Poloniex is one of the world’s leading cryptocurrency exchanges.
Based in Delaware, USA, the company offers a wide range of digital currencies and manages over 50 million transactions a month.
But how does the exchange shape up in the cryptocurrency sphere?
Find out in our Poloniex review.
Poloniex: Overview & History
- Name: Poloniex
- Website: www.Poloniex.com
- Type: Crypto to Crypto Exchange
- Cryptocurrency: The Poloniex exchange has over 70 cryptocurrencies registered
- Fiat currency: At the time of writing, Poloniex does not trade fiat currencies
- Rating: 4.0/10.0
Poloniex was founded in January 2014 by Tristan D’Agosta. After only three months Poloniex was allegedly hacked and forced to reduce the balance of their customer’s accounts by 12.3%. However, to their credit, the exchange saved face by repaying their debts to customers the following July.
The success of Poloniex is partly due to the demise of the firms biggest rival, Cryptsy that collapsed in 2016. Poloniex whipped in to acquire the user-base of the fallen exchange and in doing so generated trust amongst crypto investors.
Since the acquisition of Cryptsy’s customers, Poloniex has dramatically increased its market share and is consistently rated as one of the best cryptocurrency exchanges by cryptocurrency professionals. Not all customers and traders would agree, but Poloniex is still going strong.
Poloniex: Cryptocurrency Offered
Poloniex has over 70 digital coins on offer including Bitcoin, Ethereum, Litecoin, Ripple, Monero, Dogecoin, Dash, DigiBite and Zcash.
You will find an extensive list of coins and current trading prices on the Poloniex website.
Poloniex: Depositing Cryptocurrency
Customers can only deposit other cryptocurrencies with Poloniex. The exchange does not allow you to withdraw fiat currencies such as USD, EUR and YEN although it accepts USD in exchange for cryptocurrencies.
To make a deposit with Poloniex, open up the wallet you want to exchange from. This will either be a USD wallet, Bitcoin wallet or compatible altcoin wallet.
Then all you have to do is insert the address of the wallet you want to deposit your cryptocurrency. This might be the address of a trader, individual or another digital currency.
For more information with images, visit the Poloniex website.
Poloniex: Withdrawal Methods
To withdraw your cryptocurrency from Poloniex take the following steps:
- Open your desktop or mobile wallet to generate the deposit address
- Enter the address and amount you want to withdraw
- Wait for transaction to complete (*this could be up to one hour depending on network congestion
- Check your withdrawal history to confirm the transaction has been completed
It should be noted that some customers have experienced lengthy delays withdrawing money from Poloniex whilst others have been refused for wanting to draw too much.
Poloniex put a limit of $2000. Customers that wish to withdraw amounts above the threshold are asked to have a Skype interview with the accounts team in order to verify they are the owner of the account.
Poloniex: Mobile App
At the time of writing, Poloniex does not have a mobile app, but the mobile version of their website has a user-friendly interface.
The exchange offers an API for third-party developers to create tools that will improve data analysis and account management.
Poloniex: Privacy and Security
Cryptocurrency exchanges owe a duty of care to customers to provide sufficient privacy and security measures.
Poloniex claims to have excellent security controls by storing customers deposit in an offline “air-gapped” storage as a means of “Keeping hackers out.”
The security measures in place was a direct response to the security breach they suffered in 2014 after the company’s first three months of trading. Given the exchange has not suffered any further problems with security, they appear to have found a solid solution.
Security measures also require a two-way authentication process together with browser recognition tools.
Customers are asked to provide verification in the form of a passport. This procedure should only take a matter of minutes, although some users report experiencing problems with the system accepting images.
Despite these measures, it is recommended that customers using Poloniex exchange, or any other centralised cryptocurrency exchange, store your digital currencies in a digital wallet that you control – ideally a hardware wallet that is only connected to your computer whenever you want to trade coins.
Cryptocurrency exchanges potentially put your investment at risk.
With regards privacy, Poloniex has come in for some criticism. The company is alleged to outsource their customers’ service desk to a third-party helpline, FreshDesk. However, this claim has not been substantiated.
Should this be the case, Poloniex put privacy and security measures in jeopardy. When a ticket is raised, members have to leave their email and account details on file with the third party.
Although Poloniex claims they do not release public keys, customers trading in cryptocurrencies that do not have privacy measures – such as Bitcoin – are exposed to employees of FreshDesk who can see how many digital tokens they have in their account and what transactions they have made.
These same privacy issues raised about Google are thus called into question.
Fees charged by Poloniex are reasonable in comparison to some cryptocurrency exchanges. Still, they are not the cheapest.
A plus point is that the exchange does not charge deposit and withdrawal fees. They do however charge transaction fees and take 15% of earned interest.
Poloniex wants to encourage robust liquidity in order to promote the health of the cryptocurrency ecosystem. Their solution is to establish a two-tier fee schedule which charges varying rates for “makers and takers”.
Both makers and takers are charged a fee for the transaction.
Makers are the party that put up an offer to buy or sell good or services. Takers are the recipients that fulfil the order and take the digital tokens.
The maker-taker model rewards makers by charging lower fees on the principle that makers help the liquidity of the market.
