Coinbase at a Glance
Pros
- The minimum amount needed to buy or sell cryptocurrency is $2.
- Lists a wide selection of cryptocurrencies and supports the trading of over 100 cryptocurrencies.
- Users can trade on two platforms: Coinbase and Coinbase Pro. Coinbase Pro has lower fees.
- Offers beginners a chance to earn cryptocurrencies by watching educational videos on crypto trading.
- Promotes convenient user experience by having a user-friendly interface.
- Use credit or debit cards to buy or sell cryptocurrencies.
Cons
- Customer service can be unresponsive and hard to reach.
- High trading fees of 0.5%-0.45% depending on the payment method, type of cryptocurrency, transaction size, and platform. Complex fee structure.
- While its selection of altcoins is growing, Coinbase still lags behind other top exchanges.
TL;DR
With more than 43 million verified users in over 100 countries and more than $90 billion in user accounts, Coinbase is hailed as one of the largest cryptocurrency exchanges in the world. While it is notoriously famous for its high transaction fees, the platform attracts users with its easy-to-use interface and overall great user experience. It also has exciting features such as Coinbase Earn where you can earn small amounts of crypto by watching short educational videos on different cryptocurrency projects. To learn more about Coinbase, read more below.
Coinbase Review: Everything You Need to Know
Creating an Account
Registration on Coinbase is simple. Enter your email address and nominated password. Make sure to use your real name as shown on your passport or driver’s license. You will need to confirm your identity but more on that later. Using an alias will only delay this particular step. Lastly, check your email address to make sure it is accurate.
Then, you will receive a confirmation email at the address you provided. Click the confirmation link to activate your Coinbase account.
When your account gets activated, you must confirm your identity. While you can skip this step, it is worth setting up right at the beginning so you can access more cryptocurrency. Only confirmed accounts can buy certain coins. Not to mention, your account will also be doubly-secured.
To confirm your identity, go to the Settings options in your Coinbase dashboard and choose Security. Then, you need to fill in your residential address. The Country field determines which financial services you can use and the volume of coins you can buy or sell.
Then, upload copies of any government-approved ID such as passport or driver’s license. The requested documents would depend on which country you currently reside.
Coinbase vs Coinbase Pro
Coinbase and Coinbase Pro are two cryptocurrency exchanges owned by Coinbase Global Inc. Beginner investors find the simplicity of Coinbase to be more appealing. Seasoned crypto enthusiasts prefer the advanced options that Coinbase Pro can offer.
The major difference between the two platforms is the user interface. Coinbase offers a clean and simple way to buy and sell cryptocurrency. You will have few trading options, which makes the experience more straightforward.
Coinbase Pro, on the other hand, gives users advanced charting. Advanced traders prefer this platform because it offers more control over their trading by providing them access to multiple trade options. Users can further customize their charting views by creating minute-by-minute trading, enabling them to view the moving averages for each coin.
If you are a novice trader, you can learn the ropes first on Coinbase. Yes, the transaction fees on Coinbase are much higher than Coinbase Pro. However, it offers simplicity and ease of use that the other exchange does not. With Coinbasse earn, you can learn about the different cryptocurrency projects and earn small amounts of crypto as a reward.
Coinbase Pro is more for business use. If you are an experienced crypto investor, you would probably want to use this platform instead. Although there would be a steep learning curve, this platform offers lower transaction fees. On top of that, you can access advanced chart analysis and professional trading features that Coinbase lacks.
The beauty of Coinbase and Coinbase Pro lies in the seamless way you can jump from one exchange to another. Log into Coinbase Pro using the same Coinbase username and password. It also works vice versa.
Trading Fees: Are They Expensive?
The Coinbase fee structure might seem too complicated and intimidating to some. But we’re here to break down the fee structure into digestible pieces to lessen the confusion.
Let’s define the two main fees that apply to all transactions: margin or spread fees and Coinbase fees.
Margin or Spread Fees
The difference between the market price and the price you pay for a purchase is called the spread. It is not unlike the commission or trading fee you might pay when investing using a brokerage account.
Coinbase’s spread equals 0.50% of your crypto sales and purchases. It can fluctuate depending on the market. You can get charged a spread fee of up to 2% when converting cryptocurrencies, like trading Bitcoin for Ethereum.
Coinbase Fee
Now, the Coinbase fee is a whole other story. This part is where things get confusing for most. There are so many factors that affect this fee. The user can either pay a flat fee or a variable percentage of the transaction. This percentage will also depend on the region, product, transaction size, and payment method.
The flat fees charged by Coinbase:
| Total trade amount | Fee |
|---|---|
| $10 or less | $0.99 |
| More than $10 and up to $25 | $1.49 |
| More than $25 and up to $50 | $1.99 |
| More than $50 and up to $200 | $2.99 |
Here are the variable fees for users based in the US:
| Total trade amount | Fee |
|---|---|
| U.S. bank account or Coinbase wallet | 1.49% |
| Debit card | 3.99% |
| Instant card withdrawal | Up to 1.5% (minimum fee of $0.55) |
| ACH transfer | Free |
| Wire transfer | $10 ($25 outgoing) |
It is worth noting that the minimum transaction on Coinbase is only $2, up to a total of $25,000 per day.
