Whether all these new exchanges are worth trading with is another question entirely, which is why we need to take a closer look at the development of the exchange, its safety features, its customer service, and potential growth prospects for the long term.
Today I want to take a closer look at one of the newer cryptocurrency exchanges – Kucoin.
Kukoin Review: Founding and History of Kucoin Exchange
Kucoin, a Hong Kong based cryptocurrency exchange, almost literally burst on the scene last August, and has made impressive strides since.
While the Kucoin exchange is one of the newest exchanges, and was officially launched in August 2017, that is somewhat misleading. Yes the research and development team was only assembled in May 2017, and yes it is true that Kucoin received angel investment money just 5 days before going live in August 2017, but there’s far more history behind Kucoin than that.
The Kucoin team of executives and leaders have been studying and learning the cryptocurrency space from the ground up since 2011. The technical architecture of the trading platform was developed all the way in 2013. Since that time the team has been perfecting the exchange and developing ways to deliver exceptional customer service. Once that was achieved they launched the product.
Since August Kucoin has seen exceptional growth, thanks in part to the Kucoin Bonus Plan and through the rapid addition of new cryptocurrency pairs.
Future plans are equally aggressive and if achieved could see Kucoin as one of the top exchanges within two years of being released.
June 2018 – Kucoin plans on releasing a cryptocurrency pair self-releasing feature.
December 2018 – 1,000+ cryptocurrencies should be listed by December, and the daily exchange volume is expected to be 100,000+ BTC.
June, 2019 – They’re aiming to be one of the Top 10 worldwide cryptocurrency exchange platforms.
Kukoin Review: Creating an Account at Kucoin
The next screen presents you with a form asking for your email address, and a password (as well as confirmation of the password). Note that the password requires both uppercase and lowercase letters, as well as at least one number. There’s also a line for a referral code if you have one, but that is optional. Fill out the fields and click the “Next” button.
You should receive an email from Kucoin within a minute with an activation link. You simply click that link and it will open the Kucoin platform and take a second or two to verify your email and you’re all set. Because Kucoin is a cryptocurrency only exchange all that’s required is email verification.
I did note that KYC validation is a possibility once in your account, so it’s possible the Kucoin team is working on integrating fiat currency deposit/withdrawals in the near future, but for now it isn’t required.
Once you’re in your account you’ll also see a link to set-up 2-factor authentication, which you should do for security purposes.
Kucoin Trading Platform
Currently the Kucoin trading platform has support for 135 different BTC pairs, 131 ETH pairs, 17 NEO pairs, 14 USD/Tether pairs, 8 KCS pairs, and 7 BCH pairs. That’s great growth for an exchange that is less than a year old, and if you watch you’ll see that they are adding new coins at a furious pace. They claim 1,000+ cryptocurrencies will be listed by the end of 2018, and at the current pace they will almost certainly get close to that goal, if they don’t actually meet it.
As you can see the charting for Kucoin is fairly robust for a new exchange. You have the chart itself, which has time settings for 1, 5, 15 and 30 minutes as well as 1 and 8 hours, 1 day, and 1 week. There are the order books to the right, and a market depth chart in the lower left corner. In the lower right corner are the areas for buying and selling.
You also have access to roughly 60 different indicators, which should cover all but the most hardcore technical traders. Missing is the ability to draw your own lines.
Charts are provided by Tradingview.
Kukoin Review: Trading Fees
One of the major selling points at Kucoin is the low fees charged to clients, both for trading and for withdrawals. There are no fees for making deposits, and trading fees are a very affordable 0.1%, based on your purchased asset. Withdrawals do come with fees, and these fees are dependent on which cryptocurrency you’re withdrawing.
That said, these fees are quite low when compared with other exchanges. GAS and NEO are free of any fees and for BTC withdrawals you’ll pay just 0.0005, while the LTC withdrawal fee is 0.001 and Ethereum withdrawals cost 0.01. A complete list of fees can be found here.
Withdrawals are very speedy too, with withdrawals for less than the fee times 100,000 taking only seconds. For example, a withdrawal of less than 50 BTC will be processed in seconds. Larger withdrawals can take longer to process, but typically they are processed in under 10 minutes.
Not only are fees extremely low at Kucoin, but they only retain 10% of the fees themselves, returning 90% of the fees to users. 50% of all fees are paid as a dividend to holders of KCS in their accounts, while 40% are used to pay the Invitation Bonuses.
One special feature is that all clients who hold a minimum amount of KCS in their account get a 30% discount on trading fees. That is pretty generous and if you do a good bit of trading you can see a pretty good savings, although trading fees are already lower at Kucoin than what you’ll find at most other exchanges.
Is Kucoin Safe to Use
Of course safety is a primary concern when using cryptocurrency exchanges, especially since they are currently unregulated. No one wants their investment to simply disappear from their exchange, nor do they want to learn that their private information has been compromised.
With Kucoin being so new it hasn’t suffered any hacks to date, but then again with Kucoin being so new it hasn’t had much time to be subjected to hacks. Time will tell if this is because it is secure, or has just been fortunate so far.
One huge positive about Kucoin is the way in which they’ve implemented both operation-level and system-level security features.
The operational-level security standards have been created by Kucoins internal risk control personnel. This includes strict production data operations and usage standards which required multi-level review and approval. These review processes check that all online data and core data undergo desensitization processes to help ensure security for the end user.
At the system level the security standards have been built following the same standards used by banks and other global financial industry participants. Industry-standard transfer encryption protocol has been applied to data transfer layers which ensures that user data, and any other sensitive data, is stored through bank-level data encryption techniques. Two-factor authentication adds an additional layer of security from the log-in, to trading to withdrawals.
