Cryptocurrency lovers around the globe are busy trying to turn their fiat into crypto. In order to
do this, fiat dependents, must use what is called an exchange. There are many exchanges across
the world. Some exchange crypto for other crypto. Some exchange fiat for crypto (and back).
Others do both! Litecoin Pat decided to conduct an experiment with two popular
cryptocurrency exchanges to determine what has the better user experience.
The experiment is between Coinbase (a very popular exchange) and ABRA (an exchange growing in popularity).
There are many other exchanges that exist across the globe but these two are quite popular
(especially in America). Other cryptocurrency exchanges such as Robinhood, GoldMoney, &
Circle Invest were not considered for this experiment. Why? Because those exchanges do not
allow you to send your BTC, LTC, etc. off of the exchange. You are forced to convert back into
fiat to get off the exchange. Crypto lovers what to keep their crypto without converting back
into fiat. Coinbase and ABRA allow you to send your crypto to a private wallet, which is a must
for security.
Below you will find the results of exchanging 10 dollars into Bitcoin. *Bitcoin was used instead
of any other altcoin (Litecoin is not an altcoin) for the simplicity of the experiment. Bitcoin was
purchased within a minute of each other. I do not think the spot price of Bitcoin changed within
that minute. The Spot price of BTC at the time was 6,233.01.
Coinbase – What’s nice about Coinbase is that I was able to buy BTC instantly. It appears to pull
from your linked ACH bank account. The purchase amount shows up instantly. You do not have
to transfer USD to your Coinbase USD wallet (although you can). What’s not so nice is that for
10 dollars it charged a .99 cent fee. The fee schedule changes with the amount of crypto you
buy and this experiment is using $10. Additionally, it takes 6 days (a long, long time) to be able
to get your crypto off of the exchange and send it to a personal wallet of your choosing.
That is a long time, and if your purchase is much more (let’s say $10,000) it might make you nervous to
hold your BTC on an exchange that may or may not use fractional reserves to “hold” your BTC.
The resulting Bitcoin from my $10-dollar purchase was .00144553 ($8.96). I should note that there will be a transaction fee when I do send it to my personal wallet. This applies to both Coinbase and ABRA and I am not sure if one will be more or not (my guess is it is the same).
ABRA – In order to purchase on ABRA you have to deposit USD (or other crypto including BTC
and LTC) from your linked ACH bank account. This process took me about 2 days. ABRA appears
to use an “Exchange Spread” in order to garner fees and profitability. The spot price for BTC
was 6,233.01 and the “Buy” price was 6,295.00. This is known as the exchange spread and
many exchanges use this practice. The fee seemed fair and was less than Coinbase. The
resulting BTC amount was .00158848 ($9.85). This amount was more than Coinbase. So ten
dollars turned into more BTC on ABRA than it did on Coinbase. Additionally, it only took the
ABRA exchange 5 hours in order for me to send my BTC off of the exchange. This is a huge
advantage, especially for larger purchases. The only downside was that it did take ABRA a
couple of days to deposit my initial 10 dollars.
There are other ways to purchase crypto on the ABRA exchange as well. For heavier fees they
do allow credit cards (MasterCard and Visa) and for a lesser fee (American Express). There are
limits to these amounts, but I thought I would mention it. As far as I know, Coinbase no longer
allows you to use credit cards to purchase crypto. Coinbase also appears to be more heavily
regulated, this may change in the future.
Conclusion
In my opinion the ABRA exchange was superior. Not only did my initial $10-dollar investment
result in more BTC, it allowed me to send the BTC off of the exchange faster. The buying and
moving experience was just better on the ABRA exchange. Both ABRA and Coinbase allow
purchases of other Cryptocurrency (this is a long list for ABRA and Coinbase), but both restrict
which coins can be sent off of the exchange. As far as I know, ABRA allows the following to be
withdrawn to a private wallet: BTC, LTC, BCH. Coinbase allows: BTC, BCH, ETH, ETC, LTC, ZRX
(not sure what this is), BAT (Basic Attention Token), and USDC (I think this is a stable coin).
It’s very important to send your crypto to a wallet where you hold the private keys. Without
being able to send the crypto off the exchange creates a certain amount of risk. The exchange
could collapse depending on what practices they use. ABRA allows you to send off quite quickly,
so I see that as an advantage. Things can change (for better or worse) but as of right now, I
believe that ABRA is the clear winner when buying crypto.
LITECOIN PAT