Binance vs Kraken: A Full Review & Comparison Guide in 2021

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You are new to crypto. Your friend has just convinced you that Bitcoin and cryptocurrencies are the future, and you are now trying to get your hands on some of that ‘digital gold.' It's supposed to be an easy process: find an exchange, transfer your fiat money from your bank to the exchange, buy some Bitcoin and/or other cryptos, transfer them to your more secure wallet and get out.

Easy, right?  Well, not quite.  As you probably already experienced, you instantly hit a brick wall by the staggering amount of exchanges out there, both local and foreign.

Worse, you are told that each exchange has its benefits and drawbacks, making it a bit overwhelming to choose which exchange is the right one for you. Well, fortunately, this article can help a bit in your decision.

This article will focus on two of the most popular centralized exchanges out there; Kraken and Binance. We will take a look at what their competitive advantages are, their drawbacks, and how they can benefit you in helping you get some of the sweet digital gold.

Binance vs Kraken Comparison Table

To help get a visual understanding, below is a comparison table of the two exchanges:

BinanceKraken
Binance
Kraken
binance exchange
Supported Cryptos: 202Supported Cryptos: 49
Fees: 0.10%Fees: 0.26%
Withdrawal Fees: 0.0005Withdrawal Fees: 0.0005
Software Support: Web browser. desktop client, mobile applications Software Support: Web browser, mobile application
Active Since: 2017Active Since: 2011
Ease-of-Use: ComplexEase-of-Use: Easy

 

Main Differences

There are several main differences that stand out between the two exchanges. Firstly and the most obvious one, Binance has its own cryptocurrency, called BNB. This utility token is for its rapidly developing ecosystem.  Yes, Binance is not just a simple exchange. 

It has its own blockchain where dApps are already in place and are gaining in popularity, so much so that the BNB token saw a rapid rise in price.  Kraken does not have its own cryptocurrency or its own ecosystem.

Secondly, Unlike Kraken where it is based in the US and thus, is accessible to Americans, Binance is not. Moreover, although it is technically based in Malta, no one really knows. Nevertheless, Binance did make an extension of its exchange platform specifically for Americans to trade, called Binance US.

Another difference has to do with how many cryptocurrencies they have listed on their trading platform. Currently, Binance lists more than 290 different types of cryptocurrencies, including many new and promising initial coin offerings. Kraken, meanwhile, only lists 53 different types of cryptocurrencies.

Another difference has to do with their easy-to-use feature. Unfortunately, because of its many features and multiple trading layouts, Binance can be a bit confusing for those who are just entering the crypto market, or even those who have no prior experience in trading. Kraken on the other hand, has been known to be very easy and simple to use.

A final difference is that Binance acquired the Trust Wallet, a multi-currency, non-custodial wallet. It has quickly become one of the most popular and trusted wallets out there.  Kraken does not have its own.

What is Binance?

Binance was founded in July 2017 by Changpeng Zhao. Since its inception, it quickly became one of the most popular exchanges worldwide. It boasts to have a $2 billion average daily trading volume and more than 1,400,000 transactions per second.

All this and no one really knows where their headquarter are. Like Bitcoin, its origins are mysterious. However, that doesn't mean the exchange is shady in any way. Quite the contrary. It is not only a very popular exchange but also has a growing ecosystem of its own, enough to perhaps rival Ethereum. Not only that, its team and many employees have not really been hiding. Many, including Zhao, are well known throughout the crypto community and have made public appearances.

Although the exchange platform was launched in 2017, the initial coin offering (ICO) was actually conducted back in 2013. Its crowd sale reportedly made $15 million USD after selling 100 million of its own token, BNB.

Features

As mentioned previously, Binance has its own native token, BNB, that powers its ecosystem. The BNB was used for activities such as trading, withdrawal fees, and listing.

Binance currently charges a trading fee of 0.10%, but you can get a 25% discount if you hold BNB, or 55% off if you hold its token, as well as refer a friend to the exchange.

Binance has also been renowned for its order book pricing and high liquidity of tokens. It has a unique mechanism that allows it to do more than a million transactions per second while also maintaining relatively high liquidity of its token in order to prevent high price slippage.

Another interesting feature is Binance Labs, its own technical incubator that focuses on identifying, providing funds to communities and investing and providing advice to startups, and listing promising ICOs.

