Another requirement was the exchange could not take my personal ID or similar information, since I don’t know where that information would go, who would have access to it, or if a 3rd party (read government) could coerce the exchange into giving up my information without my knowledge or consent.
My information’s privacy should be a standard feature, and if Yahoo, Google, Facebook and others are giving up user information to governments, through strong-arm tactics or otherwise, why trust any online entity? If you WANT to provide more, to make your account “more secure”, that should be an option, not a requirement. So this would be a great way to test three of the top digital currency exchanges on the market, BitStamp, Kraken, and Cryptsy, and see who does it the right way.
As many do, I hit Google to search for an exchange, and the search rankings had BitStamp at the top of the list. A big outfit out of Berkshire, U.K., they have been in the digital exchange market since 2011, and they currently control over 15% of the exchange market, according to Bitcoincharts.com. They ask you to set up an account with a simple form, and then they send you the customer ID and password information. They use a customer ID system, not a username you would set and remember, so unless you memorize their 6-digit customer ID number, you will have to go to your email, find the email, copy their 6-digit customer ID number every time you want to login (their site doesn’t remember your log-in credentials), and then you can log in. The password they send you can be changed, but not the ID number. So convenience is not a strong point of BitStamp’s account set-up.
That also extends to funding the account, as they will ask you to send a state or government ID, AND a second piece of ID, like a utility bill. That doesn’t not seem to be an option, but a requirement to use their system, and exactly what I was looking to avoid from Jump Street, so Bitstamp can head over to the bench. Time to find another player who can do this job simply, and easily.
Kraken was my next stop, and their account setup was simpler to use. You set your username and password, which is a plus. They have a well-sorted system as far as identification and how much you want to provide. If you just want to swap digital currency, like me, all you need to do is fill out a short form and provide a phone number and you’re good to go, in “Tier 1.” If you want to exchange fiat currency for crypto-currency, you’ll need to step up to “Tier 2,” and disclose your identity for that online capability.
So the Kraken account is optimized for convenience, and other more elaborate options, but Kraken’s downfall is that they don’t trade Darkcoin. They only handle a handful of currencies. Litecoin, Dogecoin, Peercoin, and Namecoin were available, but not much else. I was expecting them to service the entire market, a full laundry list of market-ready currencies, not a few cherry-picked coins. So Kraken’s actual usefulness is limited, since they don’t even the support the top 10 coins in the market.
So the third time was the charm with Cryptsy. They account set-up is well-done, the emails come in a timely fashion, and they handle every digital currency you can think of, and hundreds you never heard of! They ask for your ID verification, but say that if you don’t want to go that route, your transactions would take longer, with at least 4 transaction confirmations (10 minutes each through the Blockchain). So the deposit of any currency would take a minimum of 40 minutes. Time wasn’t my concern, so this seemed like a fair trade. So I sent in .165 BTC to an address they provided through a lightbox as the Darkcoin (DRK) would take .164 BTC to trade 25 Darkcoins for.
The bottom of my dashboard shows the pending transaction, and for me, probably since my account was brand new, they put it through 6 transaction confirmation, so you’re looking at approximately one hour for your Bitcoin deposit to fund. But when the six transaction verifications are completed, the “Pending Transaction” didn’t immediately move to my account. There was an additional delay, and six verifications turned into ten, and then fifteen before it funded my Crypsty account. I started writing an email to Support after waiting for one hour, but as I was writing it, the BTC did arrive in the account. And the email support was very quick.
Now the Bitcoin (BTC) was in my account, and I headed to the Home Page, selected BTC/DRK, and traded Bitcoin for Darkcoin. The verification took so long that I could not buy 25 DRK anymore, but 24.9 Darkcoins. The charge for the transfer was 0.0004 BTC, and I got an email confirmation, and had the Darkcoin sent to my free Darkoin-e.com Darkcoin Wallet account. The cost of this transaction: $62.20 in Bitcoin, converted to 24.9 Darkcoins. Cryptsy’s grade from me: B-plus. The deposit in Bitcoin should’ve been faster, with less than 15 verifications, but they did everything else how you’d want it done.
Cryptsy shows that they sent the DRK to the address provided by Darkcoin-e.com. The Darkcoins did appear in my wallet there, but it took over 3 hours, which is pretty bad. And they did not respond at all to my message to their “Contact Us” page form, even with a standard confirmation e-mail saying they received my message.
PizzaForCoins.com failed to return Bitcoins to me after a cancelled order last month, so this isn’t that bad, in comparison. It seems digital currency security goes far beyond multi-sig/multi-facet authorization in your wallet. At least the conversion was completed in full. Total time invested to make this digital currency conversion & transfer for the first time: 5 hours 18 minutes.
So here I shared my first-hand knowledge, and hope others learn from my journey. Doing business online is like a box of chocolates. You never know what you’re gonna get. My advice is before you create a new wallet or use a new company or service, speak to someone who has walked that path before you. A previous user or a review would be wise to investigate. That’s why I spend the time, and Bitcoin, here to help you find out more about digital currency in the online marketplace.
Images from Wikimedia Commons and Shutterstock.
Last modified: October 3, 2014 12:37 UTC