Coinbase is one of the premier Bitcoin exchanges in the world that allows users to buy sell Bitcoin, Ethereum, Litecoin, and several other well-known cryptocurrencies. It is known for its highest security standards and a wide array of cryptocurrency product offerings. In this Coinbase review, we will analyze the Coinbase exchange with all-inclusive features and its pros and cons.
In order to start with cryptocurrencies, one needs to purchase Bitcoin or some other crypto coins through a cryptocurrency exchange. Because these are the platforms that enable a user to buy-sell or trade Bitcoin and other digital currencies with fiat money.
There are more than 400 digital currency exchanges or Bitcoin exchanges providing a variety of services out there. Therefore, before choosing a cryptocurrency exchange you must be aware of its security measures, reputation, features, availability, fees, and all other stuff that enable you to use an exchange confidently and efficiently. Each exchange is different in terms of features and services, and choosing one seems to be a daunting task. Anyways, there is no need to worry, at MindYourCrypto, we have best and tested crypto exchanges already shortlisted for you and Coinbase is one of those.
In this detailed review you will discover;
1. What is Coinbase ?
Coinbase is a prominent cryptocurrency exchange located in San Francisco, USA. Founded in 2012, it was the highest-funded Bitcoin exchange. It’s one of the largest cryptocurrency exchange that operates in 100+ countries, has served 30M+ users, and $150B+ of cryptocurrency exchanged. It’s a centralized digital currency exchange that is operating legally and complying with all applicable laws in the US.
Coinbase is the easiest place to buy sell and manage your cryptocurrencies. This exchange is a perfect choice for most of the beginners due to it’s simple and easy to use interface. If you are a beginner in crypto space and want to buy your first Bitcoin, Ethereum, or Litecoin, then Coinbase can be your best bet. It offers to buy cryptocurrency with credit, debit cards, direct bank transfers, and PayPal (PayPal for withdrawals only).
Not a regular cryptocurrency exchange
Basically, Coinbase is an institutional-grade broker exchange that has gained much preference among large institutional investors. Although it is different from other digital exchanges as it functions as a broker rather than a regular exchange. In simple terms, it means that if you buy crypto coins from a regular exchange, you are dealing with a user ready to sell on the other side. But when you are buying crypto on Coinbase, you are actually buying coins directly from Coinbase.
2. Is Coinbase a secure exchange? Is it safe to use?
As discussed earlier security is the most important aspect of a crypto exchange that users need to examine before starting with an exchange. Most of the new users are highly skeptical of the security of an exchange and why they don’t to be. Because there are several instances of hacks, frauds, and exchange bankruptcy which completely wiped out user accounts.
Coinbase is not only considered as the largest broker but also the safest Bitcoin exchange in the world. It’s trusted and backed by large investors including Greyscale investments, Bank of Tokyo, and many others. Coinbase boasts of highest level security measures in order to protect user funds. Regarding the storage of funds, Coinbase is quite transparent about its methods. Coinbase employs the following security measures to enhance overall security;
1). Coinbase stores 98% of available customer funds using offline storage.
2). The offline stored funds then distributed geographically in safe deposit boxes and vaults.
3. Only 2% of total funds are stored online which are fully covered by insurance.
4. It use multi-signature logins.
5. Allow users to set 2FA (Two Factor Authentication) via mobile SMS or apps like Google Authenticator.
6. It sends you a notification for verifying withdrawals and also if your account is accessed from a new device or IP address.
7. You can enable delayed withdrawal lock for additional security.
Coinbase stores only 2% of user funds in online storage. Online stored funds are fully insured, which means in case of a security breach of its online funds, Coinbase is liable to pay users for any loss of funds.
It’s important to note that insurance only covers losses resulting from a physical security breach or by employee theft. It doesn’t cover losses resulting from a breach of your individual account. You are fully responsible for your account’s safety.
There isn’t much valid info about Coinbase being hacked or not. But there are certain individuals on Reddit and some other similar platforms claiming that their Coinbase accounts have been hacked. Thus it’s your responsibility to use a strong password, 2FA, and secure all your login credentials with utmost care. It’s advised that after buying Bitcoin or any other coin, you should move it to a cold wallet and only keep that amount on the exchange wallet which you want to trade.
3. How to start with Coinbase?
In order to start using Coinbase you need to register an account. You can create your’s by following the given steps;
1). Coinbase Sign Up
First of all, you have to visit the official Coinbase website. Enter your name, email, and set a strong password. Agree to the terms and click on “Sign up”.
2). Email Verification
Coinbase will send a verification email to your registered email. Click on the given link in the email and your email account is verified now. After that, it might ask to select your country and type of account i.e individual or business. You can select accordingly.
3). Phone Number Verification
The next step is to verify your Phone number. This enables you to set 2-factor authentication for added security. However, setting 2FA using the Google Authenticator app is more secure.
4). Account Verification
Coinbase needs you to complete the account verification before you start the conversion of digital currencies. It’s a two-step process that requires identity verification and personal info verification. For identity verification, you have to upload a government-approved “Photo ID”(Driving Licence or Passport), and then you have to provide your personal details such as job, address, etc. After approval from Coinbase, your account is ready to start with.
4. Supported fiat currencies and payment methods on Coinbase exchange
Coinbase supports six fiat currency deposits and withdrawals. These are USD, EUR, CAD, GBP, SGD, and AUD.
It allows users to add funds via Credit cards, Debit cards, and bank transfers. To add a payment method follow the given steps;
– Go to settings > Payment methods and click add payment method.
– Choose accordingly and it will prompt you to submit further details i.e card snapshot or bank details.
– Double check entered details and click continue.
