Coinbase - A Detailed Review
What is Coinbase
Coinbase is the world’s largest cryptocurrency exchange, which has backing from some of the world’s most respected corporate investors.
It was founded and launched in 2012 by Brian Armstrong and Fred Ehrsam, and has grown to become the most recognized fiat/cryptocurrency onramp and exchange in the world.
Coinbase’s mission is to ‘create an open financial system for the world.’ A financial system that isn’t controlled by any one country or company, and one that will bring about ‘economic freedom, innovation, efficiency, and equality’ to all corners of the world. A financial system that can lift billions out of poverty, while accelerating innovation everywhere.
They foresee a future where payments are made as simply as sending an email. A future which will bring together global markets and elevate developing countries by giving them as much accessibility to finance as developed nations enjoy.
Coinbase’s exchange is known as Coinbase Pro (formerly GDAX), and is a different entity to ‘Coinbase’ the fiat currency onramp platform.
Whereas Coinbase is like an intermediary for traders wanting to buy and sell cryptocurrencies, Coinbase Pro is like other cryptocurrency exchanges, in which orders are placed from the order book that is stored on the exchange.
Coinbase Pro users in the US, UK and EU have the option of fiat-crypto onramp, and all can trade multiple cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC) and Bitcoin Cash (BCH), ZCash (ZEC), Stellar Lumens (XLM), while many Ethereum-based ERC20 tokens are also being added.
As well as the above-mentioned countries that have access to Coinbase, Coinbase Pro is open to several more Latin American countries and some Asian countries, but these are limited to crypto/crypto trading.
The main difference between Coinbase and Coinbase Pro is Coinbase is like a bank and an intermediary for traders wanting to buy and sell cryptocurrencies. Coinbase is the account you’ll fund your fiat into and you can buy cryptocurrencies from your Coinbase account, but it’s relatively expensive compared with Coinbase Pro.
Trading fees on Coinbase Pro are a fraction of what they are on Coinbase, and depending on your location and the cryptocurrency you’re buying the charge will range from 0.005% to 0.25%. Much cheaper!
To get around paying the higher fees on Coinbase fund your Coinbase account and then move your fiat value to your Coinbase Pro account, which you’ll automatically have when you create your Coinbase account, and buy your cryptocurrencies there. You’ll save a lot, especially if you trade regularly.
Coinbase is the main gateway for most buyers of Bitcoin. As well as its main trading platform, it has two other core products: Coinbase Pro exchange, and an API that enables developers and merchants to integrate the data from the exchange into their system.
Coinbase is the largest Bitcoin exchange in the world and is highly respected throughout the cryptocurrency space. It is fully insured, and your personal funds are insured up to $250,000 depending on your location.
With an easy to use interface, Coinbase makes buying and selling cryptocurrencies easy for first-time buyers, and with the cheapest credit/debit card charges it makes it the most accessible for buyers in North America, Europe, Singapore, Australia, Mexico and Chilé.
If you’re buying with a credit/debit card the fees are $2.99 and up to 3.99%, depending on your location, which makes Coinbase cheaper than most fiat onramps. However, you can get cryptocurrencies cheaper if you send your funds to your Coinbase Pro account, which I’ll explain later.
Coinbase doesn’t charge for depositing funds into your account by a bank transfer, but your bank might charge and depending on which country you’re in the charges will vary. Also you can fund and withdraw from your Coinbase account with the following fiat currencies: USD, CAD, GBP, EUR, SGD, and AUD.
Because Coinbase is a regulated financial company you cannot use it anonymously. To verify your account, you must send government issued ID and your banking information. There are different levels of verification, and once your Coinbase account is fully verified, you can withdraw up to $50,000 daily, depending on your location.
Coinbase stores 98% of their users’ funds in an offline cold-storage wallet. These cold storage wallets are kept in safety deposit boxes in different locations around the world, making it one of the most secure custodial solutions for cryptocurrencies.
For access to your cryptocurrencies on Coinbase, there are three types of Coinbase wallet: wallet, vault, and multisig vault.
If you store your funds on Coinbase, you will have access through a wallet interface, which will be accessible at any time. This can be accessed on your desktop, or with the Coinbase apps for iOS and Android.
You can strengthen security for your own account by enabling 2FA, email verification and other security measures. The wallet is used for easy access for those who are wanting a quick withdrawal or wanting to trade on Coinbase Pro.
Although it’s not advised to leave your cryptocurrencies on an exchange wallet, Coinbase wallet is more secure than most and it’s insured. And with ambitions of becoming a custodial solution for institutional investors, the Coinbase vault and multisig vault options are more like a bank than a typical crypto wallet.
The Coinbase Vault is a unique solution for securing larger amounts of cryptocurrency. Although Coinbase store 98% of their users’ funds in cold storage if you want to add an extra level of security, you can store it in the cold storage vault.
If your account is shared with others (like a company account), you can enable the multisig feature. In this case, more than one approver is involved, and they all must sign to confirm any withdrawal from the vault.
Transactions from the vault take up to 48 hours and in that time you will receive a message from Coinbase asking for your confirmation of the withdrawal. Because of the time it takes to withdraw from the vault, it’s only really recommended for long-term storage and not something you’d want quick access to.
Coinbase does have a customer support and anybody having issues has access to an extensive FAQ page, which should have the answer to any problem you might encounter.
If you’re still having issues, however, you’re asked to open a ticket, which the Coinbase support team will answer and work out as quickly as possible. Although it must be noted there has been some complaints about the length of time for some cases to be resolved.
Although Coinbase is arguably the most respected and most important of companies in the cryptocurrency ecosystem, it does come with its limitations:
Coinbase is limited to North America and Europe mostly. Although its outreach is growing, it’s not as global as other unregulated exchanges, yet.
The cryptocurrencies you can trade on Coinbase are limited compared to other exchanges, but again this is growing.
Because it’s a regulated exchange you cannot use it anonymously, and have to go through a KYC process to use it.
Buying and selling cryptocurrencies can be a little technical, especially if you’ve never done it before. Even people who have invested in stocks and commodities before find it strange that an exchange will custody your asset while you trade.
That said, Coinbase does simplify it, and with its easy to use interface it makes buying and selling cryptocurrencies safe and easy.
Although it’s limited in location and tradable cryptocurrencies, it is growing.
All being said, Coinbase is the most respected exchange, arguably the most secure, it has high liquidity, it’s fully insured and gives its users peace of mind when transferring money to and from their bank accounts.
If Coinbase sounds like an exchange you'd like to buy and trade your cryptocurrencies on, please click on the link and sign up.
*Disclaimer: CryptoEase may receive compensation from Coinbase if you sign up membership and start trading.