Contents
I have been a coinbase user since 2015 and you can say a lot about the company, good and bad. In this article, I will try to give you a complete overview so that you can assess for yourself whether Coinbase is reliable or not and especially if it is right for you.
Summary of the review by Coinbase
Coinbase is one of the largest cryptocurrency companies in the world, supporting over 100 countries, with over 30 million customers worldwide.
Coinbase has a wide range of services, but their core service allows users to buy and sell Bitcoins via bank account, credit card, and debit card. The rates you will get on Coinbase are fair in general, but the customer support is terrible.
If you want to know Coinbase in depth, read on. Here's what I'll cover in this review:
Coinbase overview
Services offered by Coinbase
Currencies and payment methods
Mugs
Purchase limits
Countries supported
Customer support and reviews
Coinbase vs other exchanges
FAQ
Conclusion - is Coinbase safe?
1. Overview of Coinbase
Founded in 2012 by Brian Armstrong and Fred Ehrsam as part of Ycombinator, Coinbase is one of the oldest cryptocurrency exchanges. Coinbase only started out as a Bitcoin brokerage service (selling Bitcoin directly to customers), but additional services have been added along the way.
Coinbase is fully regulated and licensed. The firm raised over $ 540 million from major investors such as Andreessen Horowitz, Rabbit Capital and The NYSE.
2. Services offered by Coinbase
Coinbase brokerage service
The main service that Coinbase offers is a brokerage service for buying and selling cryptocurrencies. New cryptocurrency users often find themselves buying their first Bitcoin through Coinbase due to the company's reputation, marketing, and relatively user-friendly interface.
On the downside, one of the main complaints of users on Coinbase is the user's lack of control over their funds. When you open a Coinbase account, you don't have direct access to your crypto and you don't get any private key.
Coinbase stores your cryptocurrencies for you - it's the equivalent of putting your money in the bank, you don't own it, but the bank.
Formerly known as GDAX, Coinbase Pro is a cryptocurrency trading platform. Unlike the traditional Coinbase brokerage service, which simplifies the purchase of cryptocurrencies, Coinbase pro is aimed at more experienced users.
Coinbase pro allows users to trade multiple cryptocurrencies including BTC, ETH, LTC, BCH and ZRX. The fees are considerably lower than with the brokerage service and there are advanced trading options as well.
In 2018, Coinbase launched its independent mobile wallet for Ios and Android. The wallet stores the private keys on the user's device and the user has access to the funds.
Solutions for traders
Coinbase provides online merchants with the ability to accept cryptocurrencies on their website via a dedicated plugin. The plugin is supported by some of the biggest CMSs (content management systems) like Shopify, Magento and WooCommerce.
Other projects
In addition to the above, Coinbase provides additional services such as:
USD-backed crypto (USDC) - A stablecoin built by Coinbase.
coinbase Index - Tracking the financial performance of all assets listed on Coinbase.
Custody Services - Cryptocurrency Protection for Institutional Investors.
Earn.com - A service acquired by Coindesk to filter spam.
Paradex (Paradex) - A platform for trading directly from a user's wallet.
Coinbase Ventures - Investing in companies that build the financial system.
Other features of Coinbase
Stakeout
Coinbase recently unveiled its Ethereum 2.0 staking feature that allows you to take part in the validation chain of a particular transaction.
Those who validate transactions on these blockchains can earn a stake reward. Users can earn between 3% and 7,5% on ETH stakes.
There is also no minimum transaction amount you need to set up to stage on Coinbase. This staking feature is currently in beta, but users can sign up for the waitlist on the Coinbase website.
Coinbase card
Users in the UK and Europe can also sign up for a Coinbase card that allows them to spend money on their cryptocurrency wallet. Coinbase cards work like regular debit cards and must first be activated when receiving the physical copy.
Coinbase VISA cards can be used wherever VISA is accepted. There is also a € 200 monthly limit of free withdrawals with a 1,00% fee for cash withdrawals after this. It usually takes around 5-7 days for Coinbase cards to arrive in the mail.
3. Base currencies and payment methods
Coinbase supports the following cryptocurrencies:
Bitcoin (BTC)
Ethereum (ETH)
Ripple (XRP)
Litecoin (SLD)
Bitcoin Cash (BCH)
EOS (EOS)
Starlight (XLM)
Classic Ethereum (ETC)
Zcash (ZEC)
REP
Dai (DAI)
USDC
0x (ZRX)
BAT
Algorand (Algo)
Cosmos (Atom)
Civic (CVC)
DASH
District0x (DNT)
Golems (TNT)
Kyber Network (KNC)
Chain link (LINK)
Loom network (LOOM)
Decentraland (MANA)
MKR
OXT extension
Tezos (XTZ)
Coinbase accepts the following payment methods:
Bank transfer (including ACH in the US and SEPA in the EU)
Credit cards (new cards are not currently accepted)
Debit cards
Cryptocurrency deposit and withdrawal
PayPal (withdrawal only)
4. Taxes
Coinbase's fee structure is a bit complicated, so I'll try to explain it as much as possible. When you buy Bitcoin from Coinbase, the price you pay is as follows:
The market price on Coinbase Pro +0,5
Transaction fee - A flat fee for transactions under $ 200 or a percentage of the transaction (whichever is higher).
