Coinbase, a US-based fintech company founded in 2012, is one of the most popular cryptocurrency exchanges in the world with over 20 million customers in 42 countries. It offers wallet and exchange services for inexperienced traders, cryptocurrency enthusiasts and institutional investors which are backed by Federal Deposit Insurance Corporation (FDIC) protection for US residents and is registered as a Money Services Business with FinCen.
This Coinbase review will take a good look at its brokerage, exchange and wallet services for everyday users, including how to get set up, verification requirements, security, privacy, digital assets and products offered. Find out if Coinbase is the right option for you by reading this Coinbase review.
Coinbase the company
Coinbase has two company priorities, to “be the most trusted” and to “be the easiest to use”.
In terms of trustworthiness, Coinbase has a pretty strong reputation due to its long history and experience as a Bitcoin broker. Over time, it has expanded its services and is currently regulated by FinCEN and follows various laws and regulations such as the USA Patriot Act and the Bank Secrecy Act to ensure that customers enjoy a secure experience with a legitimate company.
Coinbase complies with EU GDPR regulations and US residents receive FDIC insurance up to USD 250,000 for all US dollars deposited and held in Coinbase accounts which are in turn held in US Treasury or in custodial bank accounts. International customers’ fiat funds are also held in custodial bank accounts. Although not terribly important to the average user, it is worth noting that the company has enjoyed strong growth and received USD 217 million in investments from a wide range of entities including BBVA, Reddit co-founder Alexis Ohanian, Bank of Tokyo, Digital Currency Group and Blockchain Capital.
As for ease of use, the platform is well suited to beginners and no trading experience is required. Coinbase makes the process of buying cryptocurrencies uncomplicated and quick.
Coinbase currently operates in the following countries:
|Isle of Man
Those that are not residents of these countries can use some of Coinbase’s services such as their wallet to send and receive cryptocurrencies, however, won’t be able to buy or sell them.
Products and accounts
Coinbase has expanded its service in recent years to cater to a wider range of customer needs. We will go over them quickly, however, in this review, we will be focusing primarily on Coinbase for everyday customers.
For everyday customers: Coinbase online wallets, exchange services and the ability to buy and sell cryptocurrencies.
For advanced users: the Coinbase Pro trading platform, Paradex for Ethereum token trading and asset management.
For businesses: accounts with the ability to receive cryptocurrency payments.
For institutions: cryptocurrency custody, the Prime trading platform.
Conveniently, Coinbase has a mobile app which makes it easy to trade and exchange on the go with either iOS or Android devices.
Setup and verification
To open an account with Coinbase, users must also verify their account with a photo of a government-issued ID uploaded either via the mobile app or the website. US customers should note that a state issued ID is required such as a driver license. US passports cannot be processed.
The rest of the setup process is self explanatory and similar to that of many other exchanges. As Coinbase is a registered entity, it is required to complete a thorough identification process as part of KYC responsibilities and may also require a social security number from some users.
Once your account has been verified then you can begin trading and exchanging any of the many cryptocurrencies supported by Coinbase.
Coinbase supports 15 cryptocurrencies and although its range could perhaps be wider, it does contain most popular and widely-traded coins.
The Pro and Prime trading platforms give users access to several more altcoins. However, these platforms are better suited to advanced and institutional traders, and are beyond the scope of this review.
Account funding and fees
Payment options and their associated fees depend on your country of residence.
Users have the ability to deposit via bank transfer (SEPA transfers for European users), wire transfer or credit/debit card. Bank transfers (ACH) and credit/debit cards will have to be added to your account as a linked payment method and verified.
Note: according to Coinbase, it is no longer accepting new credit cards and recommend using a debit card or bank account instead.
Coinbase’s fee schedule is somewhat complicated, which can cause some confusion and has led to some negative feedback from users but we will attempt to explain it as simply as possible.
