Poloniex Crypto Exchange: Bitcoin Margin Trading, Lending & Fees

Poloniex Exchange Review

Poloniex is one of biggest cryptocurrency marketplaces in the world, and frequently the largest bitcoin trader. Founded in 2014 by Tristan D’Agosta, the US-focused exchange opened in San Francisco.

There is some controversy in the legend of Poloniex, as many authors list it as operating out of Wilmington, Delaware. This appears to be an agent or registering party’s address, although online masking services make it difficult to conclude with certainty. While initially anticipating servicing the American market, overseas interest prompted the exchange to begin thinking globally.

Having begun attracting traders from abroad, the company shifted their focus to ensure that all traders are welcomed onsite, and not just US citizens. Daily trading on the exchange now stands at an average of just under $1 billion, and the data monitor CoinMarketCap ranked Poloniex as the 25^th biggest digital exchange in May 2018, citing a daily trading figure of just $70 million. A glance at the day’s trading on Poloniex would seem to indicate that either figure could be right, but the more accurate daily average seems to rest with CoinMarketCap.

After an extensive redesign circa 2015, the development team introduced additional new features, such as enhanced technical analysis charts and improved UX that includes live chat. With a damaging history of incredibly tardy support responses, the exchange’s addition of “live chat” may be of negligible value.

Unlike other similar exchanges, Poloniex has always presented grandly and been well patronized, yet has dragged this glaring issue along with it through the years. Less a Poloniex problem than a persistent problem facing crypto trading outfits the world over, support in the cryptosphere has been a lagging and potentially preventative issue since blockchain began.

That said, the site is well-designed and polished, and a truly immersive crypto trading experience is made real through this exchange. Users are loyal and growing, and the UI is not only logical and easy to use, it’s also smart, with a sophisticated feel in the presentation.

Poloniex [poloniex.com] has evolved in a very short space of time into a user-defined, elegant altcoin exchange, offering a very secure trading environment, data analysis and advanced charts. The overall security, depth and volume of daily trading make Poloniex the benchmark for many of its users.

How Does Poloniex Work?

The Poloniex model is similar to competing digital exchanges that deny fiat currency and act as pure cryptocurrency trading venues. A “pure” crypto to crypto platform, fiat currencies cannot be employed to transact on the site, not even to purchase initial holdings users need to have digital coins in a wallet in order to be able to trade on the platform. Around 100 coins are on offer and trading fees range between 0.08 and 0.25 percent.

New users will load their exchange account from a wallet facility. It might seem obvious, but in order to trade, users are advised that they need to be in possession of a cryptocurrency supported by the platform already.

Clicking Balances > Deposits & Withdrawals onsite, users can select the wallet they wish to deposit to and fund their account. Once set up, users can trade a variety of altcoins for Ether, bitcoin, USDT or Monero.

Pairs to trade are figured from the RHS of the Exchange page. A user seeking an altcoin sets a buy price and the total of the digital currency desired when placing an order. The exchange charges no deposit fees, although blockchain network fees are applicable and vary from one project to the next.

Poloniex makes it easy to pop in and out of the exchange to trade once established. With a simple, logical layout, new users can familiarize themselves with the site in a day, and this ease of use goes some way towards explaining the exchange’s popularity.

The standard two-step authentication protocols are at play on Poloniex, and in keeping with the current practices of cybersecurity, everything is under 24/7 monitoring, while cold-vaulting reserves is also practiced. The exchange keeps the majority of deposits in air-gapped cold storage. This way, the exchange maintains online only what’s needed for daily trading, storing the bulk of holdings out of the reach of attack.

Another component of the exchange’s success is its dynamic inclusion of valuable tokens as they arise. Following strict criteria in evaluating coins, the exchange’s users claim a confidence in using the platform as it is current and connected to news in the cryptosphere.

Poloniex UX

The exchange is emblematic of a modern digital trading platform, having gotten most aspects right in the initial build. Starting from a good base, it is hoped that Poloniex might emerge as the exchange that sets new service levels addressing UX.

Unfortunately, while not endemic to Poloniex, the perpetual complaints on serious user issues remain. On the plus side, it appears that support issues predominate user comms, as opposed to more serious concerns. That said, when support failures result in unpaid or terminally stagnant or evasive funds, it is hoped the exchange will emerge at the forefront of professionalizing the arena on this issue.

