Louferlou
Lightning Network Theory4.8(151)
Intermediate
Discover the Lightning Network from a technical perspective
Kraken is one of the world's oldest bitcoin and cryptocurrency exchange platforms. The company was founded back in 2011 by Jesse Powell and his associates. Powell having been a consultant for the then market-leading platform MtGox, and having anticipated its downfall, launched Kraken in 2013 with the major aim of replacing MtGox, which he knew was doomed, and not repeating the same mistakes. This makes it one of the oldest and most reputable Exchange platforms in the world.
Today, Kraken is a complete platform, from simple bitcoin purchases to advanced trading features and risk management tools. It is available in a web version, and for simple transactions, an easy-to-use mobile application is also available.
Beyond all these features, which as Bitcoiners don't interest us much, it's worth noting that Kraken was one of the 1st exchanges to support Lightning Network on its platform, allowing free withdrawal of acquired satoshis, thus encouraging self custody among its users.
In this tutorial, we'll show you how to use Kraken as an individual. If you have a company and would like to opt for the Business version, please consult this other tutorial:
1 - Create a Kraken account
Go to the official Kraken website. On the home page, find and click on the "Sign Up" option in the top right-hand corner to start creating your account.
Then choose whether you want to create a personal account or one for your company. Here we'll choose Personal, but apart from the identification procedure, which will change somewhat, the functionalities don't change between a pro and a personal account. Enter your e-mail address and access password, then click on "Create account".
Then enter the code received via the e-mail address you have just entered, and click on "Confirm your email".
Then begin the identity verification procedure required by the authorities...
Complete your personal information and click "Continue".
On the next screen, you'll be asked to enter new personal details. Remember, you're all potential criminals, and it's essential that you identify yourselves. Fill in the details that apply to you, then click on "Continue".
Next, you'll need to verify your identity by providing photos of an official identity document of your choice. Follow the steps to scan your document.
To (almost) finish, you'll be asked to access your computer's webcam if you have one (to take a photo of the chosen identity document), or, as here, to scan the on-screen QR code with a camera-equipped mobile device to take the photos.
Once the front and back photos of your identity document have been sent, the final humiliation is that you will be asked to take a photo of your face to confirm that it matches the one on your identity document... At last, the serious business can begin.
2 - Securing your Kraken count
You are now logged in to your account. You will then be asked to choose between 2 types of experience. A simple one on the left, called "Kraken", with an uncluttered Interface, which allows you to simply buy and sell bitcoins. The other, on the right, is called "Kraken Pro", which offers far more options, with a much busier and less legible Interface designed for "trader" profiles.
It should be noted that the purchase costs are different for both, as we shall see later.
Let's start by choosing the simple experience by clicking on "Go to Kraken" in the bottom left-hand corner.
The Interface is indeed rather sober and colorful. Before we even go to secure our account by adding a 2-factor authentication method, let's click on the bottom left of our profile to switch to night mode and avoid hurting our eyes too much with all that white.
Our eyes now safe, let's click again on our profile to bring up the menu for adding a 2FA (2nd authentication factor). Then choose "Security".
You are then offered two 2FA options, either "passkey", which lets you authenticate via your smartphone's biometrics, or "Authenticator App".
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If you choose the "passkey" option, follow the on-screen instructions. In summary, you will be asked to select the device that will be needed to give access to your account. Either the PC you're using, a smartphone, or a YubiKey-type identification hardware key.
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If you choose to use an authentication application on your smartphone, such as Google Authenticator or Authy for example, you can find a tutorial on this tool here :
After choosing the method that suits you best, we're finally ready to deposit money to buy our first satoshis.
3 - A quick look at Kraken's Interface
Then return to the main menu by clicking on the little house in the top left-hand corner as shown below:
Let's take a quick tour of the main menu, before our 1st purchase.
By clicking on "Expand" at bottom left, you can stretch the side menu bar a little to see the menus explicitly.
