Everyone wonders if the world is ready for cryptocurrencies. But more importantly, are cryptocurrencies ready for the world?

More specifically, are cryptocurrency exchanges ready?

Buying on exchanges is practically the only way to get crypto right now (let’s not get into mining), so it’s a crucial element in the whole ecosystem.

How does a market economy work?

First, let’s remember what a market is supposed to do. A normal market (any market, not specifically crypto) is driven by supply and demand. The forces are more or less equal, and small fluctuations in one direction or the other is what we call the market.

But how has this looked for cryptocurrencies, up until recently?

People did everything they could to give away their money and get cryptocurrencies in exchange. Even despite significant obstacles:

Long and tedious KYC verification process — Know Your Customer, the process of verifying clients’ identities, required by the anti-money laundering regulations that govern these activities.

— Know Your Customer, the process of verifying clients’ identities, required by the anti-money laundering regulations that govern these activities. Actively turning down customers — Multiple exchanges just stopped registering new accounts. They couldn’t handle the inflow of customers. In short, they were saying: “Stop it already, we physically can’t take your money fast enough!”

Multiple exchanges just stopped registering new accounts. They couldn’t handle the inflow of customers. In short, they were saying: “Stop it already, we physically can’t take your money fast enough!” Barriers to entry — Verification tiers, minimum deposits in the thousands or tens of thousands of dollars, invitation-only markets, etc.

In the last six months, the cryptocurrency exchanges have just not been able to keep up with all the money being shoveled in.

They hired new people to verify accounts, and they never seemed to have enough of them.

They upgraded their infrastructure to be able to handle the traffic, and the next day it was 100% full again, even though it could manage 500,000 concurrent visitors.

Cryptocurrency exchanges were adding 100,000+ users per day, and probably turning away even more than that.

It’s an exciting and frustrating time to be a crypto exchange right now.

Crypto vs. E-commerce

To better understand how crypto will have to look once it becomes a more normal market, let’s compare cryptocurrencies and e-commerce. That may seem strange, but if cryptocurrency has the ambition to be ubiquitous, it needs to be at least as easy to buy and use as today’s e-commerce websites. If not easier.

E-commerce businesses compete for customers’ attention and their money. They use all the persuasion tools at their disposal because it’s a competitive market.

The main factors that influence a purchasing decision are:

E-commerce: factors influencing the purchasing decision

Price — Always the #1 objection. Always.

— Always the #1 objection. Always. Trust — Do I know them? Do I trust the company?

— Do I know them? Do I trust the company? Social proof — Do others use and buy this too? Who? How many? Do I know them?

— Do others use and buy this too? Who? How many? Do I know them? Scarcity — Is this a commodity or are there just a few items left?

— Is this a commodity or are there just a few items left? Urgency — If I don’t buy know, will it still be available tomorrow? Will it cost the same?

— If I don’t buy know, will it still be available tomorrow? Will it cost the same? Security — Is it secure enough for me to give them my credit card number?

— Is it secure enough for me to give them my credit card number? FOMO — Fear of missing out. If I don’t buy now, will I regret it in the future?

With e-commerce, most of these factors are of similar importance, with two exceptions: price is always the main objection, and FOMO is rarely a factor.

When buying cryptocurrencies, the driving forces are entirely different.

Cryptocurrencies: factors influencing the purchasing decision

Fear of missing out is the primary factor, price is a distant second, and the rest is much less critical.

That’s the way it’s worked for the last couple of years. But how will it look in the near future — 3 months, 1 year, 5 years from now?

The crypto craze has finally settled down a little. The sharp price correction of January-February and the regulatory crackdown have scared away many tourists and scammers, leaving behind a cleaner and slightly saner market.

There are more ways to buy cryptocurrencies now. People are focusing less on the fear of missing out, and starting to look at all the other factors. Soon, buying cryptocurrencies will begin to look very much like buying groceries online.

Exchanges, are you ready?

Right now, the biggest problem for the exchanges is to get more hands on board, to be able to grab all the money. That’s a nice problem to have, but it’s unsustainable.

When the dust settles, FOMO subsides, and the real supply and demand forces start working, where will the exchanges find themselves?

Will they be ready to compete for customers?

Will they be responsive to customer inquiries? (Try emailing one of the exchanges right now. There’s almost zero chance of any response)

Will they offer additional services beneficial to the customer? (“Taking your money” is not a service)

Will they be ready to replace the currency exchanges for fiat currencies, or even banks, as they aspire to do? Today no exchange is even remotely close.

If you aspire to usher in a new world order, you have to be better than the old one. And bring better tools to the game. The current ones are barely functional.

To create a new world order, the phenomenon needs to spread like a benevolent virus, instead of being the most difficult hurdle in the process.

For now, the exchanges are the centralized choke points, and there’s no way around them, so let’s have a look how they’re doing right now, when times are good for them.

Comparison of the crypto trading platforms

I’ll compare a few of the biggest exchanges at the moment: Binance, Kraken, Bitfinex, and Coinbase.

To keep this relatively brief, I’ll compare only the very first impressions and steps for each exchange:

Homepage

Registration process

Onboarding process (if any)

Clarity, simplicity, and effectiveness of the above

Binance

Binance is the largest cryptocurrency right now in terms of daily trading volume. They are also generated more than $200 million in profit in just their second quarter of existence. You would expect the market leader to have a stellar online presence, right?

Turns out, not necessarily.

This is Binance’s homepage. This is the first thing you see when you visit their website.