With the interest and investment in cryptocurrencies having surged over the past few years, the requirement for safe and secure exchanges to facilitate the purchase of crypto has become increasingly important.
One of the most popular exchanges that is currently available is Coinbase.
Launched in San Francisco in 2012, Coinbase operates in 32 countries and has served over 12 million customers to exchange over $40 billion in digital currencies.
By 2013, Coinbase was the highest funded Bitcoin startup as well as the largest exchange of cryptocurrency in the world. Unlike other exchanges that require users to trade on a market, Coinbase allows users to trade their cryptocurrency at a set price that is based on their market value, which allows users to purchase their cryptocurrencies faster than other exchanges.
Coinbase is one of the easiest exchanges to use to purchase Bitcoin & other cryptocurrencies with fiat via Bank Transfer, Credit Card, Debit Card & Even PayPal.
Read on for our full review.
Coinbase Fees
Coinbase charge fees ranging from roughly 1.49% to 3.99%, depending on your payment method, with credit card transactions resulting in fees at the higher end of the scale.
Coinbase fees are generally lower than other competitors who operate a similar business model, such as Coinmama or CEX.
Coinbase allows users to buy Bitcoin, Ethereum and Litecoin along with a whole range of other cryptocurrencies with more being added all the time.
In addition, Coinbase operates the Coinbase Pro exchange, which is intended to focus on more advanced traders.
Setting up a Coinbase Account
By following the below step by step guide, you will be able to buy cryptocurrency through Coinbase.
- Signing up – To create an account on Coinbase, all you need is your name, email address and password.
- Account Type – Upon request, you will be asked to confirm your email address. Once completed, you will be redirected to the startup page, where you will be first requested to confirm whether you want to create an individual or business account.
- Verify your Phone Number – The next step is verifying your phone number. The reason for this is to create a form of 2-factor identification in order to ensure that your account remains secure. Other 2-factor identification methods are also available, as set out below.
- Set up Payment Method – As stated above, Coinbase allows customers to choose from two payment methods – bank transfer and credit card. For bank transfers, Coinbase will often set up one or two small transactions to and from your account, in order to verify your account. For credit cards, a screenshot of the credit card is necessary. Bank transfers in the US can take up to 4 to 5 days to complete, or 1-3 days by SEPA transfers in the EU, while credit and debit card transactions are instant. Coinbase also allows for users to link their Paypal account to the platform, but this can be used for proceeds made from selling cryptocurrency only.
- Buy Cryptocurrency – Once you have funds in your account you can buy currency. It’s important to make sure that you are on the right tab of your account to purchase the correct currency. Before confirming the transaction, Coinbase provides you with details of the service fee and the amount of cryptocurrency being purchased in the transaction. Once confirmed, the amount of cryptocurrency that you have purchased will be credited to the relevant Coinbase wallet.
Is Coinbase Safe?
One of the perceptions of cryptocurrency among newcomers to the platform is that it is still risky to invest in. And although it is correct that there have been issues around cryptocurrency exchanges in the past (such as Mt. Gox),
Coinbase is considered to be one of the most secure platforms currently available. First of all, Coinbase is US based and is therefore required to comply with US State and Federal law. This can be contrasted with some of their competitors that operate in countries that may have lighter regulations when it comes to such platforms.
Coinbase has actively pursued discussions with regulators in order to ensure that they were providing an open and innovative financial system and the regulation of Coinbase is considered by some to have restored confidence in cryptocurrencies following the Mt Gox collapsed (although other commentators have complained that Coinbase operates more like a bank, which, within the community, is against the fundamental nature of a decentralised cryptocurrency).
In addition, Coinbase has received investment from a number of high-profile backers, including the Bank of Tokyo and BBVA, which boosts its legitimacy
When it comes to storage of funds, Coinbase is transparent about its methods. Coinbase segregates customer funds from company operational funds, with Coinbase stating on their website that any funds held on behalf of customers are stored in custodial bank accounts and, in the event of insolvency, neither Coinbase nor its creditors would have any rights or entitlements to such customer funds.
In terms of its cryptocurrency storage, Coinbase states that 98% of customers’ cryptocurrency funds and stored offline, through hardware wallets and paper wallets that are stored in vaults and safety deposit boxes worldwide.
In addition, Coinbase states that the remaining portion of cryptocurrency that is stored online is insured, and that in the event of a hack, customers will be entitled to receive any funds lost through this insurance policy.
