Coinbase is one of the world’s largest and most popular centralized cryptocurrency exchanges, which offers a wide range of services that allow users to make cryptocurrency transactions. The exchange was founded in 2012 by Brian Armstrong and Fred Ehsram, making it one of the oldest cryptocurrency platforms.
As a crypto exchange platform, Coinbase allows you to purchase cryptocurrencies with fiat currencies like USD, EUR, and others. This unique feature makes it easy for users to buy cryptocurrencies with any currency of their choice.
The exchange platform is fully licensed and regulated with legal practices and is available to users in more than 100 countries around the globe. Users can buy with many forms of payment methods, which include a debit card, credit card, bank transfers, PayPal, and several other payment options.
The US-based cryptocurrency exchange has an easy-to-use and interactive platform, which makes it easy for new investors to buy and trade cryptocurrencies. Coinbase features more than 120 cryptocurrencies, including popular ones such as Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). You can also find altcoins like Ethereum Classic and Bitcoin Cash on Coinbase.
Coinbase has a built-in wallet that enables you to store cryptocurrencies on the platform, but it’s recommended to move your cryptocurrencies to a hardware wallet. Coinbase has one of the most secure wallets around because the cryptocurrency exchange keeps almost all its assets in an offline storage system that can’t be hacked.
Unfortunately, you cannot use Coinbase anonymously due to KYC requirements which restrict users from accessing the site unless they provide a government-issued ID and some other forms of verification methods.
Key Information
AttributesDetailsVerdictDeposit/Withdrawal MethodsBank Transfers, Card-based payment methods, and Cryptocurrencies.Coinbase offers multiple options in which to use for funding an account.Coins/TokensBitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Ethereum Classic (ETC), Ox (ZRC), Bitcoin Cash (BCC), and 120 other coins.Offers a number of well-established cryptocurrencies to work with.FeesCharges a flat 1% fee on all transactions. The trading fees go up to 0.60% for amounts less than $10k. The deposit/withdrawal fee varies based on the method used.Fees are relatively high compared with other exchanges like Binance US and Gemini.SecurityMulti-factor authentication with an AES-256-bit encryption system and insurance benefits.Coinbase offers full transparency in its approach regarding security and has no records of a major hack.RegulationFully regulated.Coinbase is a regulated securities firm and acts as a broker-dealer.LimitsNo deposit limits and withdrawal limits differ with each account level.Other factors like account age and buying history also determine the limits of the account.
Features
Coinbase has an interactive and convenient interface with a clean design that makes navigating the website easy for beginners. It is a secure and trusted platform because it only offers legit and verified cryptocurrencies, which makes it hard for users to be exposed to tokens that could be equities or securities.
Coinbase has a feature that makes fast and seamless transactions called “Instant Exchange,” which allows users to make transactions in fiat currencies that will be converted to Bitcoin for the receiver. This incurs no extra charges, making it a great feature to use.
The exchange platform also offers a Visa debit card called the ‘Shift Card’ that users can make direct transactions with. The card can be used to make payments, and an equivalent value of Bitcoin will be debited from the user’s wallet.
Sign-up and Verification
Coinbase has a straightforward process for signing up on the platform.
Access the exchange’s website platform, and sign up with your name, email address, and password. Read and accept the Terms of Use to proceed with the account activation. Verify the email address, and you will be redirected to a page where you will be asked to confirm whether you will be creating an individual or business account.
Set up a two-factor authentication feature that makes the account more secure (this can be done by accessing the account settings).Verify your identity. You will receive a document verification prompt after signing in. Choose your preferred identity document and follow the on-screen instructions to upload them (the platform accepts state-issued IDs like identification cards, driver’s licenses, passports, government-issued photo IDs, and national ID cards).You will also be asked to upload a picture of you holding the identity documents. Once you have uploaded all the relevant documents, your account will become fully verified and functional.
