With more than 30 million active users and $150 billion traded, Coinbase is considered the dominant cryptocurrency exchange on a global scale. Some people say that they provide one of the best cryptocurrency apps. But is that true?
Founded in 2012, the exchange has slowly but steadily paved its way to becoming an industry leader. Today, it is the world's biggest Bitcoin broker and the biggest cryptocurrency exchange. In the following Coinbase review, we will examine the pros and cons of Coinbase and find out why it is trusted by so many users.
We will also take a look at the reasons why the number of customers, let down by its service in recent years, is constantly growing. And finally, we will answer the frequently asked question - Is Coinbase safe?
What Is Coinbase
Coinbase was founded in 2012 and is currently one of the oldest exchanges. Ever since its first day, its aim has been to ease the process of buying, selling, and investing in cryptocurrencies. Although it started mostly as a Bitcoin brokerage, during the years, it has expanded its services. Today, Coinbase offers plenty of other features, such as a brokerage for other cryptocurrencies:
- Bitcoin Cash
- Ethereum Classic
The Coinbase Wallet is an integrated developer API, etc. This helped the company gain popularity and slowly paved its way to the top. Today, Coinbase is available to users from 102 countries, overcoming one of the most significant issues that cryptocurrency investors face - the country-specific limitations.
Now, let's proceed with the Coinbase App review by taking a closer look at the security aspects.
Security and Transparency
This is the first and most important characteristic that users should evaluate when choosing a cryptocurrency exchange. Coinbase adheres to the active U.S. regulations at a federal and state level. Some of the regulatory bodies and laws that the exchange complies with are as follows:
- FinCEN - Coinbase is registered as a Money Services Business within the US
- The Bank Secrecy Act
- The USA Patriot ACT
The fact that the company is backed by some of the leading investors adds a significant level of transparency to its business. Coinbase raused $217M from world's leading investors like USAA, FundersClub, USV, ICE, and NYSE. One of the most notable advantages of Coinbase is the fact that all investors' capital that is held online is insured.
On its website, the company states that " the insurance policy would pay out to cover any customer funds that are lost". However, Coinbase says that it keeps 98% of users funds in cold storages, distributed all around the world. Apart from that, it further enhances the security by employing 2FA on each account, as well as SSL and AES-256 wallet encryption.
On Coinbase users can trade the following instruments:
- Bitcoin Cash
- Ethereum Classic
- BAsic Attention Token
- USD Coin
- Augur REP
However, some other exchanges offering a wider variety of traded instruments. Yet, for those who are making their first steps in the cryptocurrency world or are willing to trade the most popular coins, then Coinbase is a great choice.
Fee Structure and Supported Payment Methods
Coinbase supports wire transfers (SEPA included), credit and debit cards. This makes it easier for beginner investors to purchase cryptocurrencies with just a few clicks. When it comes to the fees, it is worth noting that Coinbase is considered a quite expensive exchange.
Price Per Instrument
The prices of the listed instruments are similar to those on other trading venues, although they may be slightly higher than the market ones and Coinbase also charges a 0.5% spread for all cryptocurrency transactions. In addition to that, you will be required to pay a separate Coinbase Fee which is calculated as follows:
- Transactions with value ≤ $10 - a fee of $0.99
- Transactions with value ≤ $25 - a fee of $1.49
- Transactions with value ≤ $50 - a fee of $1.99
- Transactions with value ≤ $200 - a fee of $2.99
If you are paying with a debit or a credit card, you will be charged fees of approximately 3.99%. With that said, although Coinbase provides flexible payment methods. It charges high fees that depending on your trading strategy, may end up eating a big part of your gains.
Apart from the traditional cryptocurrency brokerage service, and compared to competitors like Prime XBT, Coinbase offers plenty of other features as well.
Formally known as GDAX (a popular cryptocurrency exchange, owned by Coinbase), Coinbase Pro is an advanced cryptocurrency trading platform.
It is a great way for users to experience crypto trading to the fullest. The advanced platform offers access to real-time order books, charting tools and trade history. It is highly intuitive and user-friendly, thus making it easy even for beginners.
The newest enhancement Coinbase Earn is now available to investors in over 100 countries. Coinbase already announced this program by the end of 2018. But it is not something like a bonus for investing in cryptocurrencies.