Coinbase offers customers a 2-factor authentication method, which can be through SMS to your phone, or through third party apps such as Google Authenticator or Duo.
In addition, Coinbase notifies users if a new device or IP address attempts to access your customer account. However, despite this, if customer accounts are compromised, Coinbase does not accept any liability for funds being lost. For that reason, it is typically recommended that once you have purchased any cryptocurrency on the Coinbase exchange, you store this cryptocurrency offline in a wallet that you control.
We have written a separate post which goes into more detail about the security of coinbase.
Coinbase Customer Support
Coinbase offers customer support through email, as well as having a Knowledge Base and FAQs page available for customers.
Wait times for customer support may vary, with the huge increase in demand for the service in recent months resulting in some delays.
However, typical response times tend to be within 24-72 hours. Some users have expressed frustration with receiving “canned responses” that don’t entirely address the issue raised.
Supported Countries
Coinbase serves customers in the following countries:
Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States.
Transaction Limits
Transaction limits vary from country to country, as well as variations as a result of payment methods and verification status. You can view your limits through a link on the account’s limits page. Coinbase also allows users to apply for higher limits, although these applications are not generally applicable to credit card transactions.
To apply for higher limits you will need to verify your identity and fully verified US residents can transaction up to $50,000 per week, while verified European customers may have a maximum of $30,000 in their account at any time. Users can check their limits through their account.
Transactions Using Cryptocurrency
It is easy to store, send and receive cryptocurrency through Coinbase:
- To send or store crypto all you need to do is navigate to the Send tab of your account, choose the wallet you wish to send coins from, enter the amount and the public key of the recipient address and click send.
- To receive cryptocurrency, you need to navigate to the Accounts tab, click on the wallet where you want funds to go and click Receive. Once you’ve clicked receive you will be provided with your account’s wallet address which can be used by the sender to transfer the cryptocurrency to you.
Coinbase vs Coinbase Pro ( formally GDAX )
In 2015, Coinbase rebranded the exchange element of the company as GDAX and then again in 2018 to “Coinbase Pro”, to separate the ‘trading’ element of the exchange from the more casual consumer platform.
You will find that you can avoid Coinbase fees by using GDAX as your buying / trading platform by sending a bank transfer to Coinbase and then using Coinbase Pro for purchasing.
All Coinbase customers automatically have an account on Coinbase Pro, you login with the same credentials as you would on the Coinbase website. You can find out more about the two exchanges in our Coinbase vs GDAX comparison post.
Coinbase Pro is designed to appeal to more advanced traders who want to know more than just the basics of market fluctuations related to cryptocurrency pairs.
There are real-time orderbooks, trade histories, and charting tools. At the same time, the interface on Coinbase Pro is highly intuitive, making it possible for traders to start using the platform right away.
If you want to find out more about their Coinbase Pro offering, read our complete review here.
Monitoring of Accounts
One of the criticisms from the online community about Coinbase is that has been known to track where its customers send their cryptocurrency, and may ban users from making certain transfers (for example for transactions with gambling sites or darknet purchases).
Coinbase is also involved in a running dispute with the IRS where they are fighting requests to hand over all customer’s financial data under a “John Doe” summons.
Coinbase Downtime
Back in 2017 when the Bitcoin price was been surging to new heights, seemingly on a daily basis. During these periods of extremely high usage, there has been some downtime for the site and the app which has been causing people to be unable to trade or purchase on the system. Unfortunately these are part of the growing pains of the service which is adding customers at an unprecedented rate.
Coinbase has assured it’s customers that they are working on the scaling problem – it is not a huge deal at the moment and has only seen a few hours downtime in total but we thought we’d mention it. This seems to be a common problem across a few exchanges which are all straining under the weight of soaring usage and new people looking to get involved in Cryptocurrencies.
Coinbase seems to have this problem under control now but we will have to wait and see when the next bull run happens whether that have added enough capacity to handle the loads.
Coinbase Custody
Coinbase also offer custody for cryptocurrency assets for institutions in the form of their custody program, which charges a setup fee of $100,000 and a minimum holding of $10million so you can see it is aimed at banks, hedge funds and other finance institutions who would require such a service.
While the program is still in its early phase, they already have their first client and have accepted their first deposit. Custody services are a way for large financial organizations to securely deposit their assets in a way that is insured. This service, the first of its kind, could lead to larger institutional adoption of cryptocurrencies at large.
