Is Poloniex a Scam? Some Things To Know
If you are looking into using Poloniex to exchange cryptocurrencies you might be suspicious due to all the scams in this rather new industry. But is Poloniex a scam? Or can you trust this place?
I got involved in cryptocurrency in 2015 and have used a good number of different sites over the years for both buying and exchanging currencies. Poloniex is one of the newer sites I’ve been using and in this short review I’m going to be covering a few things you should know before using this site.
- Website: poloniex.com
- Type: cryptocurrency exchange
- Recommended?: Kind of, more on this
Before I get started I just want to say that I am aware of others calling this place a scam online. However, I can only speak for myself and from my experiences with this site.
Poloniex is nothing more than a cryptocurrency exchange. You can’t buy Bitcoins, Etherium, or any cryptocurrency at the site. You only can exchange it.
They support exchanges for just about every cryptocurrency out there. Bitcoin, Etherium, Dash, Ripple, BlackCoin, Factom, LiteCoin, you name it.. they will exchange it more than likely.
I have been using this site recently to get Factom. Factom right now (June 2017) is hard to get. So what I’ve been doing is buying Bitcoin on other sites (LocalBitcoins, PaxFul, CoinBase, etc), transferring that Bitcoin to Poloniex, and then exchanging it for Factom. Its a ridiculous process and I loose a good bit of money with all the hoops I have to jump through but I am confident that it will pay off.
How It Works
You probably have a good feel for how this all works by what I just explained to you. But its pretty simple.
So in order for you to exchange cryptocurrencies you will have to have some form to exchange. In my case, I was exchanging Bitcoin.
So the first step would be to deposit the cryptocurrency you are looking to exchange into your wallet at Poloniex. Poloniex has a wallet for every cryptocurrency there is. Depositing your cryptocurrency there is very easy. You will just go to the name of currency you want to deposit, click “deposit” and up will pop the address you need to send it to.
Just send the cryptocurrency to that address from wherever you are holding it and you are done. That shouldn’t take long at all. It might be slightly delayed, 1-5 minutes or so, but I have never not received my coins.
After you have coins in a wallet you are ready to exchange for the desired currency.
To begin you will click on the big Exchange button in the top menu and then click on the cryptocurrency that you want to exchange for.
You will then be able to see the going rate for this exchange. The market is always fluctuating so these number are changing constantly.
I clicked on Factom and as you can see the exchange rate right now is 0.01049329 Bitcoins for 1 Factoid. To exchange all you do is enter the amount of currency you want to exchange for and click buy. Its as simple as that.
Note: In this example I don’t have adequate funds to buy Factum but this is just for example purposes.
After the exchange is complete you will then have the new cryptocurrency that you exchanged for in your wallet. You can then withdrawal it very easily. Just go to your wallet, click withdrawal, enter the address you are sending it to along with the amount, and click the withdrawal button.
What I Like About Poloniex
Fees are unavoidable. No matter where you go there are going to be fees no matter if you are buying, selling, exchanging, whatever.
At Poloniex the fees are low. It will only cost you 0.25% when you exchange. But the more you exchange the lower the fees get. They can go as low as 0.05% at the lowest which is pretty much nothing.
The entire exchange process is very simple and well laid out. The frontend interface is easy to follow and not complicated at all. You also don’t have to do a bunch of identity verification or jump through a bunch of hoops. Its simple. You deposit cryptocurrency, you exchange it, then you can withdrawal it if you want.
You can submit a support ticket anytime and get help with whatever the problem may be. This is an absolute must and Poloniex support is generally pretty good at helping out.
What I Don’t Like
This site is pretty well know for lagging behind. This is one of the most common complaints that I have as well as others. This can be a serious problem for some people and cause them to lose money.
You can read an article about a recent issue with server outages and over all lagging here.
Is Poloniex Safe?
The world of cryptocurrency is a risky game. There are no exchanges that I know of that are completely safe and there never will be.
Poloniex could do some things to make their site safer, such as move off of one centralized server, but they are “decently safe” I would say.
As I’ve said, I have never had any serious problems with them but then again I am not a big trader. I just use this site here and there for small transactions.
But to answer the questions is this place safe the best answer I can give is “kinda”.
Overall I like Poloniex and am a fan. It makes cryptocurrency exchange very easy and you don’t lose a bunch of money in the process. The fees are extremely low and that is very important to me.
Their fatal flaw is lack of security. People are starting to leave this site and look elsewhere because of the recent problems that they have been experiencing with outages and things of that nature. The problem is that there aren’t really another exchanges out there (that I’m aware of) where you have the ability to exchange so many types of cryptocurrencies.
Ultimately the choice of using this site is up to you. If you are making small transactions like me then give it a try. But if you are putting a lot of money on the line you need to be more cautious.
If you have any comments, questions, or concerns leave them below in the comment section and I’ll get back to you soon.