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Review and test of Crypto-exchange: comprehensive experiences with Bitfinex

Our Bitfinex-Wiki about API, how-to-buy and margin-trading, as well as deposit, withdrawal and modes of payment


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Review and test of Crypto-exchange: comprehensive experiences with Bitfinex (c): bitfinex.com Screenshot

16.01.2018

Bitfinex considers itself as the biggest exchange platform for crypto currency. Besides Bitcoin there are also  the most important altcoins supported, for example Etherum, IOTA, OmiseGO or Neo. We will show you everything, starting with the first steps, from the verification process till charge fees and with how-to-buy we will show you, how you can correctly buy.





Summary: Bitfinex at a glance

  • charge fee for registration / regular usage charge: no charge (free of charge)
  • trading charges: depending on trading volume between 0.10 and 0.20 percent
  • charges for crypto deposits: no charges
  • charges for payments: depending on kind of crypto currency, partly free of charge
  • API support: yes
  • security measures: high-class (2FA, U2F, email-encryption, payment-security), more than 99% of stock is stored offline
  • number of crypto currencies: 24 as well as US-Dollar and Euro
  • right for beginners and advanced users
  • verification: access without any verification for cryto currencies, verification for using Dollar and Euro
  • payment limit: no limit
  • languages: English, Russian, Chinese, Japanese
  • Margin and funding: supported
  • Update: Since January 2018 at least $ 10,000 must be added on Bitinex! More about this in the chapter: New Verification Level since January 2018

Registration

Bitfinex.com* has been existing since 2013. Exchange is situated in Hongkong. Because of this fact Bitfinex cannot be directly controlled by China and was not, unlike Chinese exchanges, forced to stop its tradings till October 2017.

 

Registration on Bitfinex takes just a minute: choose your username, email address and type in your password twice, that’s it!
Clicking on the link or submitting the Code ”o0ui9F5j1e“ you get 10% discount on trading charges within the first 30 days.

Bitfinex-Test © "bitfinex.com Screenshot"

We highly recommend using a password consisting of several upper and lower case letters and special characters.

 

After successful registration you can immediately access the trading platform of Bitfinex.

New Verification Level since January 1st 2018

Bitfinex would have almost collapsed in December 2017 - like many other exchanges worldwide - under the huge volume of new customers due to the high demand in Bitcoin. As Coinbase* (our test ), Bitfinex was temporarily unavailable or it took days until withdraws were made.

To better ensure the website stability in the future, Bitfinex has decided to implement a new activation equity requirement for all accounts created after January 1st, 2018.

This means that new customers are only allowed to trade, if they have reached the minimum capital of 10,000 US-Dollars!

It does not matter if the $ 10,000 threshold is reached with FIAT (Euro, US-Dollars) or cryptocurrencies, or a combination of both.

After reaching this minimum, an account will be fully activated. Subsequently, the deposit value of the account can also fall below this activation threshold without consequences.

Note: Existing accounts are not affected by these changes. This change only affects new accounts.

Further identification is only necessary if you want to pay - in addition to cryptocurrencies - with FIAT money (currently: US dollars or euros)! In this case, Bitfinex requires full verification by means of two identity documents as well as any invoice not older than 3 months. Then you can trade with FIAT money.

Due to high demand, it may take up to 8 weeks for the verification to be confirmed by Bitfinex.

There are no other limits.

Our evaluation:
Anyone who followed the strong rush of new customers in the media in November and December 2017 knew that even the big stock exchanges could not cope with that. Bitfinex is now pulling the emergency brake and tried by the exclusion of retail investors to stabilize their exchange. The minimum deposit of $ 10,000 is very high for newcomers - and for some probably too high.

It still has to be found out if Bitfinex will be able to hold on to this customer policy in the long term or if its competitors like Binance.com* our detailed review will go past the top dog .

In the long term, Bitfinex will have to get the investors back on the exchange. But as a top dog - and that's Bitfinex now - you can probably afford this procedure for a while.

Activation of 2-factor authentication (2FA)

Next step should be the activation of the 2-factor-authentification. This is only possible using a smartphone and increases the security of your Bitfinex account.