Coinbase and Paradex
Recently, Coinbase announced the acquisition of Paradex which is a decentralized exchange for Ethereum ERC-20 tokens, they are hoping to integrate some of this into their offerings and make a wide range of tokens tradeable on their Coinbase Pro platform.
This is good news for their customers and indeed any holders of coins which will be listed as this should greatly increase the exposure of these assets to a wider range of people.
Instant UK Bank Purchases
Coinbase have recently rolled instant UK bank account purchases, that means you are now able to link any UK bank and enjoy near-instant purchases of their supported currencies.
It also means you can deposit and withdraw back to your bank making Coinbase one of the fastest and most efficient ways to convert your coins back to fiat.
Before this step, the process took a lot longer and involved international bank transfers and more fees involved in the conversion of cryptocurrencies. If you are based in the UK, this is a huge positive for using Coinbase as your fiat on-ramp and off-ramp.
Visit your account settings page and click “Link a New Account” to see the new UK Bank account option.
Coinbase Bundle
Another new addition to the Coinbase platform is their “Coinbase Bundle”. The bundle is an easy way to buy all 5 cryptocurrencies they currently offer ( BTC, ETH, LTC, BCH, ETC).
Onside your account you will see the option to purchase the Coinbase bundle, you simply enter an amount you wish to purchase and it will automatically be split between the coins as follows:
- 75.2% Bitcoin
- 15.58% Ethereum
- 6.11% Bitcoin Cash
- 2.33% Litecoin
- 0.78% Ethereum Classic
This is an easy way to gain exposure to the coins currently available on Coinbase.
Coinbase Custody
Coinbase also operates a custody service aimed at financial institutions and segregates and holds digital assets in trust for the benefit of its clients. Coinbase Custody operates as a standalone; independently-capitalized business to Coinbase Inc. and is a fiduciary under New York State Banking Law.
In addition, it is fully insured, regulatory compliant, undergoes regular external financial and security audits, and is SOC 2 Type I certified with SOC 2 Type II, and SOC1 Type II certification expected in the near future.
Coinbase simplifies the process of purchasing and securely storing high quantities of cryptocurrencies for institutional investors, and there is currently an implementation fee of up to $10,000 and clients are expected to retain a minimum holding balance of $1,000,000.
Coinbase Staking
The custody service also allows asset holders to “stake” their tokens, and the team have unveiled Tezos (XTZ) staking for their clients, and the ability to participate in staking allows institutions to securely participate in Proof-of-Stake (PoS) based projects that reward parties for helping to secure the blockchain network by staking their assets.
Client assets are held in segregated cold storage, and Coinbase Custody runs its own nodes and validators and operates first class, institutional grade security and infrastructure standards. In addition to staking, Coinbase Custody will soon introduce governance support for the Maker (MKR) protocol, with Maker and Tezos voting expected to be integrated in Q2, 2019.
Key Features:
- Security – Coinbase Custody uses 100% offline, segregated storage for all client funds, and posts all bond requirements for its stakers.
- Compliant – Coinbase Custody is a fiduciary and qualified custodian and offers staking services as a non-discretionary fiduciary activity to its clients.
- Simplicity – Clients can enjoy simple deposit, withdrawal, reporting and consensus features across all assets on Coinbase Custody.
OTC Trading
Coinbase Custody is also integrated with Coinbase’s OTC desk and the vertically-integrated custody service provides clients with access to instant and anonymous liquidity. The Custody team completed its first OTC trade directly out of cold storage in March, and the OTC desk is agency-only, with all counterparties required to adhere to robust KYC and AML policies.
However, with Coinbase acting as an intermediary, the anonymity of the involved counterparties is preserved whilst guaranteeing settlement.
Custody clients can leverage the OTC desk to price and confirm trades before moving funds, and the OTC and Custody client service teams work together to simplify the entire process. Any clients initiating positions can buy OTC and settle assets directly into Custody.
Key Features:
- Quick trading for offline funds
- Agency-only OTC desk provides anonymous access to trusted counterparties
- The OTC and Custody client service teams provide a seamless process from pricing risk through to trade settlement
The USDC Stablecoin
Coinbase also supports the USDC currency (USD Coin), an ERC-20 token and “stablecoin” with a price pegged to the price of the US Dollar. As a result, holders of the coin will always be able to redeem 1 USD Coin for US$1.00 and protect themselves from the volatility of holding digital assets such as Bitcoin and Ethereum.
