Cryptocurrency exchanges are marketplaces for crypto traders and investors. Like the regular market, exchanges have to be organized and well designed for users to be able to navigate with ease when conducting their businesses/transactions. In that array, one of the most popular instant cryptocurrency exchanges that have caught the attention of most crypto experts is ShapeShift.
In this review, we will delve deeper into ShapeShift , looking at its usability, coins offered, transaction fees, security, as well as the pros and cons of the exchange.
ShapeShift is an instant cryptocurrency exchange that enables crypto users to buy or sell various cryptos (including altcoins) seamlessly. Erik Voorhees is the brains behind ShapeShift, which he founded in 2013 in Switzerland. Erick wanted to simplify the process of exchanging crypto, making a platform that would be easier and more straightforward to use as a vending machine. Since its launch, the platform has grown exponentially to now support 103 cryptocurrency pairs from the first 40 pairs.
Erick’s idea of a simple exchange platform was a prescient concept proved by ShapeShift’s fast growth. The growth is attributed to crypto traders who were seeking a platform to quickly and easily trade cryptocurrencies without leaving behind a digital footprint like with other centralized exchanges such as Bittrex .
ShapeShift gained immense popularity in the crypto space by being the only exchange offering users the ability to instantly trade cryptocurrencies without having to submit personal data to the company’s server. While this was a huge selling point allowing for anonymous trading , many users were concerned with the security of the platform.
Indeed, this feature was the platform’s biggest downfall as was the leading cause of the three security breaches experienced on the platform leading to loss of users’ coins. Nonetheless, ShapeShift overruled this feature in October 2018 and now requires users to submit some personal information to trade on the platform successfully.
Unlike other centralized crypto exchanges, ShapeShift offers a more natural means to exchange cryptocurrencies attributed to its user-interface that is quite easy to navigate. Users’ are simply required to provide the pertinent crypto address to exchange crypto after setting up an account.
Transactions are instant as crypto is not deposited on a centralized exchange. Instead, it’s relayed straight to users through a deposit address created by ShapeShift. With this, ShapeShift is a lot more like a non-custodial swap platform. However, note that ShapeShift only allows crypto-to-crypto exchange with users barred from exchanging crypto with fiat currency.
ShapeShift is available globally but blocked in some states in the US, including Washington and New York, due to regulatory issues. In August 2017, ShapeShift increased its business outreach by acquiring KeepKey – A Seattle-based hardware wallet. According to Voorhees, KeepKey’s acquisition was instrumental in reinforcing the company’s foot in the hugely competitive crypto market.
The new KeepKey hardware wallet seamlessly integrates cold storage asset management into the system, meaning that cryptocurrencies can also be swapped in ShapeShift from the hardware interface.
ShapeShift supports several significant cryptocurrencies and several lesser-known tokens including 1ST, AE, ANT, ATOM, BAT, BCH, BNB, BNT, BTC, CVC, DASH, DGB, DGD, DNT, DOGE, EDG, ELF, ETH, FOX, FUN, GNO, GNT, GTO, ICN, IOST, KCS, KNC, LINK, LTC, MANA, MCO, MKR, MLN, MTL, NMR, OMG, PAX, PAY, POLY, PPT, RCN, REP, RLC, SAI, SALT, SNGLS, SNT, SPANK, STORJ, SWT, TRST, TUSD, USDT, WINGS, ZIL, and ZRX.
ShapeShift doesn’t charge transaction fees but charges crypto mining fees instead. The platform makes a profit through the spread between the bid and ask prices of cryptocurrencies. Nonetheless, the fees charged on the platform have been quite controversial, with some users claiming that the transaction fees are expensive.
ShapeShift has refuted the claims stating that it only charges the miner’s fee, and therefore the charges differ due to different algorithms and hash rates. Below are some of the listed trading fees:
ShapeShift’s security reputation took a deep in 2016 following the hacking incident that saw the platform lose $200k. The CEO, Erick Voorhees, came out to give an honest explanation of the event stating that the hacking attack was an inside job. He also insisted that no clients’ funds were stolen. Following the incident, ShapeShift has reinforced the platform’s security.
In 2018, ShapeShift implemented the KYC/AML verification in an attempt to enhance users’ security. Also, with the integration of the platform with hardware wallets such as KeepKey, users can improve the safety of their coins by storing them offline. Indeed, ShapeShift has not been hacked since the security improvement; therefore, it’s safe-at least for now.
ShapeShift combines non-custodial functionality with ease of use to make crypto exchange seamless and uncomplicated. With over 50 supported cryptos, the platform is ideal for traders with a comprehensive portfolio requiring instant token swap. The fact that the platform supports anonymous trading is quite a selling point given that investors are moving towards anonymity with increased mainstream crypto-adoption.
In essence, ShapeShift is perfect for crypto traders looking to exchange digital assets and also settle payments with different cryptocurrencies. Nonetheless, the company needs to improve in particular areas of concern, such as enhancing security, clearly outlining the transaction fees, as well as the deposit or withdrawal limits.
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