Kukoin Review: The Kucoin Token (KCS)
The Kucoin token (KCS) is an Ethereum based ERC20 token that works with all Ethereum wallets.
The Kucoin token was issued on September 2, 2017 and the first phase was issued under a lock-up period of four years ending September 2, 20121. In addition, the founders cannot sell or assign their holdings until September 2, 2018. Angel investors and consultants have a two-year lockup period ending September 2, 2019. Any KCS sold during the initial offering has no lockup period
There was a total issuance of 200 million KCS, with 35% issued to the founders, 15% issued to angel investors and consultants, and the remaining 50% sold during the ICO. There is a buyback clause in effect that will see a minimum of 10% of each quarter’s net profit allocated to buying back and burning KCS until there is a constant 100 million tokens remaining.
Additional Kucoin Token Benefits
Holding the Kucoin token comes with a bonus award that amounts to half of all the trading fees collected by the exchange. While that sounds like it could get very generous if the exchange becomes extremely popular, the bonus award percentage is open to future adjustments.
Holders must have the KCS held within the Kucoin platform to qualify for the bonus. This is different from the award scheme of other exchanges such as COSS, which allows you to hold you coins in any wallet and still collect your bonus.
If you hold a minimum number of KCS in your account you can take advantage of a 30% reduction in trading fees. There are also plans on adding additional perks for KCS holders, such as premium customer service, 1-on-1 investment consultations, and other premium services.
Kukoin Review: Features
KuCoin has some of the lowest fees of all cryptocurrency exchanges, especially for those receiving the 30% discount for holding KCS in their account.
Deposits rarely take more than 10 minutes and withdrawals under 50 BTC are transacted in seconds. Larger withdrawals may take up to 10 minutes.
The Kucoin exchange was created with industry standard banking level security.
Hardcore Trading Engine
Kucoin has been successfully tested up to 2 million order requests per second, making it the fastest and most robust cryptocurrency trading exchange currently available. This will allow for instantaneous transactions even during heavy trading volume periods.
Though Kucoin is less than a year old it already has sufficient order volume to match all orders in real-time. The exchange currently processes roughly $35 million per day or 4,000 BTC in transactions.
In addition to the 30% discount of trading fees for KCS holders, Kucoin is constantly holding other promotions and bonus offers for various coins. They are also known to launch bonus offers for new sign-ups from time to time.
Kucoin has a mobile app for both Android and iOS that provides on the go trading. On the downside it isn’t available from the Apple AppStore or from the Google Play store, but has to be downloaded from the Kucoin website.
Kukoin Review: Customer Support
Kucoin bills itself as a client-centric exchange, so the answer to this question is very important. The truth is that they do meet their stated goal of being client-centric, and are very responsive to customers.
Their support team is available 24/7 any day of the week, and they have support in 11 different languages. Additionally, unlike many of the cryptocurrency exchanges, they not only have email support, but also have online chat support – of a sort.
The online chat is a bot rather than an actual human, but it can be very helpful in directing you to the proper place to find answers to your questions. Otherwise their email support team (which can be reached at email@example.com)responds within 24 hours.
In addition they have a well developed question and answer section of their site that answers all the basic questions you might have about registering, using the exchange, or making deposits/withdrawals.
With customer support being a major sticking point for most of the major exchanges it is good to see Kucoin taking a proactive approach to providing some of the best customer support in the industry.
Downsides to Kucoin
Although they may try, no exchange is perfect, and Kucoin does come with some negatives. Read on to learn what you might want to look out for if you decide to trade with Kucoin.
1. While this may not turn out to be a negative, the fact is that Kucoin is a very new exchange. It hasn’t been fully tested in the real world in terms of security or its ability to handle large volumes of transactions. While the testing performed so far indicates that Kucoin will pass both hurdles easily, we just don’t know until the exchange has been in operation for a longer period of time. The newness of the platform also means there could be limited liquidity for some pairs, although the exchange has said it can handle all open orders with its current order book.
2. Currently Kucoin is a crypto only exchange, and has no facility to accept fiat deposits, trade fiat pairings, or issue fiat withdrawals. That may change in the future, but for those just getting started in cryptocurrencies this may not be the most user-friendly setup as it requires depositing fiat elsewhere and then transferring cryptocurrency to Kucoin for trading purposes. It’s not a huge hurdle, but it is enough to keep those brand new to crypto from using Kucoin.
Kukoin Review: Conclusion
The cryptocurrency exchange space is becoming increasingly crowded, and newcomers need something special to stand out from the crowd. While Kucoin has made great strides already since its launch last August, it is still too early to tell if it will become a major contender, or will fade into the background as a has-been.
Certainly the team leading Kucoin is very knowledgeable, experienced and even talented, but that doesn’t mean they will succeed.
That said, their growth strategy has worked very well so far, and if they can continue to meet the goals on their roadmap they could have a very good chance at becoming a major player in the cryptocurrency exchange space. Their attention to customer support certainly helps in that regard, although the lack of support for fiat currencies could be too big a hindrance to overcome.
Their competitive fees and aggressive marketing strategy are also in their favor, helping them grow more quickly than they might otherwise. And let’s not forget the speedy transactions, deposits and withdrawals. These are all increasingly important to the developing cryptocurrency exchange wars that are brewing.
At the end of the day it will all be about execution. So far Kucoin has shown that it can deliver, and if it keeps doing so it might have a bright future.