From top to bottom we see the tab:
- "Portfolio", which will give you an overview of your holdings in bitcoin, crypto, and other fiat currencies (euro, dollars, etc), as well as their percentage breakdown.
- "Explore", not necessarily useful for us bitcoiners, lets you explore the world of shitcoins to discover the nugget that's sure to make you poor.
- we won't even talk about "Earn", as I don't encourage anyone to use it (shitcoinery), and it's out of the scope of this tutorial.
- as we'll see in more detail later, "Transfer" lets you fund your Kraken account with satoshis/euros/fiat, or withdraw them from the platform.
4 - Deposit and withdrawal of euros (fiat)
To acquire our first "Sats", you'll need to deposit fiat currency on the platform, in this case euros.
To do this, select the "Home" menu in the top right-hand corner, then click on "Deposit" as indicated by the arrows below.
Then select "Euro".
On the next screen, several ways of depositing euros are proposed, but here we'll deal with the most common, namely a classic SEPA bank transfer.
To do this, select "Manual Bank Transfer".
Then click on "SEPA & SEPA Instant".
Finally, make a transfer from your bank using the bank details provided. Please note that the name associated with the bank account making the transfer must be the same as the one used to create the Kraken account. Wait (usually a few minutes until your euros are available and appear on your Kraken balance).
In this example, we will deposit the sum of €21 on the Kraken account to illustrate the buying/selling part a little further on.
If you wish to withdraw euros or more generally "fiat" from the platform to your personal bank account, you will need to click on "Transfer" in the top right-hand corner of the screen, then on "Withdraw".
Select the currency of your choice.
Then, in the case of the euro, SEPA & SEPA Instant.
Then enter the amount you wish to withdraw from Kraken and the bank details of the account you wish to credit.
5 - Depositing and withdrawing bitcoins
To deposit bitcoins on Kraken, initially proceed in the same way as for depositing euros, by clicking on "Deposit" from the home screen (the "Transfer" button in the top right-hand corner also provides access to the deposit function).
This time, of course, select "Bitcoin".
Then select "Lightning" or "Bitcoin" and carefully ignore the rest - they're just crapcoins that have nothing to do with Bitcoin.
As a reminder, the Lightning network allows you to exchange Bitcoin instantly and with increased privacy, compared with the Bitcoin network, which will require several tens of minutes before the exchange is considered final.
If you're interested in the Lightning Network, we also have a complete training course to help you understand how it works:
A warning message appears, telling you to deposit only Bitcoin at the address you'll be presented with on the next screen. It goes without saying that nobody has anything but Bitcoin here anyway, right? Click on "I understand".
Scan the QR code offered with your favorite Wallet Bitcoin, or copy the address if you're using a Wallet on the same computer. It will take 3 confirmations (Kraken says 45 min) before your funds are credited to your Kraken account.
For our example, we'll deposit the equivalent of $21 worth of bitcoins, which we'll use to illustrate the buy/sell part a little later on
To withdraw bitcoins from Kraken to your personal wallet for self custody, you'll need to proceed initially in the same way as described above for withdrawing fiat currency.
Click on "Transfer" in the top right-hand corner and select "Withdraw".
Then select "Bitcoin". Here you can see that the $21 (19,580 satoshis) has been credited to the account in the meantime.
Then select "Bitcoin" or "Lightning" to choose the method for removing your precious Kraken satoshis.
Finally, you'll need to fill in your Bitcoin address and validate it by clicking on a link sent to you by e-mail, so that Kraken can be sure that it is you who is requesting the withdrawal.
Start by entering your withdrawal address and giving it the name of your choice. This address can be reused for future withdrawals, even if this is not a good practice from the point of view of preserving your privacy...
Once you have clicked on the link sent to you by e-mail, you will be able to indicate the amount you wish to withdraw and validate the withdrawal operation.
6 - Buying and selling bitcoins on Kraken
6.1 - Manual buying and selling
It's easy to buy and sell on Kraken, all on the right-hand side of the screen.
