Coinbase is one of the world's top cryptocurrency exchanges, providing a convenient, easy-to-use platform that's constantly adapting to all the industry advances and innovations. The platform is well-designed and integrated, which builds a solid foundation for a consistent and timely service.
Our Coinbase review will depict a very user-centric platform that has managed to eradicate complexity out of the equation. Keep on reading to learn more about using Coinbase to send/receive and store cryptocurrency or buy services or goods.
About The Company
Coinbase was launched in June 2012 in San Francisco, California, as a part of Ycombinator, which makes it one of the oldest exchanges out there. Its services are currently available in 32 countries, but it’s very likely that number will soon go to 31 since Vogogo, their payment service in Canada, is about to shut down.
Coinbase started out as a simple broker, selling BTC directly to customers. In May 2016, however, they started operating their own crypto exchange – GDAX, where they allowed aficionados to trade cryptocurrencies with one another.
The company currently has around 8.7 million users, with 28.7 million wallets and 46k merchants. It had more than 20 billion dollars in exchanged cryptocurrencies, which makes it one of the biggest crypto exchanges as well.
How Coinbase Works
Coinbase is a safe online platform for buying/selling, storing, and transferring digital currency. The main company mission is creating an open and global financial system that’ll help people exchange cryptocurrencies into and out of their local money. As such, it offers the following benefits:
- Easier process of buying/selling cryptocurrencies;
- Free sending/receiving of cryptocurrencies between friends, online wallets, and merchants;
- The company handles all the security-related issues and backups;
- Merchant tools, a wallet, and an exchange in one simple UI;
- Many apps are being built using the Coinbase API.
You can use Coinbase on any computer or Android and iOS smartphone and make transactions as soon as the verification process is completed. To make cryptocurrency transfers, Coinbase has to be connected to your bank account.
Then, all you have to do is choose your payment methods and currency and you can start buying and selling Bitcoin and other cryptocurrencies. Coinbase currently accepts the following payment methods:
- USA – US customers can use bank transfers, credit/debit cards, and bank wires. They can also withdraw USD directly from their Coinbase USD wallet to the linked bank account or sell to their PayPal account.
- Europe – You can transfer EUR from and to your Coinbase account via your European bank account as long as you live in one of the supported countries. Residents of European countries can also utilize their credit/debit cards with a 3D Secure enabled card.
- The UK – The only way of transferring funds is through SEPA or purchasing via debit card or 3D Secure enabled credit card. Coinbase is working on bringing back GBP wires, but they’re still not operational.
Note that the BTC/GBP shortage is present in the margin trading on GDAX as well.
Coinbase also offers high levels of security. Your Coinbase account and all your wallets are protected by 2-step verification. In order to keep your data safe, Coinbase adds a new layer of protection to your account by sending a security code to your mobile phone when you want to log in.
Finally, you don’t have to spend hours monitoring your Coinbase account and exchange rates. Instead, you can enable recurring buys and sells. You can select the amount of Bitcoin you want to buy or sell on a daily, weekly or monthly basis and let Coinbase do the rest.
Buying & Selling Limits
The buy/sell limits are specific to every account and you can see them on your verification page. There you will see a weekly buying/selling limit, as well as credit/debit cards limits.
The limits imposed on your account depend on the following factors:
- The age of your Coinbase account;
- Your activity and buying history;
- The level of account verification (including identity, bank account, credit/debit card and so on).
In general, Coinbase will not charge any fees for hosted digital currency wallet service. Transfers to an off-platform address, however, might incur network transaction fees (BTC miner’s fees, for example), which might be passed through to you by Coinbase.
Exchange rates for buying and selling cryptocurencies are calculated at the GDAX platform’s market rate at the moment of the exchange, with a spread consisting of up to 50 basis points.
Conversion fees depend on your payment method, location, and other circumstances and are calculated as the greater of:
- Minimum fee – This is a flat fee applied to conversion transactions lower than 200$, which is explicitly disclosed before the execution;
- Percentage fee – This fee varies by your payment type and current region.