Other exchanges have had far worse press for their intransigence and even demonstrably absent customer support, but Poloniex has made a meal out of poor resolution. An overview of traders’ complaints reveals dire unresolved issues that are unacceptable in any trading arena, where time is of the essence.

Poloniex traders have waited weeks and even months for their issues to be addressed, while some continue to wait. As a phenomenon, it is unfortunate that the single aspect of poor support contributes still to the scam perceptions of millions of people all over the globe. Especially in the asset management arena, tales of indifference or sneakily-built, hands-off client support are a deadweight, holding back the potential adoption of digital assets by immeasurable numbers of the world’s citizens.

Withdrawal Issues – the worst kind – constitute the majority of serious complaints. While cryptocurrency networks are still sometimes unstable and the entire industry itself still such a brand new thing, one would nonetheless expect a big hitter like Poloniex to be targeting resolution on this front.

It flies in the face of such a polished and professional site that the focus remains on company benefits, not user experience. Even in cases where a new account holder can withdraw funds, it is often difficult to up the maximum daily withdrawal of $2,000 per day. Any fintech platform is only as good as its display of how seamlessly it returns users’ funds, and here Poloniex unfortunately does no better than any other, and frequently does worse.

Poloniex Exchange Attacks

In February 2018, Circle Internet Financial Ltd., the Goldman Sachs-backed mobile payments company, acquired the exchange after brief negotiations. Prior to this, in March 2014, Poloniex succumbed to a hack costing around 12.5 percent of held bitcoin. As testament to the security protocols at play on the exchange, Poloniex stopped the attack and temporarily closed the trading floor.

A further feather in Poloniex’s cap is the fact that, after trading resumed and losses were tallied, company CEO D’Agosta took the decision to refund users. Not all good news, as the refunds were partially financed by increasing fees, the exchange nonetheless made a grand statement about its credibility and overall trustworthiness.

As much-vaunted legislation comes home to roost in many countries around the world, Poloniex is also required to remain current on regulation in all of the jurisdictions in which it operates – basically the world. Due to local laws, some American states have been denied service. For example, July 2017 saw Poloniex exit from Washington State. This followed the enactment of the Uniform Money Services Act, Senate Bill 5031.

Although it sounds dire, law firms announced in 2017 that they were investigating claims of users who had suffered losses due to DDoS attacks. More an inevitable component of online life, Poloniex was nonetheless targeted by some traders pursuing these losses.

While an outside observer with scant knowledge might deem a DDoS attack and subsequent losses as negligible, the reality is different. In a DDoS attack, it frequently happens that leveraged positions are liquidated. In other words, traders having taken a prospecting position see their strategy corrupted and rendered void in the disruptive attack. Typically, the attack will wobble prices if sustained or big enough, and traders betting that ETH will, for example, raise in value over the next period of time will see price fluctuations destroying their planned, technical analysis. Positions fail and losses are incurred.

With the backing of Goldman Sachs, it is hoped that security will be prioritized and more traditional and tight protocols will be brought into play on the exchange. After initially denying any conversation, neither company would disclose the price paid for Poloniex after the deal was struck. Circle estimated daily volumes at up to $2 billion at the time, and Fortune Magazine reported that the deal cost $400 million.

Poloniex Conclusion

A sleek and popular site, Poloniex remains a top-end port of call for those active with cryptocurrency. Easy enough for new users to acquaint themselves with, the site has also been able to satisfy exacting, dedicated traders.

On the whole, while delayed or terminally absent payments cannot be denied as serious concerns, the exchange is a well-managed construct with a deservedly loyal following. In the novelty of the advent of blockchain technology and accompanying digital assets, much has been written off to teething problems. In 2018, however, Poloniex now has the opportunity to outperform on issues of support, and rise to the top of the upper ranks.

Assuming the company can sidestep waiting periods of 90 days and longer for support to address serious user concerns, Poloniex has every potential to remain one of the world’s largest bitcoin exchanges. New users are advised to read through chat rooms on relevant forums to satisfy themselves that the reported-on services will meet their cryptotrading needs.