Let's do a test and try to buy 10 € of Bitcoin thanks to the 21 € we deposited on our Kraken account in paragraph 4 - Deposit and withdrawal of euros (fiat).
Enter the amount and click on "Review".
You are then presented with a summary of the trade about to be initiated. The quantity of bitcoins purchased, the Bitcoin price at the time of purchase, and the fees (€0.1 or 1% here) are summarized.
Click on "Confirm" to buy your bitcoins.
You're now the owner of €10 worth of Bitcoin. Well, not quite, because as long as the bitcoins are on Kraken, they don't really belong to you...
To sell, follow the same principle, but select "Sell" at the top of the buy/sell box, then "Review", and finally "Confirm".
6.2 - DCA (Automated time-controlled buying and selling)
A practical solution for buying Bitcoin automatically, without even having to log back into your Kraken account, is to set up a DCA. Deposit a quantity of fiat into your account and set up regular purchases that will be triggered automatically at regular intervals, as long as your fiat wallet is sufficiently funded.
To do this, click on "Buy now" to bring up the various options, then choose "Recuring".
Then choose the amount and frequency of purchase you'd like to set up. In our example, we'll choose to buy €5 worth of Bitcoin every day. Click on "Review", then on "Confirm" to set up your regular purchase.
6.3 - Fixed price purchase/sale
The final way to trade bitcoins on Kraken, is to predetermine a future price at which you wish to buy or sell your precious satoshis.
This time select "Custom Order".
Then indicate the target price at which you wish to trigger the buy/sell, and click on "Review".
For example, here we choose to buy €5 of Bitcoin on condition that the price drops from €91,000 at the time of this tutorial, to €75,000.
Finally, choose "Confirm" to open your position.
6.4 - Buy / Sell via Kraken Pro
Kraken pro, which is not the subject of this tutorial, must nevertheless be discussed for one important reason. This is a Interface dedicated to advanced users rather than simple Bitcoin savers.
It's much less streamlined than the classic Kraken platform, and offers many more options aimed primarily at traders.
However, it's worth noting that the fees charged are lower than the 1% paid by Interface Kraken simple. In comparison, Kraken Pro offers the fees detailed below.
To explain briefly, for purchases/sales of Bitcoin under 10,000 USD per month (which will be the case for most of us), as a "Taker" we benefit from 0.4% fees, i.e. more than 2 times less than by Kraken simple.
As a "Maker", it's even better, as you benefit from a 0.25% fee - 4 times cheaper than via Kraken simple.
(For your information, you are a "Taker" when you buy/sell at the market price, and a "Maker" when you create a buy/sell order at a price other than the market price).
To access Kraken Pro , click in the top right-hand corner of the screen on the 9 small dots arranged in a square and choose "Kraken Pro".
The Interface then changes as shown below.
To buy/sell via Kraken Pro, click on "Trade" in the top left-hand corner.
Then select the pair you wish to trade by clicking in the top left-hand corner. In our case, we'll enter the BTC/EUR pair.
For the example, we choose to buy at the market price by selecting "Market" and indicate the amount we wish to buy, €5. We are now a "Taker". We end the trade by clicking on Buy BTC/EUR.
We can clearly see that the fees applied are more than 2 times lower than those that would have been charged on Kraken simple. For the same sum of €5, we would have paid around €0.05 in fees, compared with €0.0175 in our case.
The sales process with Kraken Pro is exactly the same, and won't be dealt with here. It's simply a matter of drawing the user's attention to the differences in costs between the 2 solutions.
We've come to the end of this tutorial on getting to grips with the Kraken platform. Thank you for your attention!
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This tutorial has been written by Louferlou
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Fascinated by the new prospects offered by Bitcoin in terms of freedom and individual sovereignty, I devote my time to exploring and testing innovations that enable everyone to appropriate this technology without any prior technical expertise. If I can do it, anyone can.
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