Binance is also well-known for having multiple platforms, providing flexibility to millions of its customers.  It is available on Andriod, iOS, and web interface. The exchange also offers multilingual support for 13 languages including Vietnamese, German, Russian, Turkish, Portuguese, Italian, Korean, Chinese, French and English.

Trading Fees

Trading fees are no doubt a deal-breaker for many traders. No one is willing to pay high fees on an exchange, no matter how popular or how known it is. That being said, you can be thankful to know that Binance offers relatively competitive fees.

Binance charges a standard 0.10% maker/taker fees. Also, you get to pay 0.0005 BTC for withdrawal. To get funds from the exchange, you can either make use of the option of credit cards or cryptocurrency. You cannot get funds through wire transfer, nor can U.S. investors able to get funds as well.

Security

When it comes to security, Binance takes this matter seriously. It firstly makes use of a two-factor authentication (2FA) for users. When you first set up your Binance account, you will be asked to install and set up your 2FA. This is the first line of defense against hackers, and it is highly recommended that you use it. However, this is by no means the only security feature.

If by any chance Binance detects suspicious activity, such as any login attempts from a device or IP address that was not previously used, an email confirmation request will be sent. You can also set up your account to receive email confirmation requests for other actions such as withdrawals.

Binance also has addressed whitelisting, which allows you to set it up so that you only send funds to one single address. This adds further security if the system picks up the sudden change in the address. You can change it any time, although you will have to go through a serious security process first.

To ensure maximum security, Binance keeps 95% of all coins in an offline, distributed cold storage. It only keeps just enough funds on the exchange to allow purchases and trading.

A somewhat unique feature is its Secure Asset Fund for Users (SAFU) reserve fund. In the event of the exchange ever suffering a hack, it would use these funds to compensate any client who was a victim. The funds are collected by taking 10% of all trading fees that the exchange generates.

Unfortunately, the exchange did suffer such a hacking attack back in May of 2019. The thief took off with 7,000 Bitcoins, worth $40 million at the time. Thankfully due to the SAFU reserve fund, the exchange was able to compensate all those who lost money due to the hacking.

Review

Being one of the largest exchanges, coupled with having its own thriving ecosystem and token, Binance is fast becoming a popular stop for both newcomers and experienced traders. Whether it is to simply purchase Bitcoin or other cryptocurrencies, or if you wish to make passive income by participating in its ecosystem, Binance offers a wide variety of products and services.

However, that is not to say it does not have certain drawbacks. The exchange can be a bit intimidating, if not overwhelming, for users just entering the crypto space.

In addition, like any other centralized exchange, in order to properly utilize the exchange's services, traders are required to comply with KYC (Know-Your-Customer) and other anti-money laundry (AML) requirements beforehand.

Binance Pros
  • Huge selection of services and applications beyond just an exchange. High scalability potential, with low fees.
  • A large number of trading pairs and good liquidity.
  • Plenty of options for deposits and withdrawals for both fiat currencies and cryptocurrencies.
  • Low fees for deposits, withdrawals, and trading, alongside the ability to earn discounts by holding BNB tokens.
Binance Cons
  • The user interface is complex and not very friendly for beginners.

What is Kraken?

Kraken is an older cryptocurrency exchange that was founded in 2013. With a vision of providing a safer, fairer, and more secure place to buy and trade cryptocurrencies, it learned from the lessons of the famous Mt. Gox hacking scandal that rocked the young crypto market in 2011.

In the beginning, only Bitcoin was being traded, but it soon added Ethereum to its list in 2015. Other altcoins rapidly began to be listed, and more and more people flocked into the crypto space and began searching for exchanges that provide authentic, safe, and secure trading places.

Making security a top priority, Kraken assembled a crack security team with decades of experience in building security programs with sensitive data is strictly controlled. It's a rather impressive security system that has attracted many traders, banks, and other financial institutions to do business with the platform.

Features

Kraken currently lists 55 cryptocurrencies. The exchange is open 24/7, allowing traders from different time zones to buy and trade. That being said, it offers its services worldwide, except in certain countries. Citizens currently living in these countries below are prohibited from registering:

  • Afghanistan
  • Cuba
  • Iran
  • Iraq
  • Japan
  • North Korea
  • Tajikistan

In addition, Kraken does not offer its services to Americans residing in the state of Washington D.C. and New York.