The Pros and Cons of Coinbase
Pros
A huge selection of cryptocurrencies to trade (120+)Good and beginner-friendly user interfaceOpportunities to earn interest in cryptocurrenciesPlenty of educational resourcesStrong security with funds stored in cold storageFDIC insurance for US users
Cons
High transaction fees and high trading feesComplex trading fee system based on maker-taker pricing tiersPoor customer servicesDoes not support some altcoins
Comparing Coinbase with Binance US, Gemini, and Kraken
The crypto marketplace continues to evolve rapidly as new competitors are entering the market. Other than Coinbase, you also have the option to trade/buy/sell crypto on other decentralized and centralized exchanges.
Some of Coinbase’s major competitors include Binance US, Kraken, and Gemini. So how does Coinbase compare with other exchanges? Let’s take a detailed look.
Coinbase vs Gemini
CoinbaseGeminiMain featuresUser-friendly
Allows PayPal withdrawals
Easy to earn crypto interests
Secure and user-friendly
Many options to buy/sell
Earn interest in crypto
Fees0.5 percent on every trade
3.99% on credit card purchase
1.49% on CB wallet purchase
Fixed fee on less than $200
1.49% for trades over $200
3.49% on credit card purchase
Supported crypto coins120+60+SecurityTwo-factor authentication
FDIC insurance up to $250,000
Funds stored in cold storage
AES-256 encryption
Multi-signature wallets
Two-factor authentication
FDIC insurance up to $250,000
Gemini wallet digital insurance
Funds stored in cold storage
Supports hardware keys
Transfer limits$25,000 daily through ACH$30k per month on deposit $5000 daily on deposit
$100k daily ACH withdrawal
$1000 daily debit card purchases
Coinbase vs Kraken
CoinbaseKrakenMain featuresUser-friendly
Allows PayPal withdrawals
Easy to earn crypto interests
Low fees
Strong security
Many options to buy/sell crypto
Fees0.5 percent on every trade
3.99% on credit card purchase
1.49% on CB wallet purchase
0% – 0.25% per trade
3.75% per credit card purchase
0.5% + 0.9% + 1.5% for ACH
Supported crypto coins120+97SecurityTwo-factor authentication
FDIC insurance up to $250,000
Funds stored in cold storage
AES-256 encryption
Multi-signature wallets
Two-factor email authentication
Strong surveillance
SSL encryption
Cold storage
API key permission control
Transfer limits$25,000 daily through ACH$100k per day for intermediate members
Coinbase vs Binance US
CoinbaseBinance USMain featuresUser-friendly
Allows PayPal withdrawals
Easy to earn crypto interests
Low fees
Charting options
Hundreds of crypto pairs
Fees0.5 percent on every trade
3.99% on credit card purchase1.49% on CB wallet purchase
0.10% on spot transactions
4.5% on credit card purchases
Supported crypto coins120+100+SecurityTwo-factor authentication
FDIC insurance up to $250,000
Funds stored in cold storage
AES-256 encryption
Multi-signature wallets
Two-factor authentication
FDIC insured for US users
Device management
Cold storage
Whitelisted addresses
Transfer limits$25,000 daily through ACHDifferent limits for every coin
Is Coinbase the Right Cryptocurrency Exchange for You?
Without a doubt, Coinbase is among the most popular cryptocurrency exchanges. But is it the right exchange for you? After the recent scandals involving exchanges like FTX, cryptocurrency traders have become more careful about their choice of exchange.
Well, Coinbase is one of the most secure and user-friendly exchanges for beginners due to its intuitive interface on both the mobile app and website. This allows new users to quickly buy/sell up to 200 cryptocurrencies (this number continues to grow).
Along with that, Coinbase also offers an advanced trading platform for more advanced traders. This comes with enhanced trading tools such as charts from TradingView and more order types. It also allows access to advanced features such as dApp wallets and staking.
It also has an entire section dedicated to learning and educational tools. So, regardless of your level of experience with cryptocurrency, you can easily get started with Coinbase and trade cryptocurrencies.