Percentage fees are calculated as follows:
- Australia – Credit/debit card buys – 3.99%
- Canada – Credit/debit card buys – 3.99%
- Europe – Standard buy/sell – 1.49%; credit/debit card buys – 3.99%; bank transfers (SEPA) – in, free/out 0.15 EUR
- Singapore – Buy/sell – 1.49%; credit/debit card buys – 3.99%
- UK – Standard buy/sell – 1.49%; credit/debit card buys – 3.99%; bank transfers (SEPA) – in, free/out 0.15 EUR
- USA (4% base rate for all transactions) – U.S. bank account purchase/sale – 1.40%, with a 0.15$ minimum/1.40%, with a 0.15$ minimum; Coinbase USD wallet purchase/sale – 1.49%/1.49%; credit/debit card purchase – 3.99%; PayPal sale – 3.99%; USD deposit method – free; ACH transfer – free; wire transfer – 10$ (25$ outgoing).
Merchant tools come with the following fees:
- If you, as a business, accept BTC payment and decide to keep the funds in BTC, there will be no transaction fee for the payment;
- If you decide to exchange BTC into your local currency, however, you will be charged a 1% fee (the fee can be lower, depending on the volume);
Unlikely many other digital currency platforms, Coinbase doesn’t charge deposit and withdrawal fees, but it’s possible that your bank can include some additional fees in the process.
Safety & Security
Coinbase goes to great lengths in order to keep your sensitive information as secure as possible. Routing and account numbers are stored utilizing bank level AES-256 encryption on all of the servers. Background checks are performed on all Coinbase employees and their access is heavily restricted. In addition to that, all traffic is conducted through SSL in order to prevent third parties from potentially eavesdropping on your connection.
The bank credentials required for the verification process are never sent to Coinbase but are shared with Plaid Technologies Inc, an integrated, trusted third party. You can also choose not to share your credentials with Coinbase and opt for the option “Other Bank” when adding a bank account.
Coinbase keeps about 98% of its users’ data offline. Transaction and account details are encrypted, copied to FIPS-140 USB drives, printed, and distributed to deposit boxes all around the globe.
Furthermore, Coinbase is insured with Lloyd’s of London. Insurance covers all losses that are a result of any violation of Coinbase’s cyber or physical security. However, if you suffer any monetary loss or experience problems due to a security breach involving your personal account, insurance won’t cover it. Hence, make sure you always use strong passwords and consider making a multisig vault with Coinbase.
Multisig vault provides additional 3-key security for your Coinbase account and wallets. It protects your money and transactions with the Coinbase key, shared key, and user key. This doesn’t give Coinbase any access to your crypto money; on the contrary, with a multisig vault, you can transfer cryptocurrency through an open-source recovery tool without using Coinbase.
We also have to mention the controversy around the account monitoring conducted by Coinbase. This has caused an outrage among the crypto community and still remains a huge red flag for new customers.
In order to comply with KYC/AML laws in its jurisdictions, Coinbase is periodically required to identify the users of its platform. Identity verification can be done through the Coinbase website or smartphone app. American citizens can use their IDs or driver’s licenses, but they can’t use passports. Coinbase recommends using the Chrome browser to complete your identity verification process.
Coinbase will occasionally also have to verify the physical address of its high-volume customers. They will send you a verification postcard to the verified address under the Personal Details page. Once you receive the postcard, you should enter the code in the address verification page and the functionality of your account will be restored. Delivery usually takes around 3-5 work days, depending on your exact location. Note that the verification code expires 14 days after the projected delivery date.
Coinbase also verifies your payment methods, so you can expect an email every time you add a new one.
Coinbase offers various types of customer support. Before you decide to contact the support staff directly, you can check out the rich knowledge base. There, you can find answers to some of your questions. If you prefer getting professional assistance, you can submit a ticket, email Coinbase or ask the support bot Ada for help via live chat.
- User-friendly platform
- No deposit/withdrawal fees
- 3-key multisig vault
- 98% of transaction data stored offline
- Covers 32 countries around the globe
- 24/7 customer service
- Accounts are monitored
- You don’t control all multisig vault keys