Coinomat instant exchange

Monday 23 March 2015

If there’s one thing that bitcoin has taught us, it’s that centralised exchanges are fraught with perils. MtGox is a name you’ll hear over and over (to be Goxxed is an established synonym for being scammed or losing money through the incompetence of the service manager). Only a month ago BTER was hacked for 7,170 BTC - $1.75 million at the time - but they were one of half-dozen that were hit that same weekend and countless more that have been attacked in bitcon’s brief history. Exchanges, like friends, enemies, words and underwear, should be chosen carefully. You could be stuck with the consequences for a long time.

See also: blockchain app review.

Coinomat is one of a series of ‘exchanges’ that approach the problem in a different way (other notable variations on the same theme include Shapeshift and CCPAYT - more on those another time). It’s less of an exchange than an instant exchange service. The difference is something like trading on a Forex platform and getting your holiday money from an airport bureau de change. There’s a place for each in the world, since each have their advantages and disadvantages.

Coinomat exchange

I’ve been using Coinomat’s app through the SuperNET client, where it’s integrated as a core service for shifting fiat in and out of your crypto wallet as well as for crypto-to-crypto transactions, but you can use it on their site, too. And it’s really very easy to use. You simply select the currency you want to sell and the one you want to buy, and you’re given an exchange rate. You can optionally set the amount you want to exchange.

Click to proceed and you’ll be asked for a deposit address (automatically selected if you’re using it in an integrated client like SuperNET), and you’ll be asked for payment - either through a QR code or a regular transaction if you prefer. Make the transaction, and that’s it: your new coins will be on their way.

Coinomat has two major advantages over traditional exchanges: speed and security. Exchanges happen right then and there, at the given exchange rate. There’s no worries about depositing your coins into an exchange, making the trade, then withdrawing them again - often with a hefty delay involved. It’s really fast, and really easy. It will sometimes take a little while to receive your coins - possibly due to delayed blocks - but on other occasions it’s been near instant. If you want crypto fast, this is the way to go.

In terms of security, you’re still trusting a centralised service, but they don’t hold your coins for any longer than they need to. This isn’t like Gox or BTER, with their hot and cold wallets bursting with thousands of bitcoins. It’s in and out automatically, job done.

As far as disadvantages go, well, there’s a price to pay for that kind of speed and convenience. Depending on the crypto pair you’re exchanging, liquidity can be pretty poor and it can be significantly more expensive than a regular exchange. For popular coins, there’s no problem - though you’ll still pay a small premium over the market rate.

There isn’t a huge number of options to choose from: BTC, LTC, PPC, NXT and a series of fiat options. This is clearly designed as a fiat gateway rather than a complete altcoin service.

Lastly, these services aren’t generally suited to high volumes: there are limits on the amount you can buy at a time, and sometimes that can be a little on the low side. And it goes without saying that they’re not designed for trading with any kind of frequency. Of course, if you’re a high roller or active trader, you won’t be using this anyway.

Verdict: fast, convenient and very welcome service. 8/10 and a big thumbs-up to Coinomat.

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