Available Cryptocurrencies on Coinbase
Although compared to other top exchanges such as Binance, Coinbase doesn’t have as many altcoins. However, it still supports the trading of over 100 cryptocurrencies. Bitcoin, Ethereum, Cardano, Polygon, Polkadot, Uniswap, and Dogecoin are a few popular currencies available on Coinbase.
The platform allows you to purchase cryptocurrency in dollar amounts. Coinbase has a $2 minimum order amount, while Coinbase Pro has no minimum dollar requirement. However, the order can’t be smaller than 0.001 BTC, O.01 BCH, 0.01 ETH, or 0.1 FTC.
Security: How Safe is Coinbase?
Security is one of the most talked-about aspects of any exchange. Every investor has perhaps asked once or twice if Coinbase is a safe platform to use. Let’s take a closer look at this crypto exchange’s security features and other safety measures it has put in place.
Coinbase’s Multi-factor Authentication Hack of 2021
According to a breach notification letter sent out by Coinbase to affected users, hackers stole from the accounts of approximately 6,000 users. The hack took place from March to May 2021.
Hackers tricked users into opening fraudulent emails which revealed their usernames and passwords. The hackers were also able to exploit the flaw in the company’s SMS account recovery process. Hackers gained access to accounts and transferred funds to crypto wallets not associated with Coinbase.
Coinbase has announced that they have already fixed the flaw in their system. They have worked with hacked customers to regain control of their accounts. The company had also reimbursed the lost funds. There was also no evidence to suggest that the personal information hacked came from the company itself.
Key Security Measures
- ID Verification
Since Coinbase follows KYC (Know Your Customer) rules, users must submit a government-issued ID and complete the address verification step so they can use the platform’s trading features. You can’t trade on Coinbase anonymously, which adds a layer of protection.
- Use of Cold Storage
Coinbase has long since stored assets in cold storage. Those assets are offline. Less than 2% of customer funds are online, so users remain secure that their funds are untouchable via hacking or theft. The exchange also keeps all of its assets insured.
- Wallet Security
Each user’s wallet, wallet address, and private keys feature encryption. Wallets and other personal data are encrypted under AES-256 encryption.
- 2-Step Verification
All users are encouraged to use 2FA to boost personal security. There are three types of 2FA available to customers.
You can go for phone/SMS authentication where you will receive a one-time passcode every time you log into your account. You can also use a TOTP authenticator such as Google, which provides random time-sensitive codes you can use during login.
The most robust form of 2FA is using hardware keys. Hardware keys are physical token devices similar to flash drives that provide additional authentication during login. Trezor and Ledger are some of the popular hardware keys.
Customer Support: Coinbase’s Achilles Heel
Coinbase has a major weakness: its customer support. Angry customers have left thousands of complaints of being unable to reach customer service.
The crypto platform only has email support to offer. There is an emergency phone number provided to disable your account. You are given the option to speak to a live agent. However, these options still aren’t enough to address the pain points of most users.
Most users try to make it work by directly sending a message on the exchange’s social media accounts. Some prefer to reach out to online crypto communities on Reddit or Discord.
Coinbase Products
Coinbase offers products and services for individuals, businesses, and developers.
Coinbase Borrow
You can borrow cash using Bitcoin as collateral. Selling Bitcoin can result in a taxable gain or loss. With this product, you can borrow as much as 40% of the value of Bitcoin in your account, up to $1,000.
You would only need a low APR of 8%. There are no fees or credit card checks involved. The borrowed cash is automatically deposited to PayPal or transferred via ACH to your bank account.
You will have to make monthly payments where you’ll only be paying the interest due. Then, you can pay off the balance completely whenever you are ready.
Coinbase Card
This product is a Visa debit card funded by your Coinbase balance. It is considered the easiest and fastest way of spending your crypto worldwide.
The Coinbase card also has two-step verification, instant card freeze, and others security features.
You can choose which crypto to pay with using the app. It only takes a few clicks to switch between Bitcoin, Ethereum, and more.
USD Coin and USDC Rewards
USD Coin is a cryptocurrency commonly known as a stable coin. When you redeem 1 USD coin for $1, you now have a stable price for your crypto assets. Eligible users can earn rewards for every USD Coin they hold.
USD Coin does not require a bank account which means you can send this coin anywhere at low costs regardless of where you live. Coinbase’s support of USD Coin helps pave the way for an open financial system. Experience the stability of the world’s fiat currency without paying high fees.
Rewards are distributed within the first five business days of the following month into your USDC wallet. The higher your USD Coin balance, the more rewards you receive.
Coinbase Prime
Coinbase Prime caters to institutions that want to trade cryptocurrencies. This brokerage platform combines advanced trading, battle-tested custody, and financing in one end-to-end solution. It can handle significantly larger orders than Coinbase’s retail trading platform.
Coinbase reported that it had 9,000 financial institutions on board. Some of the biggest trades occur on this platform.
The Bottomline
Coinbase is one of the most trusted cryptocurrency exchanges today. Not only does it store 98% of all the users’ assets on offline cold storage, but USD balances of up to $250K are FDIC insured. While it may have its weaknesses, such as poor customer service and high transactional fees, it makes up for its diverse products, easy-to-use interface, and crypto rewards for users who participate in Coinbase’s video classes.
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