What is Bitstamp?
Bitstamp is a European based cryptocurrency marketplace. It allows people from all around the world to buy and sell cryptocurrencies safely.
Having been around since the first generation of exchanges went online, we are now uniquely positioned to serve as a stepping stone between the traditional financial and digital currency worlds.
With Bitcoin, Ethereum, Litecoin, Bitcoin Cash and XRP (Ripple) trading now available, along with USD and EUR, we provide our individual and institutional clients an intuitive and engaging environment for trading. Safe, simple and secure to use, Bitstamp always puts its customers first. And that is why Bitstamp gets the stamp of approval from more than 3 million traders throughout the world.
Apart from the 28 EU member states, Bitstamp also supports close to 50 different countries outside of the EU. The main countries include Australia, Brazil, China, South Africa, South Korea and the U.S.
Is Bitstamp Safe?
Exchange safety is one of the most important questions for the user. Cryptocurrency exchanges are prime targets for hackers and we have seen quite a few examples recently from Mt Gox to Coincheck.
This is also a particularly touchy point for Bitstamp as they also suffered hacks in 2014 and 2015. In the 2015 Hack, the attackers managed to extricate 19,000 BTC which is actually one of the biggest cryptocurrency exchange hacks ever.
With that being said, is it still safe to use Bitstamp? Short answer: Yes
Although these hacks did happen, they were as a result of phishing attempts that managed to dupe exchange employees. They were not as a result of technological failures.
Moreover, it is important to look at the steps that the exchange has taken since then and how they have improved their security. Let’s take a look at some of the security policies of Bitstamp.
Exchange Wallet Security
Bitstamp uses some of the best practices when it comes to cold storage of their cryptocurrency assets. What this basically means is that they keep the majority of their coins off line in an air-gapped state.
This means that they inaccessible to hackers as they are not connected to the internet. These will only ever be accessed and withdrawn from when they are running low on coins that they keep in their “Hot Wallet”.
Hot wallets are those wallets that are connected to their servers and facilitate transactions for the users. In terms of the security procedures that are implemented in this case, they make use of advanced multi-sig wallets.
This means that these wallets can only ever send a transaction if they are signed by multiple keys. Essentially, there will have to be a number of staff at Bitstamp that will sign these transactions.
This is also why the hackers would not be able to steal funds again in the case of a phishing attempt. They would have to obtain all of the keys from all of the participants to sign out the transactions.
Of course, there is always the risk that user’s accounts can get hacked. Hence, Bitstamp has a number of features which protect users and decrease the chances of a hacker ever being able to compromise their accounts.
The most important of these is no doubt the two-factor authentication. This has become quite standard on exchanges these days and is an added layer of security. These are not required as default on Bitstamp so it is advised that you enable this.
Also, if ever you are to send funds out of your online wallets, Bitstamp will need confirmation via email as an additional security feature.
However, despite all of these protections that are put in place, you always want to use security best practices and never store a large amount of coins on the exchange. As the saying usually goes: “if you don’t hold the keys, you don’t own the coins”.
Lastly, because Bitstamp deals with sensitive information like identity documents and account passwords, they have to make sure that all of the communications are secure.
Hence, they make use of the most advanced standards in AES 256 encryption for connections to their server. You can confirm this by observing the green “SSL” padlock in your browser when you visit Bitstamp.
Moreover, when you are uploading your documents to the site then they are stored using PGP encryption. This means that even if hackers were to make their way into their servers your information is safe.
All of these security features mean that since the 2015 hack Bitstamp has been free of any further hacking instances, and is considered as one of the most secure exchanges.
Pros and Cons
- Advanced trading platform
- Bank wire transfers and bank deposits supported
- Have a selection of altcoins to trade with
- High liquidity
- Low Fees
- Regulated Exchange
- Support credit/debit cards transactions
- Support major fiat currencies
- Weak support
- Long waiting period for account verification
- Invasive KYC questioning
Bitstamp is one of the longest lasting Bitcoin exchanges, having weathered the beginning of cryptocurrency history, when it wasn’t even certain that cryptocurrencies could survive. Throughout the years it has positioned itself as a secure, reliable exchange for purchasing the top cryptocurrencies using fiat currencies.
With low fees and an easy to use interface, it’s a good chaoice for experienced, intermediate and beginning cryptocurrency enthusiasts looking to purchase Bitcoin, Ethereum, Ripple, Bitcoin Cash, or Litecoin.
Because the exchange is based in Europe and has a focus on European clients, it’s a great choice due to low SEPA transfer fees.
That said, this Bitstamp Review has found room for improvement.
For example, the exchange has room to add many more cryptocurrencies and fiat currencies. Adding an online chat feature could be an excellent way to stand out from the crowd of cryptocurrency exchanges that have eaten into Bitstamp’s trading volume over the past year.
Overall, Bitstamp is a good choice for those looking to buy and trade the major cryptocurrencies, especially for those located in Europe. As one of the oldest cryptocurrency exchanges you can rest assured that the team is reputable and trustworthy.