So, who is Coinbase suitable for? It is suitable for both beginner and advanced traders alike who do not mind paying slightly higher fees in exchange for strong security and reliability. You can even earn up to 5.75% in interest on some set of coins.
However, customer service at Coinbase is almost nonexistent. That should not be a problem considering the fact that it has comprehensive learning resources. Still, it may not be the right exchange for people who find it difficult to handle their accounts on their own.
Coinbase Fees
Fiat Withdrawal and Deposit Fees
Coinbase updates its pricing periodically. Currently, it charges a flat fee on withdrawals and deposits depending on the method used. Here’s a quick overview of its withdrawal/deposit fee.
Deposit FeeWithdrawal FeeWire transfer (USD)$10 USD$25 USDSwift (GBP)Free£1 GBPSEPA (EUR)€0.15 EUR€0.15 EURACHFreeFree
Trading Fees
Coinbase follows a taker-maker fee model to calculate the trading fee. Maker orders are those that add liquidity to the platform. These are priced differently than the orders that remove liquidity (taker orders). These orders are further spread over different pricing tiers.
It is important to note that Coinbase periodically updates its pricing for the maker-taker model. As of current times, the platform charges the following trading fees on different pricing tiers.
Tiers for PricingMaker FeeTaker Fee$0 to $10,0000.40%0.60%$10,000 to $50,0000.25%0.40%$50,000 to $100,0000.15%0.25%$100,000 to $1 million0.10%0.20%$1 million to $15 million0.08%0.18%$15 million to $75 million0.06%0.16%$75 million to $250 million0.03%0.12%$250 million – $400 million0.00%0.08%$400 million+0.00%0.05%
Are Coinbase Fees High?
Despite the fact that Coinbase is among the most popular platforms, it is true that its fees can generally be high. So, it may not be very suitable for investors with limited funds, especially beginners looking for more cost-friendly options.
For instance, Binance US, which is a competitor of Coinbase, offers as low as a 0.10% fee on transactions. Similarly, Gemini’s ActiveTrader account is also beginner-friendly, with 0.30% transaction fees. On the other hand, Coinbase can charge up to 0.60 percent transaction fee for up to $10,000.
Whether the high fees on Coinbase are fair or not is an entirely different argument. In exchange for the high pricing, Coinbase offers strong security features and plenty of advanced resources. This might be an important consideration for more serious investors who are looking for higher security, especially after the recent crash of FTX.
Coinbase Customer Service and Satisfaction
Coinbase’s customer service is non-existent, and it is one of the biggest issues that users have with this exchange. If you end up running into an issue, it is impossible to reach out to a human support agent. Instead, you will be greeted with a chatbot and an automated phone system. At the same time, its email-support ticketing system is slow.
Due to this reason, most of the customer satisfaction issues of Coinbase exist due to its low level of customer support. Other than that, you may find yourself to be a satisfied customer. Just do not expect to receive much help navigating through locked accounts, hacked accounts, or issues related to scams.
Security and Privacy
Coinbase makes use of high-end security practices and anti-fraud measures to protect your funds and transactions. The verification levels also add to the system’s security, with each level having its own transaction limits.
The platform stores 98 percent of all the assets of customers in offline cold storage in its own network of deposit boxes throughout the world. These are supported by both paper and digital backups. On top of that, Coinbase uses bank-level encryption for its website, which adds to its online security. Furthermore, the exchange’s website runs on a fully encrypted SSI (https), and AES-256 encryption is used to secure the users’ passwords and OAuth tokens.
However, regardless of the strong security and privacy features offered by Coinbase, it is not uncommon for naive users to fall for cryptocurrency scams or hacking schemes.
Hence, it is important to always do your due diligence with strong passwords and withdraw your funds into a hardware wallet. Make sure to keep your private keys very safe and secure with backups in case you forget them.
How to Avoid Coinbase Scams?
