Overview of Various Bitcoin/CryptoCoin Exchanges
Mt.Gox was a Bitcoin Exchange. Located in Tokyo, Japan, launched in July 2010. By 2013 it had grown to handling 70% of all Bitcoin transactions. It had become the De Facto main bitcoin exchange. By February 2014 it suspended all activity, closed it’s doors, liquidated, and ceased to be. It had around 850,000 of bitcoins valued at the time at close to half a billion dollars belonging to customers and company which went missing and stolen. Only 200,000 of the coins have since been recovered. Since its abrupt ending, new organizations have emerged to absorb the role as major players as marketplaces for altcoins.
Bitstamp, BTC-E, Bitfinex, Coinbase, Cryptsy have since taken on the roles of de facto dominant Bitcoin marketplaces in terms of presence and volume. There are a few other large players involved in this space but let’s focus on these.
Bitstamp, based in United Kingdom, originally in Slovenia, and founded in 2011 as an alternative to MtGox by CEO Nejc Kodrič and co-founder Damijan Merlak is the world’s second largest Bitcoin Exchange by volume. Bitstamp strives to be as transparent and well-regulated as possible. It is a popular and well-run bitcoin exchange. A high degree of transparency makes bitstamp highly regarded in terms of being able to track its records and finances to ensure everything is on the level. Meaning the bitcoins claimed to be there all are and not in a money blackhole.
- Offers an API to allow clients to use custom software to access and control their accounts
- Bitcoin only no other cryptocurrencies accepted
- High liquidity and competitive prices
- Dollar and Euro deposits through bank account or SEPA
- Reasonable fees on commission for trades
- Two-factor authentication recommended
- Basic trading tools
BTC-E, is the least transparent and most mysterious of the current major cryptocoin exchanges out there. They launched trading in August of 2011. Not much is known about the operators of the site. Irregardless of this fact it is currently one of the most used in terms of volume of alt coins moving through it. Along with Bitstamp BTC-E.com shares the top slots as one of the major altcoin exchanges presently. It’s features are in Russian and English, which would point to eastern european or Russian organization as the owner/operators. To leave its name out of official records it uses third-party banking services. One such bank involved is located in the Czech Republic. Russian programmers Aleksey and Alexander are credited as being the Co-founders in an interview with Coindesk. The BTC-e managing company is said to be based in Cyprus. You’re able to make trades using currency pairings such as US Dollars, Russian Rubles, and Euros.
Bitfinex, trading site was founded in January 2013 by French developer Raphael Nicolle. The company that owns and operates Bitfinex is called iFinex is structured as a limited liability corporation in Hong Kong. The exchange is still in beta testing mode, with a few issues including less than stellar customer service. Nonetheless, it is being used very actively. It’s unique draw is that is allows for the ability to trade coins on margin and collect interest for it’s users.
Coinbase, based in San Francisco California is a bitcoin wallet and exchange service, founded by Brian Armstrong and Fred Ehrsam. Users of Coinbase can buy and sell bitcoins at the current market rate with a bank transfer in both the US and eighteen European countries for a fee of about 1% of the value of the transaction. Coinbase is noted for its reputation as having a user-friendly easy to use user interface. However it has been criticized for cancelled and delayed orders and unresponsive customer support.
Cryptsy, based in Delray Beach Florida and founded by Paul Vernon of Project investors inc. began operations on May 2013. Cryptsy trades in over 130 cryptocurrencies, and cryptocurrencies alone. There are no fiat government currency pairings trading on the exchange to date. Since creation is has seen rapid growth in both customer base and trade volume to the point of over 20k registered users with a volume of over 100k trades per day.
Bitstamp seems to be perceived as the main Bitcoin exchange. However as shown with Mt. Gox’s demise anything can happen. The main takeaway is just to remain diversified. It’s pretty reasonable to say be diversified and select a few exchanges that appeal to your purposes and spread your cryptocoins amongst 2 or 3 of them. That goes with how you store your cryptocoins on wallets as well. Spread your holdings amongst a few crypto wallets, exchanges, activate 2 step authentication for additional security, and just generally be smart about safeguarding your alt coins from crooks.