Unlike other exchanges, Kraken has customer service support ready at hand 24/7.

In order to comply with KYC and AML regulations, the exchange requires all users to provide information about themselves. However, document verification is only required for fiat currency transfers or trading. No document verification is required for cryptocurrency transfers or trading. That being said, Kraken has verification levels that allow or restrict users on what they can do based on how much information they provide.

There is the basic ‘Starters' level, then the ‘Intermediate' level, and finally, the ‘Pro' level. For a complete list of what each level requires, please click here. To view what exactly each level allows you to do, please click here.

Another feature offers to clients is staking.  Currently, you can stake your Polkadot, Ethereum, Bitcoin, Tezos, Kusama, Kava, Flow, Cosmos, and two fiats; Euro and US dollar.

Trading Fees

Kraken has a unique trading fee when compared to other exchanges: depending on your trading volume within the les 30 days, the maker and taker fees can vary between 0.16% – 0.26%, respectively to almost zero. This is called a fee schedule. Below is the trading fees chart per trader volume:

Binance vs Kraken

There is also a fee schedule for FX pairs and stablecoins, as indicated below:

 

When it comes to depositing funds into your account, you have the option of either depositing cryptocurrencies or fiat currencies.  When it comes to fiat, Kraken currently supports  USD, EURCADAUDGBPCHF and JPY.

It should be noted that this information may change in the future. To get accurate information, you will need to log into your account and navigate to the relevant funding page to view which fiat currencies you are able to deposit. In addition, all first-time fiat deposits will be subject to temporary (72 hours) withdrawal hold in your account. There is also a deposit fee that varies between different types of fiat.

Security

Security is Kraken's #1 priority. One of the ways that they ensure security is through its Bug Bounty program. As the name implies, Kraken offers anyone the chance to find vulnerabilities or bugs in its system. Researchers would have to submit a report to Kraken for review and if it is consistent with their policy and verifies the risks, the researchers are rewarded for their efforts with Bitcoin. For a full, detailed explanation about the program, please click here.

Furthermore, its servers are under constant 24/7 surveillance by armed guards and video monitors. Physical access and code deployment are strictly controlled.

The exchange also employs its own expert penetration team to test out its safety mechanisms at every angle. Should they find any vulnerabilities, Kraken immediately fixes it.

The exchange also has 24/7 customer support in case of any issues, concerns arising throughout the day.  However, some have criticized it for its slow response time.

Review

All in all, Kraken provides many advantages over other exchanges. Although it may not have its own thriving ecosystem and native token, it nevertheless offers features that are sorely sought after such as staking rewards, and quick and easy access worldwide.

It also offers a flexible fiat deposit with somewhat relatively low fees (depending on your trading volume). Additionally, to add another badge, the exchange has never been hacked.  

Yet, it still possesses certain drawbacks. It does not contain a high amount of different types of cryptocurrencies.  This means that if you are looking for that rare hidden ‘gem' or new crypto coin that supports a promising project, you would most likely not find it in Kraken.

Kraken Pros
  • Professional Trading Platform.
  • Security is their #1 concern: has never been hacked.
  • The exchange is user friendly.
  • High liquidity.
  • 24/7 support.
Kraken Cons
  • Only supports 55 cryptocurrencies.
  • Does not have a full-fledge ecosystem of its own.
  • Varying fees.

Binance vs Kraken – Conclusion

In conclusion, both Binance and Kraken offer many advantages and benefits. Yet ultimately, it all comes down to which exchange is in line with your goal and strategy. Are you looking for a rare crypto that just came into the market, or do you have your eyes set on an already established, well-known crypto?

Are you interested in an exchange that not only provides a platform to buy and trade cryptocurrencies but also has its own ecosystem that you can easily participate in from within your own account? Then, Binance would be your choice.

Or, are you looking for a highly secured platform that is not only more easily accessible to US residents, but also offers you the chance to stake and earn passive income? Then Kraken would be your best bet.

Is having customer support ready and available 24/7 important to you? Or are you an entrepreneurial startup team that is looking to obtain advice and funds for your own crypto project? Are you a bit concerned about registering with an exchange where nobody knows where its headquarters are? Or are you searching for a platform that is providing a cheaper and more profitable DeFi service than Ethereum?

Or, are there other exchanges besides Binance and Kraken?  What do they offer? These are some of the questions you need to ask yourself.

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