To trade cryptocurrencies securely in the markets, you need a reliable and carefully designed exchange. Between 2009 when Satoshi Nakamoto created Bitcoin and 2018, the exchanges have become the dispensing platforms for tokens.
Poloniex is one of the top cryptocurrency exchanges and was established in 2014 by a blockchain enthusiast, Tristan D’Agosta. As one of the early trading platforms, Poloniex is considered more stable compared to newer entrants. However, the fact that it has a hacking history gives potential clients some doubts.
This Poloniex review digs deep into Poloniex, its history, architecture, and mechanics to get answers to some questions that have refused to go away, including “Is Poloniex safe?”, “Is Poloniex a Scam?”, and “Will Poloniex get hacked again?”
Poloniex A 4.4 Star Rated Cryptocurrency Exchange
When D’Agosta created Poloniex, he was very clear about the main objective: to help take crypto coins to as many people as possible. He has executed this goal with zeal as evidenced in the progressive efforts to enhance its user experience.
While Poloniex’s hacking of 2014 was its lowest moment, it also contributed to helping the development team reinvigorate their commitment to enhance performance, user experience and safety. Every user who comes back after some time is assured of getting a more reliable and intuitive platform.
Most people who have used other trading platforms such as Bittrex and UPbit indicate that the advanced trading tools at Poloniex make it possible for users to execute their strategies easily. Whether your strategy is targeting emerging tokens or pitching on key events to optimize profitability, Poloniex is no doubt one of the great options.
The Poloniex Operational Mechanics
Poloniex, as a centralized exchange, requires users to register for accounts and deposits funds before being allowed to trade. Though it operates as a crypto-to-crypto exchange, it is registered in the United States with the Financial Crimes Enforcement Network (FinCen) as a Money Service Business (MSB).
This registration demonstrates the founders and development team as law-abiding entities. To start trading at Poloniex, users are required to register and verify their accounts.
The exchange, like most trading markets, has three types of accounts based on the level of verification. The account type also determines the amount you can withdraw from the exchange on a 24-hour cycle.
- The first level verified account: This account only requires users to provide an email address, name, and country of origin. The deposit and withdrawal limits for this account is $2000.
- The second level verified account: To trade in the second tier account, users must meet all the requirements of the first level account, plus ID and passport photos. The deposit and withdrawal limit for this account is $25,000.
- The third level verified account: To get the third level verification, users are required to make a direct application to Poloniex management. This Poloniex review found that withdrawal levels at Poloniex are indeed higher than those of competitors such as Coinbase and Kraken.
Currency Support and Trading Margin
As a crypto-to-crypto only trading platform, the options of using Poloniex are relatively few. You can only make deposits with cryptocurrencies such as Bitcoins, Ethereum, and Ripple among others.
Note, there is an option of storing value in USDT (Tether) for the people who are nervous about market volatility (1 USD=1 USDT). But the fact that there is no fiat allowed in the exchange implies that you will still need to use another platform such as CEX.io to convert funds to tokens or tokens to fiat.
Margin trading at Poloniex is a great feature that makes the platform stand taller than others in the market. It allows users to borrow funds on a peer-to-peer basis to trade and make more profits.
Note that margin trading is not a simple short-term thing. It is a little different from standard trading because you need a collateral to access more funds to trade on the platform. Here is a demonstration of how margin trading works at Poloniex.
The Transaction Costs
While Poloniex management indicates that it is the cheapest in the market, the reverse is indeed true. With every transaction, the maker is charged a maximum of 0.25% while the taker pays 0.15%.
Even though the platform offers lower transaction charges for those who move larger volumes, it is still higher compared to other top platforms such as Binance and KuCoin. Note that an additional fee is also levied on the loan you borrow for margin trading and during withdrawals.
Poloniex Security Review
Cryptocurrency exchanges have become the primary target for hackers because they hold many cryptocurrencies in a centralized vault. Poloniex became a victim of such attacks when it was hacked in 2014, resulting in loss of 25% of its Bitcoins.
While the platform installed highly effective strategies after the attack to enhance security, it still suffered another attack in 2017, resulting in a loss of $25,000. Many people are now wondering if Poloniex is safe?
To guarantee users better security, Poloniex uses multiple strategies targeting various sections of the platform:
- Use of cold stores to store the bulk of the users’ assets. This lowers the level of loss in the event of an inevitable attack.
- Two-factor authentication when withdrawing funds from the platform.
- 24/7 monitoring that helps identify gaps and the team addresses them immediately.
- Poloniex allows margin trading.
- It utilizes advanced security features, such as cold storage.
- Highly responsive customer support.
- A highly intuitive user interface.
- The platform is very stable.
- Supports most popular and top cryptocurrencies.
- It is a cryptocurrency only platform.
- The exchange has a hacking history.
- Management of private keys is centralized.
This Poloniex exchange review found Poloniex to be a highly agile platform. Its commitment to progressively enhance its interface and unique features such as GDAX and margin trading put it on a class of its own.
Even with its progress, the recent hacking of 2017 and emerging complaints from users have put the exchange in a bad light. Now, it is indeed impossible to say that users’ coins in the exchange are completely safe.
Even though some of those who review Poloniex might have given it a clean bill of health, this Poloniex review calls for greater caution when trading in the platform. We strongly recommend that you compare Poloniex with other exchanges such as Binance, Bittrex, and Kraken before making your ultimate decision.