Poloniex Fee Schedule (as of 17 January 2018):
The percentage of fees payable is calculated in accordance with the last 30 days of trading volume on your account which is worked out based on spot and margin prices.
The more Bitcoin involved in the transaction, the lower the percentage of fees are paid.
Anybody lending cryptocurrencies are charged a service fee of 15%.
Poloniex: Customer Service
As mentioned above, Poloniex outsources their customer service to a third-party supplier which also has a number of other clients.
Although these claims have not been confirmed by the company, numerous customers have taken to various forums to complain about the length of time it takes the Poloniex customer services team to respond to a ticket.
Poor customer service support is an issue for cryptocurrency exchanges in general. Some users have attempted to defend the Poloniex issue by suggesting the company is probably struggling to cope with the influx of customers they have received.
However, if this is the case, the company does not appear to have done anything to rectify the issue. Some customers complain they have been waiting for well over a month for a response.
The issues with delayed responses have persisted into January 2018.
The Poloniex website has a user-interface that is straight-forward enough to use. It has a minimal amount of pages in the menu bar and scant information on the website.
Everything you need to know about the current value of coins and which coins you can trade with through Poloniex is readily on the website.
All in all, the user-interface has received positive feedback from users. The only complaint seems to be when the DDOS is under strain during peak trading times in the US.
When you register an account with Poloniex you will also have access to a dashboard from where you conduct your trading. The design and layout are very intuitive and simple to use.
When you log in to your account, un-cached users will see a notice flash on the screen that reads: Checking your browser. This is a security measure which is common among cryptocurrency exchanges to ensure cybercriminals or malicious botnets are not trying to hack into your account.
Poloniex: Who Is It For?
The Poloniex exchange is ideal for traders and investors that want to convert one cryptocurrency to another, lend digital token or margin trade.
The exchange is open to users from anywhere in the world that live in countries which allow citizens to trade cryptocurrencies.
Poloniex: How To Buy Cryptocurrency Step-by-Step
Before you can purchase a cryptocurrency with Poloniex, you need to own digital tokens they support.
However, the exchange deals with over 70 altcoins including all the industry-leading tokens so investors should not have any problems switching from one crypto to another.
In order to buy cryptocurrency from Poloniex, you need to register an account and deposit your cryptocurrency.
To do this, select Balance>Deposits and Withdrawals, then click on the type of wallet you have digital tokens in, i.e BTC wallet, ETH wallet, and send the coins to that address.
Once you have deposited your coins, go to the Poloniex exchange website, select the exchange page and browse the cryptocurrencies available from the right-hand side of the screen and click on the currency you would like to buy.
Midway down the centre of the screen you will see three boxes, buy, limit and sell. These titles of these boxes will display whatever virtual currency you select.
All you have to do then is enter the amount you want to buy and sell into the relevant fields.
Poloniex: Overall Rating 4/10
The jury is still out on Poloniex. The company manages to sustain a reasonably sized clientele but does not have sufficient technologies to cope with heavy traffic.
The website is notoriously slow during peak trading hours and whenever a cryptocurrency has a bullish charge the exchange is not able to cope with a huge amount of transactions over a short period.
Some cryptocurrency commentators have also raised red flags with regards the secrecy of the company’s owners. The only name to be released by the company is co-founder and CEO, Tristan D’Agosta.
Concerned investors have also raised this issue on the forum Reddit. A response from the company’s Chief Experience Officer CXO explained:
“It’s honestly not a case that we’re hiding anything. Our success at the top of 2016 took us by surprise and we spent all year with our heads down expanding our infrastructure and dev-ops. Unfortunately, the result was that marketing communications took a back seat.
I’m now just starting to get some breathing room and am building materials that (hopefully) can shed some light on who we are and how Poloniex operates.
What I can tell you in the meantime, if it helps.”
The CXO left a link to his personal Twitter account: @MickD
Since this response was posted on May 2017, the names of Poloniex’s owners are still unknown.
User reviews also leave a lot to be desired.
Customer service support takes a hammering every time. However, this is the case for cryptocurrency exchanges across the board so it would be unfair to single Poloniex out.
The only query with the customer service team at Poloniex is whether they outsource to a third-party company and jeopardise the privacy and security of client accounts.
Lengthy delays in transferring money have also irked customers.
This issue could be due to a lack of staffing numbers in customer services and because the company is using technology that is capable of handling the number of customers. However, the company has plenty of time to address this issue – since 2016 – yet still do not have appeared to rectify issues customers are having.
It has to be said that the majority of people are more likely to complain about a company for bad service than give praise a company that delivers a good service.
The law of averages predicts the majority of customers will not experience any problems. The low percentage that does have a bad experience will nearly always complain.
Regardless of the cryptocurrency exchange you choose, there is always a chance you will encounter a problem and a low-quality service.
The industry is essentially still in nappies and currently going through teething problems. Patience and due diligence are required, but as far as cryptocurrency exchange is concerned, Poloniex already has the backing of over millions of users.
Nonetheless, comparing Poloniex to more advanced crypto-crypto exchanges such as Binance, leaves Poloniex way behind in the game.
What do you think of our Poloniex review and rating? How was your experience? Let us know in the comments below!