For activation click on the button “manage account” and then select “security”. Besides other features of Bitfinex, which we are going to describe more detailed in the “security” section, there is the “2-factor-athentification”.
Bitfinex supports “FIDO Universal 2nd Factor (U2F)”, “twilio” with SMS support and google’s “authenticator”.

Before you can, for example, set up “google authenticator”, you must download the app on your smartphone. The red plus activates your camera. Use this to take a picture of the shown QR-code. Setup on your  smartphone is completed now. Before you conclude the setup on Bitfinex with your first 6-digit number, we highly recommend to save the shown key! The key serves to reactivate your 2FA in case you lose your smartphone.

Bitfinex-Test © "bitfinex.com Screenshot"

Why do I need the 2FA?

Using 2FA confirms important processes (logins, payments etc) in your private Bitfinex account using a 6-digit code, which changes every 15 seconds.
This makes it hard for an intruder to cause any damage. It is not sufficient anymore, just knowing your username and your password. Additionally that person has to control your smartphone, and this is significantly more difficult.

Deposits and withdrawals, limits

As already mentioned, there are, unlike other exchanges, no limits of payment on Bitfinex. That means that you do not have to gradually identify yourself (this is what you have to do on Polonies, Bittrex or Kraken) to get daily, weekly or monthly increasing payment limits.

 

Our evaluation:

We can immediately and flexibly move our crypto-money. That’s the way it should be!

 


Deposit:

Who would like to trade has to carry out a deposit in the first place. Click on “deposit” in the upper right corner and choose the depositing currency. Afterwards click on “exchange wallet” and “click to generate address”.   

Bitfinex-Test © "bitfinex.com Screenshot"

This address is - similar to bank account numbers – now permanently connected to your account.  Hence you can transfer corresponding coins to this address.

On the right-hand side of the window under “deposit” you can check your latest deposits. Nice Detail: they also show, which payments are already under way and how many confirmations you have. This facilitates the overview.

 

Keep in mind: Every deposit is free of charge. The transaction fee is not received by the provider of your wallet, but the miners, who have to confirm your transaction registration it in the blockchain.

 

Withdrawals:

Withdrawals are carried out similar to deposits. For this click on “withdraw” in the upper right corner and choose the preferred crypto currency.

In the following menu you have to fill in the receiver’s address and the amount paid out, then you have to place the second tick. Afterwards order the payment with “request withdrawal”.

Bitfinex-Test © "bitfinex.com Screenshot"

Now your selection has to be approved by a 2FA code.
If you have set up the process under “security”, you have to confirm the payment a second time. For this open the received email and the included link. Confirm the payment in the new browser tab.

Keep in mind: All payments are free of charge. The transaction fee is not paid to Bitfinex, but the miners, who have to confirm your transaction by registering it in the blockchain.

 

Wallets

Right next to the button “withdraw” there is the tab “wallets”. Here you can get an overview about your own holdings. You can also move these with just a few clicks.

Our evaluation:
Bitfinex allows a comfortable Management of deposits and payments.

 

Modes of payment: paypal, FIAT-bank transfer, credit card?

Bitfinex*’s partner banks are situated in Taiwan.

Since mid-November 2017, it is finally possible to transfer US-Dollars and Euros to Bitfinex! The prerequisite for this is the complete verification by two identity documents as well as any invoice which may not be older than 3 months. Then you can trade with FIAT money.

Due to the high demand, it may take up to 3 weeks for the verification to be confirmed by Bitfinex.


Paypal and credit card payments are not accepted.

However, crypto-currencies can also be traded without any verification and without limit.

 

Our evaluation:
Bifinex has decided correctly:

If you only want to trade with crypto-currencies, you do not need verification, and you can remain completely anonymous.

Anyone who wants to trade with FIAT money (for example, in exchange for Bitcoin) can do so after completing the know-your-customer principles.

Thus, Bitfinex prevents illegal money laundering with FIAT money and at the same time allows direct entry into the crypto exchange without slipping into a legal gray area.

