What is Coinbase?
With more than 200 exchanges trading in thousands of cryptocurrencies everyday, it can be difficult for a beginner to know exactly where to start in this market. What separates one exchange platform from the next? Can they all be trusted? Are some better than others?
One exchange that has been around for a while is Coinbase, and as it grows into its seventh year of existence, it is still going strong. In this thorough Coinbase review we’ll look at all the factors that make this exchange one that makes it to your shortlist. And we’ll offer some advice on reasons that you might want to choose this over another exchange (or vice-versa).
Coinbase was founded in 2012 in San Francisco by Fred Ehrsam and Brian Armstrong. Ben Reeves, co-founder of blockchain.info also helped found Coinbase, but quickly left the team after a difference in opinion about how the exchange’s wallet should function.
By 2014, Coinbase already had 1 million users. It continued to receive multi-million dollar investments and brokered deals with well-known companies like Dell and Dish Network to help them accept bitcoin payments from customers.
Today, Coinbase has more than 13 million users operating in 32 countries around the world. It has remained a steady contender in the crypto exchange marketplace due to its ability to provide faster trades and facilitate fiat currency transfers.
Trading on Coinbase
Trading on Coinbase is easy, though setting up your account does require a few more steps than some other exchanges.
You’ll either have to verify a few small transactions to your bank account (which can take a few days to go through) or you’ll have to upload a screenshot of your credit card. All new accounts also require photo ID verification. While these additional steps may seem like a hassle, in the end they are for your protection.
Once your account is established and verified, though, trading is very simple. Just choose the tab you want (buy or sell), and then select your desired cryptocurrency. Pick a payment method, enter the amount you want to trade, and hit the button to initiate your trade.
Trading on Coinbase is subject to limits. Most customers can trade up to $25,000 per day by using bank account transactions. This limit can even be raised by enabling wire transactions, which are unlimited. Credit card transactions are more limited (due to the increased chance of fraud), but still have limits that are reasonable for any small time trader. More serious investors will want to use one of the other methods.
Fees on Coinbase
One of the turnoffs of Coinbase is its confusing fee structure. In fact, their support article in which they outline fees and pricing is more than a thousand words long! We’ll try to summarize the most important points below:
- There are no fees for depositing into your Coinbase account.
- Every buy/sell transaction includes fee that is the greater of (1) the flat fee outlined on the table below or (2) a variable percentage based on region and payment type. The variable percentage fees range from 1.49% to 3.99%.
Less than or equal to $10
$10 – $25
$25 – $50
$50 – $200
An important point to note is that fees are applied to the value of the crypto exchange you are trading in. So, if you are buying $100 worth of BTC and are subject to a $2.99 fee, you are actually only receiving $97.01 in BTC.
While Coinbase doesn’t support as many cryptos as some other exchanges, it still boasts a pretty big list. Some options are only available on Coinbase Pro or Coinbase Prime, two advanced exchanges operated by the same company. At the same time you can deposit with fiat currency on Coinbase. Coinbase accept bank transfer, sepa transfer & credit card deposit.
Here is a list of all of the coins currently supported on Coinbase in the U.S.:
Coinbase has adequate customer support. With email support and an expansive knowledge base of FAQs, you’ll be able to get the information you need. There are complaints that email support can be a little slow (with some tickets not getting a response for as much as 72 hours). However, they do offer phone support for anyone seeking immediate help.
No one wants to trust their cryptocurrency with an insecure exchange. So where does Coinbase stand? Is Coinbase safe?
Actually, it’s about one of the most secure platforms you can find to exchange cryptocurrency on. Since it is headquartered in the U.S., Coinbase has to adhere to stringent state and federal regulations regarding financial information security. It’s even received investments from big name organizations like the Bank of Tokyo. If another financial institution can trust the security of Coinbase, users should be able to as well.
Coinbase is also very open about the security measures it takes. According to their website, 98% of all customer funds are stored offline and that the remaining funds are insured. This means that even if a cyber attack did threaten the money of users, they would be compensated for any loss.
Pros & Cons of Coinbase
Coinbase has persisted in the crypto exchange world since 2012 for a reason. Users love the intuitive platform and the ease of making transactions in fiat currency. It is a perfect exchange for beginners who want to start trading without a lot of experience with acquiring cryptocurrencies ahead of time.
While it might not allow you to trade in the obscure or up-and-coming coins, Coinbase is still a simple solution for anyone looking to get started in the crypto market.