USDC is minted by Centre, a consortium that collectively holds US$1.00 for every single USDC with the funds being held in a consistently monitored and audited bank account. The stablecoins are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency, and these issuers are required to report their USD reserve holdings on a regular basis with Grant Thornton LLP producing monthly reports on these holdings.
As a result, USDC is fully transparent and the project works within US money transmission laws, and the CENTRE open source technology project received early stage financial contributions from Circle and Coinbase, helping it to develop and it remains responsible for governing the currency and connecting its growing body of users and network of various stakeholders.
In addition to being supported by Coinbase and Coinbase Pro, USDC is also tradable on leading exchanges such as Binance, Bitfinex, Kucoin, OKEx, and Poloniex. As an ERC-20 token is also integrates with a variety of wallets, and can be used on decentralized platforms such as Bitpay, BlockFi, Dharma, Nexo, Melonport, and Loom.
How to earn free crypto with Coinbase
As part of its mission to create an open financial system, and make blockchain technology more accessible, the exchange operates the Coinbase Earn learning portal which allows users to earn cryptocurrencies, while learning about them at the same time.
Coinbase Earn aims to incentivize users to develop a deeper understanding of a digital asset, as well as its underlying technology, and does this by making easy to consume, educational content readily available.
Verified users are able to earn crypto by completing a series of educational tasks such as watching videos, and filling out quizzes, and the initiative is open to eligible individuals located across the globe.
In addition to watching tutorials and answering quiz questions, users are also rewarded for sharing their unique referral links, and inviting other eligible friends to complete the lessons.
It’s currently possible to take courses on digital currencies such as Stellar Lumens (XLM), Zcash (ZEC), Basic Attention Token (BAT), and 0x (ZRX) with further currencies expected to be added in the future.
The Coinbase Wallet app
The Coinbase Wallet is a user controlled non-custodial digital currency wallet and decentralized app (dApp) browser.
Here, the private keys (that represent ownership of digital asset) are stored directly on your device and not held centrally on an exchange. This places users in control of their funds and there’s no need to have a Coinbase Consumer account in order to use the wallet.
The wallet is available to both iOS and Android users, and the app can be downloaded from the Apple and Google Play app stores.
Once downloaded, users can link their Coinbase.com accounts to the Coinbase Wallet app, and after completion, can easily transfer crypto to the wallet app at anytime with just a few clicks.
The wallet incorporates multi-coin support and allows users to manage popular cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and all ERC-20 tokens including the USDC stable currency.
In addition, the wallet also allows for the storage of digital collectibles and holds all ERC-721 collectibles and unique digital characters and creations.
The Coinbase Wallet also integrates with a range of dApps, and allows users to engage online games, and marketplaces, as well as in decentralized finance (DeFi) projects like Augur, and trade on decentralized exchanges and relayers like Kyber Network, Paradex, and Radar Relay.
The wallet is secured as users’ keys are protected with Secure Enclave and biometric authentication technology, and each users is in sole ownership of (and has sole knowledge of and access to) their private keys.
How to use the Coinbase Wallet App
- Download either the iOS or Android app
- Connect your Coinbase.com account by clicking “Connect Now” in the notification, or by selecting “Connect to Coinbase” from the Settings menu.
Once your account is linked, you can transfer funds from the Setting menu at any time, and you can also use the Settings menu to unlink your account whenever necessary.
You can find out more by reading our article covering the Coinbase Wallet integration.
The Coinbase Card
The recently announced Coinbase Card allows Coinbase customers based in the UK to easily spend cryptocurrencies both in-store and online.
The card can be used at any location integrated with the Visa network, and customers can use their card in millions of locations around the world, make payments via contactless, Chip and PIN technology, while also making cash withdrawals from supported ATMs.
The Visa debit card is linked to customers’ crypto account balances on Coinbase, giving them direct access to spending a variety of cryptocurrencies, and when using the card, Coinbase instantly converts the crypto to fiat currency, currently GBP, which is then used to complete a purchase.
The Coinbase Card is the first debit card that directly links with a leading cryptocurrency exchange in the UK and EU, and the card facility is currently available in the UK, with support for other European countries planned in the coming months.
See more Bitcoin Debit cards.