If you want to remain anonymous, we recommend that you buy Bitcoin save and easily on LiteBit.eu*, Bitpanda*, Anycoindirect*, Kraken or Bitcoin.de*. Afterwards you can exchange these coins on Bitfinex for Altcoins. How this works we have already described above.

Transfer times: How long does a transfer of Bitcoin or Altcoin take?

After requesting a payment you get a confirmation via email. Transfer times are also needed, i.e. minutes or hours, which accumulate until the receiver’s credit entry.
Withdrawal processing time takes between 10 minutes and several hours. The exact time depends on the usage of the network.

Charge fees

There are no regular charge fees for using the crypto-exchange Bitfinex*, i.e. there are no running costs per day or month. This is a standard and affects all crypto exchanges at the moment.

Costs, i.e. charge fees, arise for two processes:


1. Charge fees for crypto-trading (“order execution”)

The amount of fee depends on the traded amount (US-Dollar). The provider (“maker”) has to pay between 0.02 and 0.1 percent. Charge fees are cancelled with a volume starting from $ 7.500.
The demander (“taker”) pays between 0.1 and 0.2 percent of the amount of purchase.
This is the detailed list of the latest charge fees on Bitfinex.com:

Bitfinex-Test © "bitfinex.com Screenshot"

 

2. Charge fees for payments (“transaction fees”)

All payments are free of charge. Transaction fees are not paid to Bitfinex, but the miners who have to confirm your transaction entering it in the blockchain.

Bitfinex-Test © "bitfinex.com Screenshot"

 

Our evaluation:

The amount of fees is definitely fair, especially comparing it to other providers. This is a comparison of prices: Bitfinex vs Coinbase or Bitfinex vs Bittrex:

 

Bitfinex: 0.2 % (taker) 

Coinbase: 1.49 %

Bittrex: 0.25 %

 

Offer: Bitcoin and Altcoin

Bitfinex focuses only a few but most important crypto-currencies. Partly some of them can exclusively be bought on Bitfinex. At the moment you can find the following:

1.    Bitcoin (BTC)
2.    Litecoin (LTC)
3.    Ethereum (ETH)
4.    Ethereum Classic (ETC)
5.    Zcash (ZEC)
6.    Monero (XMR)
7.    Dash (DASH)
8.    Ripple (XRP)
9.    IOTA (IOT)
10.  EOS (EOS)
11.  Santiment (SAN)
12.  OmiseGo (OMG)
13.  BitcoinCash (BCH)
14.  NEO (NEO)
15.  Metaverse (ETP)
16.  Qtum (QTUM)
17.  Aventus (AVT)
18.  Eidoo (EDO)
19.  Bitcoin Gold (BTG)
20.  Streamr (DATA)
21.  QASH
22.  YOYOW
23.  Golem (GNT)
24.  Status (SNT)

 

The range on Bitfinex is significantly smaller than on Poloniex with 66 coins or Bittrex with more than 200 coins.

 

Our evaluation:

Bitfinex offers all important coins for trading. At first glance 24 different crypto-currencies do not seem to be that much. But this does also mean that Bitfinex concentrates on quality rather than quantity. According to our opinion the offered coins are the most important on the market, since they distinguish themselves because of mainstream fame and technology behind them. We keep most of these coins ourselves and are convinced that these will be of importance in the future. With IOTA and OmiseGO Bitfinex has the trading monopoly for crypto-currencies of the next generation.

Security and hacks

In 2016 Bitcoins worth $ 72 million were stolen, as a consequence the Bitcoin rate dropped worldwide by 20%. Bitfinex could successfully compensate the damage and pay back the losses to the users until April 2017. No deposits were lost. This customer policy is unique. We do not know any other case, were an exchange acted this customer friendly.

To prevent another accident like the one in 2016, Bitfinex offers all possible methods to offer a maximum security level. The most important approach: more than 99% of all crypto deposits are not permanently online but are kept offline. This is why they are protected against unauthorized access.

Bitfinex also offers another security measure, namely setting up IP- and payment-whitelists and sending emails as encrypted messages.

