Bitstamp vs. Bitcoin Central: Euro exchanges compared

Now that MtGox is well dead it's time to consider some alternatives for cashing out your Bitcoins. If you're in Europe you'll want to register for an exchange that will do a SEPA transfer to your bank account. Two of the major players in this market are Bitstamp and Bitcoin Central. I decided to try both.

The first step after registering is getting yourself verified, so they'll allow you to play with larger amounts. For both exchanges this involved putting your identity at risk by submitting a copy of your passport (or other form of identifying document) and a proof of address which can't be an electronic bank statement. This is a huge WTF, but one that you're going to have to accept if you want to work with Bitcoins.

Since I didn't have any non-electronic proof of address, I had to get my local government to issue a document stating my name, address etc. With this, Bitstamp approved my verification request in 3 days. Pretty damn snappy considering it's a human process. Bitcoin Central took 5 days initially, but then rejected my proof of address document because, according to the document, I was living in with my parents, and I would need to provide copies of my parents' passports as well. That's where I draw the line, though. It's one thing putting my own identity at risk, but asking me to share other people's identities is just a tad over the top. Fortunately, after a bit of back-and-forth in Bitcoin Central's ticketing system, explaining my situation, they came around to my position. They were also quite clear on the website how they securely treat people's documents. Due to this mishap the verification on Bitcoin Central took an additional 15 days for me.

On to depositing bitcoins; on both exchanges it  took less than 2 hours between sending the coins and receiving the confirmation. Yay digital currency! The next step, trading in the bitcoins for old-fashioned money, is where the process starts to differ. Bistamp functions in much the same way as MtGox did: you can place an order that will keep on buying or selling BTC depending on whatever the highest/lowest bid is, much like MtGox used to do. Bitcoin-Central on the other hand only lets you place an order for a specific price. As I am very much a beginner at trading, it was unclear to me what would happen if I placed an order for a lower price than the highest bid: would it fulfill the highest bid at the bid price or at my price? So I chose the safe way out and made several trades until I manually exhausted the highest bidders.

The last step is cashing out: since my bank account was already verified on both exchanges, all I had to do was make a withdrawal and wait. Bitstamp trades in USD internally so there's a (small) extra fee to convert to EUR. With Bitstamp it took 3 days for the money to arrive. With Bitcoin Central I had to open a support ticket first, as my daily withdrawal limit was set too low. This took 2 days: one to open the ticket and another to wait 24 hours for the limit to increase. Then the actual withdrawal only took 1 day.

So, which one's better? At the moment I would say that Bitstamp offers a better user experience, whereas Bitcoin Central's interface seems flashy but featureless. It's still early days of course, and I'm sure that things will have changed a lot even six months from now. Bitcoin Central's pedantism about security was a bit of a pain when you're trying to register, but I find that it does inspire confidence once you're in, and I can't really blame them for being careful. So far I haven't had a bad experience with either exchange, so I'd recommend them both, with Bitcoin Central having the slight edge since there's less fees when you're cashing out to a European bank account.

A word of warning: bitcoin exchanges have a notoriously bad reputation when it comes to security. Never keep your bitcoins or other currencies on there any longer than you need to, and the chances of any financial harm coming to you will be negligible. Identity theft, however, is a fucking serious risk, and one that I am seriously worried about after MtGox got hacked and hackers got access to the customer's passports. It's my opinion that you cannot trust exchanges to promise that they won't lose your documents, no matter how many nice words they use on their website. If you sign up for an exchange, you're the one taking the risk. So be prepared for shit to go wrong.

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