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In this guide, we’ll learn everything there is to know about the Coinbase vs Kraken rivalry!
So, you’re on our way to becoming a crypto buff and you’re ready to get trading! But, where do you start?!
Cryptocurrencies aren’t like bread, eggs, and milk. We can’t go down to our local store to get them, and Amazon definitely isn’t sending them with next-day delivery! Instead, we need to go to an online cryptocurrency exchange.
Essentially, these exchanges help us swap our local currency into cryptocurrency. They also provide a platform for trading cryptocurrencies, selling them and storing them. But with so many options available, which should you choose?
Kraken and Coinbase are some of the largest and most reputable online currency exchanges. However, it’s also important to understand their differences.
Back in 2011, the founder of Kraken, Jesse Powell, was working at the largest cryptocurrency exchange of its time, Mt. Gox. There had just been two major hacks, and security was becoming difficult to manage. Bitcoins were going missing. If this continued, the future of crypto was bleak.
Jesse thought that he could do a better job. He knew he could create a secure cryptocurrency exchange which would help people trust in the system and bring crypto into the mainstream!
So, he created Kraken. He focussed on security when creating Kraken; hackers were never going to get past his security system. And so far, it has worked — Kraken has never been hacked.
Now, Kraken aims to be the exchange that offers the widest range of cryptocurrencies that you can buy using fiat currencies (USD, EUR, JPY, etc.).
After its public refusal, Kraken expressed an intention to return service to New York residence pending the removal of what it perceived as unfair and counterproductive licensing.
Coinsetter, announced to clients in December 2015 that it would thenceforth impose a $65 fee to offset the cost of the very same BitLicense Kraken refused to afford.
In absorbing Coinsetter, and by extension Cavirtex, the following month, Kraken opened up its platform to residents of 37 other states, and to all Canadian residents.
Alongside this deal, Kraken announced partnerships with payment providers SynapsePay in the U.S. and Vogogo in Canada, in order to provide its newest clients with access to fiat deposits and withdrawals respectively.
One month later, Kraken announced the completion of its Series B round of investment lead by SBI Investment, a prominent Japanese venture capitalist firm under SBI Holdings. Following this investment round,
Kraken announced two major acquisitions that year: Dutch exchange CleverCoin, which was acquired in June, and Glidera, a wallet service allowing users to directly fund Glidera bank accounts with fiat for the purchase of cryptocurrencies on the Kraken exchange.
Kraken's reputation for security was challenged amidst 2016's buildout of partnerships and acquisitions.
Multiple claims emerged in the latter half of July via news media and social networks that clients’ accounts had been compromised and funds stolen.
As Kraken went silent reportedly for investigation, users threatened to alert and petition the FBI's Cyber Crimes Division for redress. Within a month,
Kraken presented clarification that ‘Kraken’ was never compromised; that is, after internal investigation, the
security team reached the conclusion that Kraken systems, servers, and databases were not accessed by malicious attackers due to any identifiable vulnerability for which they would be responsible.
The company attributed affected users’ missing funds to phishing and man-in-the-middle attacks, and stressed the importance of enabling
Kraken websites security features, such as two-factor authentication for withdrawals or the Global Settings Lock to restrict unfamiliar IP access.
In the aftermath of the hack that wasn't, Kraken asserted recognition of their continued responsibility to protect clients, and stressed equally so, the client's responsibility in protecting him- or herself.