Fees and Spending Limits
- Plastic Card Issuance Fee: £4.95
- Domestic Cash Withdrawal Fee (applies to both ATM and Over the Counter “OTC” withdrawals):
- Up to £200 per month: Free
- Any amount over £200 per month: 1.00% of value of ATM withdrawal (per transaction)
- International Cash Withdrawal Fee (applies to both ATM and Over the Counter “OTC” withdrawals):
- Up to £200 or currency equivalent per month: Free
- Any amount over £200 or currency equivalent per month: 2.00% of value of ATM withdrawal (per transaction)
- Domestic Purchase Transaction Fee: Free
- Intra-EEA Purchase Transaction Fee: 0.20% of value of POS transaction
- International Purchase Transaction Fee: 3.00% of value of POS transaction (per transaction)
- Card Replacement Fee: £4.95 (per Card issued)
- Chargeback Processing Fee: £20.00
- Crypto Liquidation Fees: 2.49% of transaction
Currently, Coinbase Card users must adhere to the daily spending limit of £10,000, in addition to the monthly purchase limit of £20,000 and yearly purchase limit of £50,000.
There is also a daily ATM withdrawal limit of £500, and customers can contact cardsupport@coinbase.com in order to change their daily spending limits.
A complete list of fees and limits is included in the Cardholder Agreement, which can be found in the Coinbase Card App Setting.
The Coinbase Card app enables customers to access their accounts on the go, and select which of their crypto wallets they will use to fund their card spending.
The app also provides instant receipts, transaction summaries, and spending categories with both i0S and Android versions available and the app can be downloaded on the Apple and Google Play app stores.
In order to celebrate the launch of their crypto debit card, Coinbase are waiving the £4.95 card issuance fee for the first 1,000 people who sign up to join the waitlist.
Customers can download the iOS and Android app and link their Coinbase account, after linking any crypto balances held on Coinbase will be immediately available to spend via the virtual card with the Coinbase Card later being sent in the post.
Coinbase Security
Coinbase continues to take the protection of customer data seriously and employs a number of security protocols to safeguard sensitive information. For example, passwords and OAuth tokens are stored using AES-256 encryption on their servers, and all traffic goes over SSL to prevent third parties from monitoring connections.
Furthermore, all personal data is held by Coinbase and its partners securely and in accordance with all applicable laws, including the Data Protection Act 2018 and the General Data Protection Regulation, further details can be found within Coinbase’s Privacy Policy.
In addition, the Coinbase Card is fully regulated and issued by Paysafe Financial Services Limited, who in turn is authorised by the Financial Conduct Authority (FCA) under the Electronic Money Regulations 2011(FRN: 900015) for the issuing of electronic money and payment instruments.
Cards currently take anywhere from 5 to 7 business days to arrive, after being ordered, with card during the week in the afternoons. Cards ordered after this time will generally be sent out the following business day.
Further Expansion
The exchange has also recently announced further developments regarding its expansion plans with customers across Latin America and Asia being provided with greater access to the Coinbase service.
Approximately 11 new countries across both regions have been integrated into the Coinbase network and users in close to 53 countries across four continents are now able to purchase, store, trade, send, and receive cryptocurrencies on Coinbase.com and Coinbase Pro.
Customers in Asian hubs like Hong Kong, India, Indonesia, South Korea, and the Philippines; as well as the inhabitants of Latin American countries including Argentina, Chile, Colombia, Mexico, and Peru have all been welcomed to the fold, in addition to New Zealand of Oceania.
Conclusion
Although it’s not perfect, Coinbase offers customers (and especially newcomers to cryptocurrency) a practical and easy-to-use service for buying and selling cryptocurrency.
However, as with any online exchange, despite the security levels outlined above, the recommendation will always be that any cryptocurrency purchased through Coinbase should be transferred to personal wallets allowing you to have full access to the private key to your cryptocurrency.
Overall, it is a good introduction to the world of cryptocurrency and allows users to dip their toe into the world of cryptocurrency without it feeling like it’s a strange new world.
We have updated this review in 2020 to cover all the new options and features which Coinbase have been introducing.
They continue to go from strength to strength and remain the safest and easiest way for newcomers to get involved in cryptocurrency. They have rightly earned their position as a leader in the field.
The post Coinbase Review: Ultimate Guide to The Top Crypto Exchange appeared first on Blockonomi.
November 10, 2021 at 09:22PM https://blockonomi.com from Blockonomi https://ift.tt/3Db8snt
Comments
Post a Comment