Coinbase is a 100% legitimate cryptocurrency exchange but scammers will make use of various ways to take advantage of its popularity. Be aware of these fraudulent schemes as enumerated below.
Technical Support and Impersonation Scams
Never give support staff (or anyone else for that matter) remote access to your machine. This effectively gives the scammer full access to your computer, online financial accounts, and digital lifeNever give out your 2FA (2-Factor Authentication) security codes or passwords. Coinbase support will never ask you to share sensitive authentication credentialsNever accept outbound calls asking for your confidential personal information. Be aware that scammers can spoof legitimate phone numbers when conducting outbound callsOnly contact Coinbase via the phone number listed on https://support.coinbase.com/ or via email at https://support.coinbase.com/customer/portal/emails/newNever send digital currency to external addresses on behalf of alleged support agents. Coinbase staff will never ask you to send digital currency to external addresses
Giveaway Scams
While Coinbase Earn does offer a legitimate method for earning cryptocurrency, Coinbase does not engage in any giveaways.These payments cannot be reversed, and Coinbase will never ask you to send cryptocurrency to external addresses. Never send digital currency to giveaways under the guise of address verificationCoinbase’s legitimate social media profiles are listed in this helpful article. Any other profiles should be considered fraudulent
Investment Scams
Be skeptical of websites or services promising high returns or unrealistic investment opportunities. If it sounds too good to be true, it usually isOnly send cryptocurrency to trusted third parties. Search for publicly verifiable reviews or articles involving the recipientWatch for grammatical errors in communications or on websites. Scammers often make grammar or spelling mistakesResearch the organization thoroughly. Check consumer-protection websites, make telephone calls, and send emails to verify the authenticity
Loader or Load-up Scams
Never provide your passwords or security codes to third parties under any circumstancesReport any “loaders” to Coinbase and to the platform where they are advertising their credit card fraud
Telegram Scams
Coinbase has no official presence on the Telegram messaging platform. All varieties of scams can be found on this platform that targets Coinbase users, including fraudulent payment bots and giveaway scams. Read this blog post for more information on Telegram scams.
Employment Scams
All legitimate job postings will be posted on www.coinbase.com/careers No other URL should be trusted for job listingsAll legitimate communications with Coinbase recruiters will come from @coinbase.com email addressesPlease report any impersonations or fake job recruitment scams to security@coinbase.com
Phishing
One of the best ways to avoid phishing sites is to always make sure you’re accessing https://www.coinbase.com directly.sourcePhishers will often use URLs like www.c01nbase.com to conduct these scams. Detailed information on phishing can be found in this blog post.
Source: Coinbase
Final Verdict
Coinbase is an excellent exchange for investors who intend to trade cryptocurrencies safely. It is an amazing centralized exchange for cryptocurrency beginners who want a rather straightforward experience with buying/selling without having to worry about the complexities of decentralized exchanges and external wallets.
The option of trading in fiat makes it one of the best cryptocurrency exchanges to make transactions. Coinbase’s funds are also insured to ensure that customers are entitled to recover funds lost in the event of a hack or security breach, giving it an edge over other crypto exchanges.
However, it does not come without a few downsides. Most importantly, Coinbase does not have good customer service, and the pricing structure can be complex for new traders. On top of that, it charges high trading fees of up to 0.60% on amounts less than $10k on top of a fixed transaction fee. However, that can be balanced out by strong security features and FDIC insurance.
Notably, Coinbase is an excellent exchange for investors who intend to trade cryptocurrencies safely. The option of trading in fiat makes it one of the best cryptocurrency exchanges to make transactions.
Coinbase’s funds are also insured to ensure that customers are entitled to recover funds lost in the event of a hack or security breach; giving it an edge over other crypto exchanges.
Overall, Coinbase is a good centralized exchange for both advanced traders and beginner traders who want to get started with cryptocurrencies, as the user interface is very intuitive, and there are tons of educational resources available.
