Last updated: 8 Jan 2018
This post gives an overview of the up-and-coming pure cryptocurrency exchange Kucoin, based out of Hong Kong and started in Sep 2017, as well as step-by-step instructions on how to acquire their token Kucoin Shares which gives you a stake in all of their future revenues.
For a refresher on blockchain and cryptocurrencies, see Blockchain ELI5. I also write a Crypto Weekly Roundup about interesting events in the crypto world over the past week. Subscribe to my blog or follow me @tonyin on Twitter for more of this.
Table of Contents
- What Is Kucoin
- Pros and Cons of Kucoin
- Get Bitcoins or Ether
- Fund Kucoin Account
- Buy Kucoin Shares (KCS)
- Useful Links
1. What Is Kucoin
Kucoin, dubbed "The People's Exchange", broke out in late 2017 coming on the heels of Binance (another popular crypto exchange), highlighted by their slick user interface and first-mover advantage on many niche coins. They started with catering to the NEO community with NEO/BTC and GAS/BTC pairs immediately, and have continued to focus on the NEO protocol.
Kucoin, like Bittrex or Binance, does not provide fiat deposits or withdrawals, but does offer the popular USDT (Tether) option that aims to track the US dollar 1:1.
2. Pros and Cons of Kucoin
Kucoin's overall user interface and graphics are impressive eye-candy in a world of seemingly-slapped-together basic Bootstrap templates (see: Bittrex). The team clearly understands that presentation matters just as much as execution in securing trust with users.
Take a peek at their supported markets and be amazed by how quickly new coins and pairs are added; and they are not just obscure low-interest coins. Three of the hottest NEO platform NEP-5 coins, Red Pulse (RPX), DeepBrain (DBC), and Qlink (QLC), were listed on Kucoin first and have seen massive gains since their ICOs.
Kucoin Shares (KCS)
KCS is an ERC20 token with an initial supply of 200 million and a buyback plan of 100 million. Owners of KCS receive a Kucoin Bonus for every KCS deposited on their platform; the bonus is calculated as a cut of all trading fees taken by Kucoin based on a proportion out of 100 million total tokens (post-buyback supply). Natural deflation will occur as the 100 million KCS gets steadily repurchased by the team. As overall interest in crypto increases, trading volume in crypto will also naturally increase —
Kucoin Shares are a prime way to get in on the massive growth of a promising crypto trading exchange, and the main focus of this guide.
Young Team and Exchange
Does not necessarily need to be a con but definitely something to keep in mind. The team is not the deep decades-long experienced team that you will find with other exchanges. Both the team and the platform are young and thus may come across growing pains as the crypto world evolves. So far they are handling things well.
As Kucoin is natively Chinese from Hong Kong, there will be a language barrier and limited English documents and support. If you are able to understand Chinese however, then you may actually have a small advantage!
No fiat currency exchange
Kucoin is a pure crypto-crypto exchange like we mentioned in the intro. This means that buying or selling into fiat is not available and we will need to transfer to and from other fiat gateways. There is the option of using USDT as a temporary way to "park" your capital in an asset that purportedly tracks US dollar 1:1.
3. Get Bitcoins or Ether
Now let's get ourselves some Kucoin Shares! The first thing we have to do (since Kucoin is pure crypto) is get common cryptocurrencies that can be used to buy or sell. In the crypto world Bitcoin is king and Ether is queen, so we will get either one in order to buy the coins that we want including KCS.
The easiest way to get BTC or ETH is to use the most established crypto platform in the USA, Coinbase.
Help me help you! Sign up for Coinbase using my referral code (already linked) and we both get $10!
On Coinbase, you'll be able to purchase BTC or ETH using conventional fiat methods including Bank Account, Credit/Debit Card, and Wire Transfer (depending on your locale); each has different buying times and limits, generally the longer the buying time the higher the limit. I'll wait here while you buy some.
A few days later...
Okay great! Let's get those BTC or ETH over to Kucoin now. Tab on over in your Coinbase account to "Accounts", select "Send" from one of your coin balances, and pop in the deposit address from your Kucoin account with your new BTC or ETH.
With all of the traffic slamming Coinbase, if you're looking for alternative places to buy BTC or ETH here are a couple more popular places:
- Changelly — Super easy interface and provides a wider variety of coins to buy like Ripple, Dash, Monero
- LocalBitcoins — Peer-to-peer buying marketplace, the advantage is that only you and the other person have knowledge of your transaction. They have an escrow service to facilitate transactions if needed.
4. Fund Kucoin Account
If you haven't already, make an account on Kucoin (disclaimer: my referral link), making sure to add your 2FA and such for extra security. One small thing I like is that, when entering your 2FA for logging in, you don't need to press "enter" as the system automatically attempts to log in when you enter 6 digits. It's the small things :)
When you first log in, you should see your dashboard that looks something like the below screenshot. You will see a snapshot of all of your holdings and their equivalents in USD. You can also access your holdings whenever you want by hovering over the "$" icon in the top right.
Now for transferring BTC or ETH over from wherever you bought them, find the coin on this page (either Bitcoin or Ethereum) and hit "Deposit". This will bring up your personal BTC page with your balance as well as an address for deposits.
This is the address you want to use for sending your BTC (for ETH, use your corresponding Ethereum wallet page) from wherever you bought them from. The screenshot below assumes sending from Coinbase to Kucoin.
Once you send your BTC or ETH into your respective wallet, and waiting for the required number of block confirmations, then you are ready to actually start trading on Kucoin and buy some Kucoin Shares!
5. Buy Kucoin Shares (KCS)
We can find the KCS/BTC market or the KCS/ETH market from the "Markets" link on the top navigation bar. Here we will assume we got some BTC and are using the KCS/BTC trading pair to buy KCS. Navigate on over to that screen or use this link directly: https://www.kucoin.com/#/trade.pro/KCS-BTC
When we arrive we will see a dark screen with a chart and bunch of numbers. We'll go over each section.
First, on the left side, there is a giant candlestick chart showing the price of KCS in terms of BTC over time. We can toggle the time frame and other visual/technical indicators in the top left options. The very bottom left is also a handy chart called the Depth Chart that shows the buy and sell orders currently resting in the order book. The taller the area chart, the more orders there are on that side of the buy/sell book.
Which brings us to the order book itself on the right side.
The left area shows the orders that people have placed: from top down are the sell orders, with price and volume, where they meet in the middle with the buy orders. You can see in the screenshot that the last traded price was 0.00085795 BTC per KCS, or $14.29 when converted to USD. Below it then are the buy orders leading up to that middle price point.
The right area is a scrolling list of all of the trades that are happening. Red means someone sold into a buy order, and green means someone bought into a sell order. For active assets like KCS, we could potentially see hundreds of orders every minute!
Finally at the bottom right, after punching in our 2FA code again, we get to the buy and sell order window. On the left we specify the "Price" and "Amount" of KCS that we are willing to buy, and the associated fees. There are a few handy tools to help with what to put in — like "Best price" and "Max KCS", as well as a volume slider "Ratio" for how much of the total amount we want to do.
Adjust your price and amount to a number you are satisfied with, and then hit "Buy". You should see your order pop up in the "Active orders" window directly to the left. If there were sufficient sell orders at that price, then the order will execute and disappear from "Active orders" and you will be able to see it in "Dealt orders".
And that's it! You've bought your first Kucoin Shares. You now get a share of all future trading fees from Kucoin, and if the recent volume and traction is any indication, we will be going to the moon!
Like this tutorial? Any tips are greatly appreciated!