As mentioned above, 2FA is obligatory to be able to use all functions of the website.
The user has to authorize payment request of unknown IP-addresses via email, payment requests through new IP-addresses can also be blocked for 24 hours.      

Bitfinex-Test © "bitfinex.com Screenshot"

Our evaluation:

Since 2016 Bitfinex has been progressing and offers security, not only as far as servers are concerned but also for individual customers, which is entitled to expect.  As with any other exchange there remains a risk, because there is no absolute security. We recommend those, who want to be absolutely safe, to save their crypto-deposits offline in a so called cold-wallet. We have already tested Exodus and Ledger-Wallet, for example.

API

Bitfinex offers full support of the programming interface API (= application programming interface). The APIs allow the user to access automatically all functions of the Bitfinex website, for

  • checking current and past account information (e.g. account balance). Moreover:
  • writing and reading of orders
  • writing and reading of margin trading and funding
  • writing and reading of payments

Additionally open source integration and libraries like Go, Node.js and Ruby are supported.

 


Our evaluation:

Outstanding! With these enormous possibilities of API, users can also use their own or other platforms locally, online or with an app.

We recommend at this point the funding-bot Coinlend and the analyzing tool Cointracking*.

 

How-to-buy: how does margin trading work on Bitfinex?

Buying Bitcoin or Altcoin is kept simple. Bitfinex itself is not the buyer, but only offers the platform. Sellers and buyers are website users.

 

Step 1:

Make sure, that a sufficient amount of Bitcoin is available in the wallet. This amount is to be kept under “exchange”.

Apart from crypto-currencies you can also exchange for US-dollar, although deposits in US-dollar, as mentioned above – at the moment and until further notice, are not possible. We recommend buying Bitcoin for FIAT (US-dollar, euro) and then transferring to Bitfinex. You can partly exchange for Ethereum.

 

Step 2:

In the upper left corner check “trading”. Here trading pairs are displayed, which can be exchanged.

 

Step 3:
Choose a trading pair clicking on them.

 

Step 4:

“Order form” shows you price per Altcoin in Bitcoin. Right next to it you can fill the wished amount of Altcoins into the empty box.

 

Step 5:

Afterwards you can click on the green button “exchange buy”.
The offer is now published and usually within a few minutes automatically processed.
In case this does not work, it could be because of the price rising and that you want to buy too cheaply. Price can be customized under “positions” respectively “orders”.  

 

Step 6:
The recently bought coins can now be found under “wallet” and they are available.

Bitfinex-Test © "bitfinex.com Screenshot"

Margin Funding

We can recommend another function of Bitfinex: margin funding. With this you have the possibility, to lend your crypto-currency to the highest bidder for the next 2 to 30 days and to get interest in return. Depending on the crypto-currency there can be expected from 1% to 100% per year. If you own the desired coins you can earn a fortune.

From a technical point of view the process is identical to margin trading.
But this procedure is laborious.

Our tip:
Using API-technique a bot takes over the lending automatically around the clock.

Advantages and disadvantages

Bitfinex therefore offers a lot of advantages but only few disadvantages:

advantages disadvantages

fast registration (1 minute)

FIAT-money payments

     after verification possible

no identification needed

no limits for transactions

high security

surface is easy to use

margin trading and margin funding

API-support

App-support

only 24 coins in offer – but the most

     important ones

no payment with paypal and

     credit card possible

Conclusion

We are fully convinced of Bitfinex.com*: The operators could redress the hack in 2016 and fully compensate the customers and their deposits which were given up for lost. This is very exemplary!

Bitfinex offers all important Altcoins and used to give its customers all new tokens when there was a hard fork – many other exchanges did not do that.

The website convinces through easy handling as well as various usage of APIs. Using the funding function users can profitably invest their crypto-money.

Also the charge fees are – comparing them to other providers – nicely low.

With the new option of paying in US-Dollars and Euros, Bifinex is the best exchange in the world in our view.Try it! 



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Bitfinex is one of the largest and best known crypto currency exchanges. Bitfinex offers good features, a wide range of crypto currencies and fair prices.

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