. The trading availability of these cryptocurrencies is usually subject to regulatory compliance in the respective countries.
To sum it up, Kraken edges out Coinbase when it comes to the number of cryptocurrencies available for trading.
Supported Fiat Currencies
Crypto asset support is one thing, but you will need regular fiat currency pair support to get your hands on those coins or tokens. Kraken offers fiat trading pairs for US Dollars, Euros, Pound sterling, Canadian Dollars, Japanese yen, and Swiss francs, whereas Coinbase trading pairs are limited to USD, EUR, and Pound sterling. Meaning, if you want to buy crypto with Canadian dollars, Japanese yen, or Swiss francs, you will be better off using Kraken.
That brings us to the next topic: What are the supported countries for these exchanges?
For starters, Kraken takes a restricted country approach. If you are planning to use Kraken, keep in mind that it does not offer service in the following countries:
- North Korea
If you live in any country of the world except for the restricted ones, you can create a Kraken account. But then, you will not be able to use Kraken as a trading platform. Following is the list of countries where Kraken is restricted:
- The central African Republic
- South Sudan
Unfortunately, American users located in Washington and New York State cannot use Kraken due to the lack of regulatory compliance.
On the other hand, Coinbase has considered a slightly different, accepted country approach. You can use Coinbase if you are a resident in any of the supported countries (Lest we forget, Coinbase is available in over a hundred countries across North America, South America, Europe, Asia, Australia, and Africa.)
In terms of supported countries, Kraken covers a much larger area.
Customers often wonder what deposit methods are accepted on these exchanges. Of course, the primary deposit method is bank transfer, and if you live in Canada, you always use cash or debit card deposits.
On Coinbase, deposit options are usually dependent on your location, more specifically, your country. As for the core deposit methods, Coinbase accepts bank transfers, PayPal, debit cards, and credit cards. You may also want to check out what deposit methods are available in your country.
As for Kraken, verified residents in Canada can deposit cash and debit cards as a valid payment method. The majority of Kraken customers from Europe also use their debit or credit card to purchase cryptocurrencies in EUR.
In Australia, Europe, Canada, and Singapore, Coinbase allows users to buy crypto using a credit card and debit card. It charges 3.99 percent of a total deposit as a deposit fee.
In Europe, standard buying and selling on Coinabse incur 1.49 percent deposit and withdrawal fees. Although bank transfer SEPA deposit is free, withdrawal costs €0.15. In Europe, Coinbase charges up to 2% of any transaction and a minimum fee of €0.55 on withdrawal.
In the U.S, Coinbase digital currency and ACH transfers (deposits and withdrawals) are free. However, a USD wire transfer from a bank account will set you back $10 for deposits and $25 for withdrawals.
It goes without saying, the best thing about Kraken is low fees. Kraken charges a flat fee for deposits and depending on where you are located, fees range from being free to about $5. As for the primary fee, you will have to pay when you place a market order. You will pay 0.16 percent in maker fees and 0.26 percent if you are a taker on Kraken.
Higher fees have always been Coinbase’s major drawback. On Coinbase, you will pay a whopping 0.5 percent in the maker and take your fees if you trade less than $10,000 over a 30-day period. When it comes to trading fees, Coinbase is about twice as expensive as Kraken.
When choosing or comparing two crypto exchange platforms, it is always good to consider customer support quality. On Coinbase, you have the option of submitting a report ticket, and they will get back to you over email. However, Coinbase phone agents cannot help you with any account-specific queries like order statuses specific transactions or your account history.
On the other hand, Kraken offers 24/7 live chat support, and on average, Kraken support agents usually connect within 30 seconds. In customer support, again, Kraken has the edge over Coinbase.
Kraken vs Coinbase Pro
Coinbase Pro (formerly GDAX) allows customers to trade their digital crypto assets. After all, trading is primarily why customers people are interested in signing up on Coinbase and Kraken accounts in the first place. But ever wondered do these platforms compare in the registration process?
In a nutshell, both Coinbase and Kraken’s registration process is fairly simple and straightforward, except for some key differences you need to keep in mind.
With Coinbase Pro, you must have a Coinbase account first, and afterward, you can log into Coinbase Pro. Your login and password for Coinbase Pro will be the same as your regular Coinbase account. You also need to verify your Coinbase account before being able to trade on Coinbase Pro. For instance, you will need to verify your identity as part of the standard KYC process. All you need to do is submit any form of government-issued ID cards such as a passport or a driving license.
You will also need to provide a selfie, a standard procedure on most crypto exchanges these days. For example, Binance also makes selfie-screening mandatory for new users who wish to sign up in the exchange. If all goes well, this process should only take a few minutes.
Meanwhile, the account verification process on Kraken is somewhat tedious. To deposit fiat currency, you will need to submit a copy of your valid ID, proof of residence document, and disclose occupational information. American residents need to jump through some additional hoops, including selfie verification.
To summarize, Coinbase comes out on top largely due to the FDIC insurance for U.S customers and a higher proportion of user funds in cold storage. In terms of support for the number of cryptocurrencies, Kraken has the edge over Coinbase, and lest we forget, Kraken supports more fiat trading pairs and accepts more countries when it comes. In terms of fees, Kraken easily outperforms Coinbase.
Coinbase has a relatively simpler account verification process. Also, Coinbase is more beginner-friendly than Kraken. So, if you are just getting started with your crypto journey, you will be better off with Coinbase. As for more advanced users, Kraken is the ideal choice. Although both Kraken and Coinbase has decent customer support to offer, Kraken wins hands down again with their live chat feature.
As far as the account sign-up and verification process is concerned, it is easier to get started with Coinbase as quickly as possible than with Kraken. Now, it is for you to decide which crypto exchange better suits your exchange and trading requirements.