When buying cryptocurrencies with fiat funds the total fee consists of two parts. The first part is the price as shown on Coinbase Pro with an added spread of 0.5% as Coinbase attempts to fill the order with other orders from Coinbase Pro.
The second part is a transaction fee that is dependent on how much is being deposited and how it is deposited. When less than USD 200, a flat fee depending on the amount is charged and when above USD 200, then a variable fee is charged depending on payment method (or whichever is larger).
For example, when purchasing USD 100 of Bitcoin, a flat transaction fee of USD 2.99 would normally be charged. However, when purchasing via debit card, purchases attract a fee of 3.99%, the 3.99% of USD 100 (or USD 3.99) would be calculated as the transaction fee instead of the flat USD 2.99 fee, as it is the larger one.
When using Coinbase’s exchange platform, a crypto-to-crypto exchange will be subject to an approximately 1.00% spread and no transaction fee. You can also transfer between different wallets on Coinbase free of charge. ACH bank transfers are free and wire transfers cost USD 10 with a USD 5,000 minimum deposit and USD 25 with a USD 25,000 withdrawal maximum. More information on fees and payment options by location and method can be found here.
Although the fee structure is sometimes not so easy to follow, it is reasonable when compared to other large exchanges.
Buying limits apply and depend on your account level which is based on the level of verification reached. To increase buying limits the following steps can be taken:
Verify phone number
Verify personal information
Verify photo ID (valid state ID for US customers)
When all of these have been completed, then a typical US resident will be able to purchase USD 25,000 per day.
Security and privacy
Coinbase uses several security features to protect users and themselves from various forms of theft.
Coinbase uses hot wallets to hold 2 % of funds for trading and fluidity with the remaining 98% held in cold storage
2 Factor Authentication available
Bank account numbers and routing codes protected by bank level AES-256 encryption
SSL connection using the platform to prevent other people from seeing your communication/actions on Coinbase
Background checks are done on all employees
Although Coinbase takes security seriously, as it is an online wallet and exchange service, it can never be immune to all threats and you do not have total control over your cryptoassets. A more secure option would be to use a hardware wallet to store your crypto after having bought or exchanged your funds.
Coinbase states that their policy of retaining IP addresses and tracking the movement of funds purchased on the site aims to prevent money laundering. This has irritated some users, particularly those that have had their accounts suspended because they sent crypto to the darknet, gambling sites or Localbitcoins, all of which may lead Coinbase to close an account.
Coinbase has spent a lot of time and energy to ensure that the process of buying and selling cryptocurrencies on the site is as painless as possible. However, it is not immune to customer service issues. Unfortunately, it is not difficult to find complaints about the platform on various internet forums and reviews, usually in relation to their customer support services.
That being said, we didn’t have any problems when dealing with their customer support and they do have a very good FAQ page that covers a range of topics which is a good starting point before looking to customer support for help. If you would like to contact customer support then you can do so via their ticket service, their support bot, via email@example.com or by phone on the following numbers:
US/international : +1 888 908-7930
UK : 0808 168 4635
Coinbase review summary
As one of the oldest cryptocurrency exchanges and broker services in existence, Coinbase has had a lot of time to polish its services into some of the easiest to use there are. In terms of fees, for brokerage services such as those offered by Coinbase, it is competitive, as is its range of cryptocurrencies.
Perhaps the main issue with this platform is its customer support which has been subject to criticism in the past as well as privacy concerns due to the extensive verification process we mentioned previously in this Coinbase review.
In summary, it is fair to say that Coinbase is reputable and best suited for those that are new to the cryptocurrency industry or buying/trading small to medium quantities of cryptocurrencies. It provides a secure, regulated environment that simplifies the process of purchasing, selling and trading. If you feel that Coinbase is right for you, then you can sign up here.
Disclaimer: BitcoinNews does not provide any warranties towards the accuracy of the statements in the above Coinbase review. Any content on this site should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to perform your own research of the platform. Trading and investing in cryptocurrencies involves considerable risk of loss and is not suitable for every investor.
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