Instead, you get paid for taking quizzes about Zcash, Stellar Lumens, and Basic Attention Token. It's like participating in online surveys and not necessarily a good way of making money.
For its institutional clients, Coinbase also offers custody services. It charges up to $10 000 implementation fee, as well as a 50 bps annual custody fee. The account balance minimum is set at $1 000 000.
With its custody service, Coinbase targets hedge funds, banks and larger financial institutions that seek a secure and flexible way to deposit their capital.
The instrument is a great choice for those who are willing to take advantage of the benefits of crypto index funds. The Coinbase Index tracks the overall performance of the digital assets available for trading on the exchange, weighted by market cap.
Apart from that, Coinbase offers additional services such as the institutional trading platform Coinbase Prime. Now let's finish the review about Coinbase by taking a closer look at the customer service Coinbase provides. Is this something where they shine?
This is where Coinbase falls behind. In recent years, the exchange's reputation started to deteriorate and is now considered as rather controversial. Numerous users on Reddit and Trustpilot share their frustrations when using the exchange services even for basic Bitcoin buying and selling.
Users share many different problems, such as missing funds, inability to withdraw their capital, prolonged transaction times and other similar issues, resulting into losses. Those losses occur due to price fluctuations or inability to capitalize on certain market momentum, the main problem is the common lack of response from Coinbase's representatives.
Users, waiting for weeks for their problems to be solved, often end up choosing to move to a competitor exchange. Although there are plenty of clients, happy with the service they are getting, the amount of frustrated users in recent years really started to put Coinbase's reputation at stake. With Coinbase Pro the reported customer support issues are way less.
Coinbase is a simple and very easy to use exchange, considered by many as the best choice for newcomers. Yet, due to its pretty high fees and the limited number of investible instruments, Coinbase is often overlooked by experienced users.
Another fact that makes the exchange fall behind its competitors is the way it serves its clients. Although the company has invested plenty of resources into:
- simplifying the interface and
- the operation of its platform
the feeling is that Coinbase remains focused predominantly on satisfying its investors and achieving growth, rather than serving its clients efficiently. The truth is that, although the exchange is far from perfect, it remains one of the best choices in the industry and the easiest way to buy or sell cryptocurrencies.
If you are making your first steps on the cryptocurrency market or you are just a HODL-er who is not bothered by the high fees on Coinbase, then it is a great option to go for. However, bear in mind that although that the platform has invested a lot to ensure the funds of its customers are safe. It is always better if you store your coins in your own wallet.
The user can choose the payment method. Debit cards and a credit card are supported to use Coinbase. With a phone number and some personal information, the platform can also be used in the United States as a replacement for traditional fiat currency.
It is easy to get started with the digital currency, and the most popular way to fund the account is the bank transfer.
Clients can buy and sell various coins within the Coinbase account. The Coinbase fees should be considered before starting trading too frequently.
Please, note that bank transfers can take a few days for settlement. Coinbase is one platform, and you might consider checking some competitors first before funding the account.
Coinbase Review Questions and Answers
- Is Coinbase legit and safe?
- What Is the Coinbase Minimum Deposit?
- How to Close My Coinbase Account?
- What Are the Coinbase Alternatives?
- Can you convert Bitcoin to cash?
Is Coinbase legit and safe?
Coinbase is safe to use, and one of the most trusted cryptocurrency exchanges worldwide, and your funds are insured. It is also safe to link a bank account to Coinbase.
What Is the Coinbase Minimum Deposit?
There is no active Coinbase minimum deposit. It is upon you to decide how much you transfer and invest. People can start investing in cryptocurrencies with a small amount.
How to Close My Coinbase Account?
To close your Coinbase account, click "Close Account" on the Security Settings page. Once done, you can request to close your account.
What Are the Coinbase Alternatives?
There are plenty of other exchanges like CEX, Coinmama, Kraken, Gemini, Biance, Bitfinex, Poloniex, BitPanda, and others.
Can you convert Bitcoin to cash?
Fiat currency can be converted to cryptocurrency on most exchanges. The same goes for Bitcoin at Coinbase. Consider that a fee has to be paid for each transaction.