Playing with Cryptocurrency: Part 2 – Coin Exchanges
Since Bitcoin and the other cryptocurrencies can be traded like stock, I decided to try the process out. My first stop was to the stock trading app Robinhood. I also to look at dedicated cryptocurrency coin exchanges such as Coinbase and Bitpanda.
When it comes to dedicated exchanges for cryptocurrency, the most well-known is Coinbase. Partially because they had a well publicized breach a while back that allowed peoples accounts to be hacked, but also because they are the largest in the US. The UI is easy to navigate and they have dedicated apps for Android and iOS. They use 2 factor authentication which is a nice security feature.
The signup process required me hold my license to the phone and let the camera take a picture of it. In my case, no matter how well lit the license was the app kept denying it. Eventually, I did get my account setup and verified. I was forced to setup using my US account instead of my European one, since my driver’s license is out of the US. Which was annoying since it would have been preferred to fund my account in Euros. Funding the account and connecting it to my US bank was easy enough, and once I deposited and purchased $100 dollars of Bitcoin, I received an extra $10 dollars because of using a referral. If you are interested in checking them out here is the referral link. Once you buy $100 in bitcoin we would each get $10 as a bonus.
My second stop was to Bitpanda a European company based out of Germany. Since Coinbase didn’t let me signup and fund my account in Euros, I hoped Bitpanda would. The sign-up process was easy enough, but it went downhill from there. In order to buy currency, I needed to complete a series of verification steps. The first was signing up, which doesn’t accomplish anything since you are not allowed to buy cryptocurrency just by signing up. The second (bronze) level caps the amount of currency people can buy to €50 euros a month. All I needed for that, was to add a phone number to my account. Since I wanted to fund my account with €100 euros like my US account, I needed the next level. To do that people are required to provide ID. This is done through an online video call to one of the verification services they use. This process was terrible. The person on the other end was not helpful or friendly, or useful at all. It is also further proof that customer service jobs will be the first to go when AI gets better. Anyway, I canceled my Bitpanda and will never consider going to them again. Basicly my Irish ID wasn’t acceptable and my US passport wasn’t compatible with having a European account.
They didn’t like the idea of an American using their service either. “Please note that Luno currently cannot verify US citizens. While you can use our wallet for sending and receiving Bitcoin, you cannot buy or sell them or use our Luno Exchange services.”
When I attempted to cancel my account with them, I emailed the support email address and couldn’t get through. I’m still not sure if the account has actually been canceled.
Still looking to buy and sell crypto and fund my account in euros, instead of dollars, I turned to Kraken. The verification tiers allow for a larger deposit and withdrawal amount at T2 that Bitpanda, and the ID verification process simply involved uploading a copy of my ID vs a video call with a rude German. They use a similar tier system to Bitpanda, where the first tier is simply signing up, but the 2nd tier allows for up to €2 thousand euros funding. Since I only wanted to fund my account with €100 euros, I stopped at that tier. The kraken UI isn’t as user friendly as the others, and even though they offer 2 factor authentication, they don’t make it easy to setup and activate. Also, it looks like their phone app is by a 3rd party not one they developed.
There are quite a few other exchanges out there, but since I got what I wanted out of Coinbase and Kraken which was to buy a little and dabble in the market, I’m going to end this post on that. Feel free to do your own research to find the one that works best for you.
On another note: I found it odd how difficult it was to setup and fund these exchange accounts. The idea of cryptocurrency is that it is an alternative to the status quo. Yet, setting up and using currency exchanges involved providing a lot of personal information such as addresses, phone numbers, ID, and bizarre hoops to jump through. I read about one exchange that requires applicants to provide a link to their LinkedIn profile. I’m assuming some of this will work out as time goes on and exchanges consolidate and government regulators decide on rules around the exchanges.
Also if you do want to use Robinhood for crypto trading here is a referral link. If you sign up they will give us each a free share of stock in a company.