Deposits via credit and debit cards are quicker, while ACH bank deposits take up to 4-5 days. You have to add the desired payment method that Coinbase offers in your country. PayPal is also available for some countries but for withdrawals only. For using PayPal you need to link both PayPal and Coinbase accounts.
– Go to settings > Payment methods and click add payment method.
– Choose PayPal and it will prompt you to “Log-In” to PayPal. That’s all.
After learning about account funding, now it’s time to know how to buy cryptocurrency on Coinbase. you have a verified account with some funds. You can buy crypto with these funds. It offers nearly 20 digital currencies to trade. To buy your first crypto on Coinbase follow the given steps;
– Click on Buy/Sell tab at the top of the screen.
– Select the crypto from the given list. For example, you are buying Bitcoin using a Credit card.
– Now enter the amount of BTC you want to buy with fiat money, make sure it doesn’t exceed your card limits.
– You can see the equivalent amount in BTC in adjacent box and fees on the right side.
– Click on “Buy Bitcoin Instantly” to complete the trade and purchased amount will be transferred to your BTC wallet.
Similarly, you can easily buy other coins too.
5. What is Coinbase Pro?
Primarily, Coinbase is a cryptocurrency exchange that is well suited for casual buying-selling and long term investing. Hence, it’s not the best bet for regular traders as it lacks several features that other regular trading platforms are offering.
Thus in order to cater to the regular trading community, in 2015 Coinbase launched GDAX, as its separate platform for advanced trading. Again in 2018, it has got rebranded as “Coinbase Pro”.
Coinbase Pro offers its users the ability to trade a variety of crypto assets with much lower trading fees and insurance protection. It offers an advanced user interface with charting tools, trade history, and real-time order books. Apart from that, all the Coinbase users automatically have an account on Coinbase Pro. All you need is to log in to Coinbase Pro with the same login credentials as you would on the Coinbase and you can start trading instantly.
6. Supported cryptocurrencies
Coinbase supports all the major cryptocurrencies including Bitcoin, Ethereum, Litecoin, XRP. It also supports Link, XTZ, BAT, BCH, BSV, DAI, DASH, EOS, KNC, OXT, REP, USDC, XLM, ZEC, ZRX, ETC.
7. Coinbase supported countries
Coinbase serves 100+ countries all over the world. Some of these countries are the United States, India, UK, Switzerland, Canada, Singapore, Australia, Spain, etc. However, in some countries, it doesn’t support fiat money deposits and allows the only crypto to crypto conversions. For a detailed list of supported countries along with deposit options visit here.
8. Coinbase fees
Coinbase charges a slightly higher fee as compared to other digital exchanges. You will have to pay fees every time you deposit or withdraw funds or when you buy and sell a cryptocurrency. However Coinbase does not charge any fees for depositing funds, it’s your financial institution that charges.
These fees may vary from country to country but in most cases, it’s 3.99% for Credit/Debit cards and 1.49% for bank transfers. The fixed fees for buying and selling of cryptocurrency (Fiat to Crypto or Crypto to Fiat) on Coinbase is 1.49% and it also charges a spread margin of 0.05% to 2% for digital currency conversions (BTC to ETh). You can check out the final charges at the time of placing the order.
This is really expensive and thus it’s not suitable for regular trading. For a detailed list of fees for fiat transactions and cryptocurrency conversions, visit here.
9. Coinbase products and services
Alongside its broker services, Coinbase also offers a variety of other products and services. These are given below.
1). Coinbase custody
Coinbase offers a custody service that is aimed to serve large financial institutions such as hedge funds, banks. It charges an implementation fee of up to $10000 and clients are expected to retain a minimum balance of $1000000.
2). Coinbase Wallet app
It also offers a mobile crypto wallet and Decentralized app browser that enables you to securely store BTC, ETH, and other ERC20 coins. It’s a user-controlled crypto wallet, which means your wallet’s private keys are fully controlled by you and not held centrally on an exchange.
3). OTC services
In order to cater to larger traders and institutions, Coinbase has created Over The Counter(OTC) exchange. Basically OTC is an on-ramp for institutional crypto trading with lower costs and higher security of a regulated entity.
4). Coinbase Staking
In November 2019, Coinbase launched Tezos (XTZ) staking services to US users and then extended it to global investors. Staking is quite similar to mining where you earn rewards for actively participating in transaction validation on a proof-of-stake (POS) blockchain. Initially, XTZ is available for staking, more cryptos might be added in the coming days.
10. Customer support and user opinion
Coinbase has a huge team of customer care executives to serve its large user base. From the US, UK, and Ireland, you can contact support by phone(24/7) or email. Users from all other countries can reach support by email at any time.
The customer support is not found up to the mark. You can found people complaining about the lack of proper customer support. Due to its large user base, and less supportive customer care staff, its customer service has received negative user ratings on several social media platforms. Coinbase exchange has scored a low rating of 2 stars on the business rating platform Trustpilot.
Thus as a new user, lagging customer service is perhaps the one thing you should take into account before starting with Coinbase.
Customer service is the section that needs a lot to be improved, otherwise, it’s one of the cryptocurrency exchanges that is known for robust security and a load of product offerings.
11. Coinbase pros and cons
1). Offers a variety of services and products to choose from.
2). Seperate mobile App for Coinbase, Coinbase Pro and Wallet services.
3). Easy to use and intuitive user interface.
4). High level of security and insurance of user funds.
5). Offers services in 100+ countries.
1). Much higher fees due to which it’s not suitable for regular trading.
2). It collects too much user info and accounts are monitored.
3). Limited fiat currencies are supported.
4). Unable to short cryptocurrencies.
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