Most transaction fees are 1,49% for standard purchases and 3,99% for credit card purchases.
Depositing money is free via ACH transfer, but otherwise it costs $ 10.
As you can see, giving a direct answer to how much you will pay in commissions is a bit difficult with Coinbase and is also one of the main complaints about the company from the community. Coinbase can also refuse the purchase if there are extreme price changes, as has happened several times in the past.
That said, Coinbase still has one of the lowest commission structures compared to other brokerage services like Coinmama and CEX.io.
Transactions between Coinbase accounts are free.
Transactions outside your Coinbase account require 3 confirmations before appearing on your account.
5. Purchase Limits
Once your Coinbase account is set up, you will be able to purchase a small amount of Bitcoin until you increase your limit. To increase your limits, you will need to do the following:
Provide and verify your phone number
Provide and verify your personal information
Provide and verify your identity card
If you are a fully verified US resident, you can reach the upper limit which is currently $ 25.000 per day. Limits can also be set based on the payment method chosen to purchase cryptocurrencies. For example, ACH transfer has higher limits than credit card purchases on Coinbase.
6. Supported Countries
Coinbase offers its services in over 100 countries:
Angola, Benin, Botswana, Cameroon, Ghana, Kenya, Mauritius, Namibia, Rwanda, South Africa, Tunisia, Uganda, Zambia, Armenia, Bahrain, Brunei Darussalam, Hong Kong, India, Indonesia, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyzstan , Macao, Maldives, Mongolia, Nepal, Oman, Philippines, Singapore, Taiwan, Uzbekistan, Australia, New Zealand, Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Gibraltar, Greece , Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia , Spain, Sweden, Switzerland, Turkey, United Kingdom, Aruba, Bahamas, Barbados, Bermuda, Canada, Costa Rica, Curaçao, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Trinidad and Tobago, United States United States, British Virgin Islands, Argentina, Brazil, Chile, Col ombia, Ecuador, Paraguay, Peru, Uruguay
7. Customer support and public opinion on Coinbase
Coinbase has a large knowledge base. Most of the standard questions are likely to be answered there. If you submit a support ticket by email, expect a response within 48-72 hours (from personal experience).
Coinbase also operates a telephone support line, although from the reader feedback we've received it seems like it's hard to find someone to fix your problem.
As for the quality of the media, the overall impression is negative. Most of the time, the support team does not dig deep into your problem and it is quite common to receive "trivial answers" that are not optimal for addressing the problem.
Many people in the community complain that Coinbase is not very customer support oriented and that many times the problems are not explained to the customer.
In summary, there has been a lot of controversy within the Coinbase community. If you are new to Coinbase, this is perhaps the only thing you should consider before making the decision to buy cryptocurrencies through Coinbase.
Accounts closed or frozen
Closure of accounts is probably the most common complaint against Coinbase. Due to the company's tight integration with traditional banking laws, such closures are inevitable. For better or for worse, Coinbase is committed to legislative compliance.
Coinbase was the first to receive regulatory approval from the United States. As a result, Coinbase has AML (Anti-Money Laundering) and KYC (Know Your Customer) security like any other bank.
Expect Coinbase to keep track of how you spend "their" cryptocurrencies and be able to summarily close your account for the following activities:
Adult Services Transactions.
Bitcoin gambling, including games of skill.
Selling or buying contraband on darknet markets.
Selling cryptocurrencies on other exchanges, especially those that don't have AML / KYC.
Other arbitrary reasons that anger their algorithm.
You can get your Coinbase account closed quite easily. While you will almost certainly get your money back, it will likely prove to be an embarrassing, frustrating, and potentially costly experience.
Further criticism
In addition to the above, Coinbase has come under further criticism, including:
Abuse of Affiliate Rewards - Coinbase offers a referral program, but it doesn't always pay its partners what they claim (based on my personal experience).
Taking a Stand in Bitcoin Debates - There are many "internal debates" in the Bitcoin community on Coinbase. Typically, a service is expected to remain neutral in these debates and follow natural market movements.
Patenting the blockchain - Coinbase has 9 patent deposits for "innovations" related to cryptocurrencies, including "bitcoin exchange", "HOT wallet for holding Bitcoin" and "tip buttons".
Such patents are obviously not Coinbase innovations and obviously conflict with the open-source nature and philosophy of Bitcoin.
Frankly, no company, agency or entity can or should trust legal authority over any aspect of the Bitcoin ecosystem. Bitcoin was designed to avoid the need for such trusted parties.
