Exchanges War — A detailed analysis of the main platforms on the market

NovaMining
Feb 6, 2018 · 5 min read

Exchanges are online platforms offering the exchange service between cryptocurrencies and FIAT currencies. — They are essentially the “online version” of all those Forexexchange and Travelex branches which are mainly found in airports.

The number of the available Exchanges today is constantly growing, with an increase in competition and consequently a continuous adjustment and improvement of the services quality offered.

In addition to shining in the services, Exchanges must continually find solutions to these complex situations they go through in, due to different reasons about the cryptography world to which they belong. That’s why we’re talking about the “Exchanges War” — In the recent days, the episode occurred of Bitstamp and Coinbase is an example.

Nejc Kodrič (see the profile)

Bitstamp CEO, Nejc Kodrič, has released a statement to reassure users (traders) about the “lenghty delays” that is going through the platform at the moment, focusing its marketing strategy on the “Good Communication” priority.

“The best way to attend to doubts and fears is by providing good communication and constant updates, which is why I want to address you directly to explain why these delays are happening and how we will overcome them.” — he said.

At the core of the root causes, we find Coinbase, a Blockchain wallet provider. Due to its lack of proper support to user-reported problems such as missing funds, wire transfers, and with some well-known Bitcoin figures who publicly threaten legal action over the errors, is planning to offer Bitcoin buying and selling, with altcoin assets.

So, Bitstamp solution is to get away from Coinbase technical problems, as exchanges worldwide feel the pressure of mass adoption.

Another episode is the case of Bitfinex, world’s largest cryptocurrency exchange with higher Volumes, and Tether (USDT), the tokens belonging to a company of the same group. Tether’s coins have become a popular substitute for the Dollars on cryptocurrency exchanges worldwide, with about 2.3 billion dollars of tokens in circulation.

Bloomberg announces that the U.S. Commodity Futures Trading Commission has sent subpoenas to Bitfinex and Tether company, which declares that all of its coins are backed by US dollars held in reserve, and that it is responsible for providing conclusive evidence of its authorities eligibility.

This stage of “legal verification” that appears to be going through Bitfinex and Tether comes from user reactions, where skepticism can take over. Or, it can trigger the famous FUD, it means that advertising message that produces fear, uncertainty and/or doubts about the platform’s work.

More Exchanges Wars episodes are about Bittrex, Binance, Kraken and KuCoin.

Bittrex, one of the first non-anonymous Exchange, made headlines in October 2017 for its sudden decision to disable thousands of compliance review accounts without notifying users in advance. Perhaps because of this hiccups of customer service, the Exchange announced in December 2017 that it temporarily interrupted new users access, explaining the backlog of user support tickets and their current inability to accurately verify each new user with such a high demand.

Bill Shihara (see the profile)

Mr. Shihara, CEO of Bittrex, says that based in the United States, they are required to take their KYC and AML legal obligations very seriously, and that they will invest on staff to speed up the user support process.

Binance, based in Hong Kong, opted instead to place temporary bans on new traders, as it records a “couple of millions” of new users every week. Despite the impossibility of accessing the platform or singing up, the platform and its choices to introduce certain new cryptocurrencies and tokens (see TRON — TRX), records a continuous exponential growth.

Chief executive, Zhao Changpeng, said that the mayority of the 4 million accounts he oversees on Binance are largely male customers with an average age of 25–35 years.

“There are a lot of guys with a lot of money.” — he said.

Zhao Changpeng (see the profile)

Mr. Zhao moved to Toyko from China because of a ban placed on cryptocurrency exchanges in September 2017 by Chinese Premier Xi JinPing.

Geographically, it states that trading on Binance has grown substantially in Japan, U.S. and Korea and described trading volumes for the United Kingdom as “big”.

Another case of delay is Kraken, one of the most famous Exchange in the world. In January 2018, it had to put the service offline for more than two days, due to the presence of a bug and delays in updating the platform.

In reality, the initial communication expected only 2 hours offline so there were many controversies by users. In any case, with their back online, Kraken announced on Twitter and on his site that, until the end of the month, unleveraged trading would have made it for free. The site has been working normally since going online, but trading was paused for several hours due to problems displaying order book data that have since been resolved.

The most recent online exchange platform is KuCoin, which started out as a digital asset related to an Exchange and then it starts to saw a significant increase in price. As with Binance, KuCoin is also an experimental exchange with a proprietary token, KuCoin Shares (KCS). KuCoin is competing to list new and powerful digital assets and the KCS coin has been a rapid appreciation. Substantially, KCS brings liquidity to pairs with Bitcoin, Bitcoin Cash, Ethereum and others.

Another feature of the new platform is its aggressive advertising with Bitcoin giveaways, tokens airdrops or even car giveaways.

KuCoin (see the website)

CONCLUSION

Despite this it is useful to see how the solutions are formulated and adapted in a market that is still immature and growing like the cryptocurrency’s world.

CREDITS


NovaMining Media

News, updates, insights from our emerging startup into blockchain industry

NovaMining

Written by

Blockchain start-up building services for improving transparency, quality, usability and compliance criteria into crypto mining industry. www.novamining.io

NovaMining Media

News, updates, insights from our emerging startup into blockchain industry

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