If you’ve read my less than thrilled reviewed of the Cex.io Bitcoin exchange from two days ago, you may know I’m not all that thrilled about doing business with Bitcoin exchanges in general. Cubits, however, seem to do things rights and puts my worries to rest at every step in the exchange process.
Update : Cubits have ceased operations after losing their holdings to scammers.
Where Cex.io operates in wants to do everything on their own and operates in secrecy about the commercial partners they share your personal data with, Cubits have gone in the opposite direction. Cubits are transparent about having partnered with external service agencies that can boast of having customers among the already established financial institutions.
Cubits customers have to verify their accounts with a passport or other government issued identification. Instead of uploading your most valued personal data to a Bitcoin exchange, you go through the verification process through IDnow. IDnow is a trusted online identification provider based in Germany with an impressive (and quickly verifiable) customer list including some of the biggest banks in Europe.
I was most impressed by the IDnow Video-Ident service that connected me with a lovely accented German who guided me through the verification process over video chat. I had to smile to my webcam and show my passport and its holograms, but they didn’t ask for my credit card as Cex.io’s verification process required. Video-Ident uses HTML 5 getUserMedia() so that modern browsers can access the camera and microphone directly rather than relying on any plugins or apps. Though you can also opt to go through the verification process through an app on your phone.
I felt quite comfortable sharing my papers over an encrypted video chat with an agency. The one thing I’d criticize about IDnow is that they don’t use an Extended Validation certificate (“EV cert”), but only a domain validation certificate. An EV cert would have helped establish trust.
Whereas I had a lot to say on the transaction process in my Cex.io review, there really isn’t all that much to say about the transaction at Cubits. It’s all straight forward and easy to understand.
Instead of filling up an account balance with the Exchange before you can purchase Bitcoins, Cubits relies on well external established payment processors. You can choose to have a deposit account and store your credit card with Cubits, but you don’t have to. You can choose to pay for Bitcoins with services like Skrill (formerly Moneybookers), OKpay, your Cubits account, or a handful of other payment options.
Cubits accepts customers from all over the world, excluding the USA. Which payments options are available will depend on your region.
I chose to go with Skrill as I already had an account with an associated credit card. They’re not renowned for their fee structure, but they’ve been around for a long time and seem to know what they’re doing in terms of keeping their customers’ financial data safe.
The fee structure at Cubits is a bit complicated as each payment provider operates with different fees. You can see the total fee before purchasing Bitcoins on the Cubits website, but they also have a complete table of fees for doing a bit of comparison shopping with the different payment providers.
The minimum Bitcoin purchase amount is 5 EUR at Cubits, ¼ of the minimum required purchase at Cex.io.
Seconds after I’d acquired the Bitcoins I was able to withdraw the funds without having to wait for a lockout period.
I feel that my personal information and financial data is still secure because Cubits relies on established partners for these services. The transaction was quick and painless. If you don’t have an existing account with one of the payment providers offered by Cubits, you may need to wait a day or two for credit card verification with that service provider before you can purchase Bitcoins. Other than that it should be smooth sailing.
If you’re looking to acquire a small amount of Bitcoins, I’d definitely recommend Cubits over the other exchanges. Cubits makes a good first impression and maintains that impression throughout the transaction.
If you’re looking for an alternative Bitcoin exchange, you can have a look at my review of Cex.io. I’ll warn you upfront that it’s nowhere near as positive as this review.