8. Coinbase against other exchanges
In the following section, I will compare Coinbase and its trading platform (i.e. Coinbase Pro) with other trading platforms.
Coinbase vs. Coinbase Pro
If you are new to cryptocurrencies, then it will probably be easier for you to use Coinbase (i.e. the brokerage service) than Coinbase Pro (formerly GDAX). As the name suggests, Coinbase Pro is for more experienced users who know how to handle advanced trading methods.
However, if you are an experienced trader, Coinbase Pro offers a much cheaper solution with a maximum commission of 0,25%, which is a fifth of what you pay for the brokerage service (and in some cases even less).
Coinbase against Gemini
Gemini is a cryptocurrency exchange founded by the Winklevoss brothers. Gemini's fee structure is even more complex than Coinbase's, and the overall fees are higher. Gemini's starting point is 0,35% while Coinbase Pro takes 0,25%. To beat it, Gemini users will have to trade more than $ 500.000 over a 30-day period.
That said, you should always check the market exchange rate on both exchanges, as there can be differences.
While most of the time they are more or less the same, in some cases price differences can occur and therefore the overall price you pay can be cheaper on Gemini (as the lower price compensates for the higher fees).
Coinbase vs. Binance
Binance is strictly a crypto-to-crypto exchange. However, the exchange has begun accepting credit cards for cryptocurrency purchases.
Looking closely at cryptocurrency taxes, Binance wins over the competition with an extremely low fee of 0,1% compared to Coinbase Pro's 0,25%. Binance offers a wider variety of cryptocurrencies. Click here to read our Binance review.
Coinbase vs. Robinhood
US investors can also use the Robinhood trading app to invest in cryptocurrencies.
On Robinhood they cannot withdraw Bitcoin or other cryptocurrencies from the app. This is only good if you are looking to trade and not hold cryptocurrencies.
Robinhood is available in 25 US states and claims to have a 0% trading fee, which is very competitive, even compared to Coinbase Pro. In addition to cryptocurrency trading, Robinhood also allows you to trade traditional stocks.
10. Frequently Asked Questions
Coinbase is it insured?
According to Coinbase's support page, all digital currency Coinbase keeps online is insured. Coinbase holds less than 2% of online customer funds. The rest is stored in cold storage.
Note that the insurance policy covers all losses resulting from a breach of physical security, cyber security or theft by Coinbase employees. This insurance policy does not cover any losses resulting from the compromise of your individual Coinbase account.
Digital currency is not backed by governments, and digital currency accounts and value balances on Coinbase are not subject to the protections of the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.
For US customers, Coinbase holds all customers' fiat currency (government issued currency) in confidential bank accounts or US treasury bills. If you are a resident of the United States, your Coinbase USD wallet is covered by FDIC insurance, up to $ 250.000.
How can I withdraw my money from Coinbase?
If you wish to withdraw money from Coinbase, you can do so with the following options:
From his bank account
To your PayPal account
To your crypto wallet (if you are withdrawing cryptocurrencies)
There is no option to withdraw fiat currency to your credit / debit card.
How long does it take to withdraw on Coinbase?
Usually, the withdrawal is instant with Coinbase, but it can take up to 3 days on your IBAN bank account to process the transfer. Cryptocurrency withdrawals should arrive within an hour (depending on how long it takes for the block to be confirmed).
Coinbase may delay digital currency transactions sent from your Coinbase account if it suspects that you have not authorized the transaction. In this case, you can either:
Wait 72 hours and the transaction will be done automatically
Accelerate your withdrawal by verifying your identity again
How safe is Coinbase to buy cryptocurrencies?
In general, Coinbase is considered to be a very safe place to buy cryptocurrencies.
Can i keep my Bitcoins on Coinbase?
Yes, you can keep your Bitcoins on Coinbase, but I don't recommend it. It is always best to keep your Bitcoins in a wallet where only you have the private keys. Keeping your Bitcoins on Coinbase is like keeping your money in a bank. It is very safe, but you have no control over it.
10. Conclusion - Coinbase is it safe to use?
Coinbase is simple and easy to use. The company has invested a lot of time and money to make their user experience easy and enjoyable. However, you don't have control over your cryptocurrencies and your transactions are tracked.
I think Coinbase is currently focused on growing and less on satisfying their existing customer base, which can be seen from the amount of negative feedback they get. However, if you don't run into any problems, the price is quite competitive.
My personal opinion is the same, you can use Coinbase to buy cryptocurrencies, the service is solid and easy even for the most beginners.
Referral
Coinbase offers a reward system for those who want to introduce their friends to the platform. Currently a referral can receive $ 10 USD (€ 9) for a purchase of at least $ 100. Learn more about Coinbase Referrals
Advantages and disadvantages of Coinbase
Benefits
Easy to understand
Great user interface for beginners
Relatively low taxes
Cons
You don't check your private keys
The accounts are monitored
Poor customer support
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