Beginner’s Guide: Coinbase Complete Review
Coinbase is one of the most popular exchanges currently available. Launched in San Francisco in 2012, Coinbase operates in 33 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 and the largest exchange of cryptocurrency in the world. Unlike other exchanges that require users to trade on the market, Coinbase allows users to trade their cryptocurrency at a set price based on their market value, which allows users to purchase their cryptocurrencies faster than other exchanges. Coinbase is also one of the few cryptocurrency exchanges that accept credit cards (in addition to bank transfers).
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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.
Currently, Coinbase allows you to buy Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethererum Classic, 0x Protocol, Basic Attention Token (not available to UK customers), USDC (the US only), and Zcash and has plans to add more currencies to the platform. For further information on supported coins, click here.
Coinbase also operates GDAX, which became Coinbase Pro, intended to focus on professional traders, and Coinbase Prime, intended to focus on US institutional investors.
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 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 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 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 you have purchased will be credited to the relevant Coinbase wallet.
Recently Coinbase has also launched crypto-to-crypto trading services.
Is Coinbase Safe?
One of the perceptions of cryptocurrency among newcomers to any trading platform is that it is risky to invest in. It is understandable because there have been issues around cryptocurrency exchanges in the past.
Coinbase is considered to be among the most secure platforms currently available. First of all, Coinbase is US based and is therefore required to comply with US State and Federal laws. This can be contrasted with some of its competitors that operate in countries with lighter regulations when it comes to such platforms. Coinbase has actively pursued discussions with regulators to provide an open and innovative financial system. The regulation of Coinbase is considered by some to have restored confidence in cryptocurrencies. Besides, Coinbase has received investment from many 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. They also state that the remaining portion of any cryptocurrency stored online is insured. In the event of a hack, customers will be entitled to receive any funds lost through the insurance policy.
Coinbase offers customers‘ a 2-factor authentication method, which can be through SMS to their phone, or through third-party apps such as Google Authenticator, or both. Also, Coinbase notifies users if a new device or IP address attempts to access your customer account. However, 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 for which you control the private keys.
Coinbase Customer Support
Coinbase offers customer support through email, as providing the customers with a Knowledge Base and FAQ page. Customer support response times may vary, deepening on volumes, but typically within 48-72 h.
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, Romania, Sweden, Switzerland, United Kingdom and the United States, over 40 countries and expanding.
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 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. 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 Shift Card
The Shift Card is a VISA debit card that is available to Coinbase users. Shift Cards allow Coinbase users in certain US States and Territories to spend the Bitcoin in their account in any place where VISA is accepted. Shift Cards cost an initial $10, but there are no transaction fees on domestic transactions or any fees associated with Bitcoin’s exchange to USD.
Coinbase vs. Coinbase Pro ( formerly GDAX )
In 2015, Coinbase rebranded the company’s exchange element 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 using Coinbase Pro for purchasing.
All Coinbase customers automatically have an account on Coinbase Pro. You log in with the same credentials as you would on the Coinbase website.
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 order books, trade histories, and charting tools. Simultaneously, the interface on Coinbase Pro is highly intuitive, making it possible for traders to start using the platform right away.
Monitoring of Accounts
One of the online community criticisms about Coinbase is that it 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 Custody is a service that provides secure storage for crypto-assets for eligible financial institutions and hedge funds across the world. The service has officially accepted its first deposit during its first day of launch, and it is now live for investors in the US and Europe.
Coinbase and Paradex
Coinbase announced the acquisition of Paradex, which is a decentralized exchange for Ethereum ERC-20 tokens. They hope 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 that will be listed as this should greatly increase the exposure of these assets to a wider range of people.
Instant UK Bank Purchases
Coinbase has recently rolled instant UK bank account purchases, which means you can now 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 converting 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.
Another new addition to the Coinbase platform is its “Coinbase Bundle.” The bundle is an easy way to buy all 5 cryptocurrencies they currently offer ( BTC, ETH, LTC, BCH, ETC).
Inside your account, you will see the option to purchase the Coinbase bundle. You enter an amount you wish to purchase, and it will automatically be split between the coins. The bundle is weighted by the total market value of each asset. Therefore percentages may vary.
Coinbase offers customers (and especially newcomers to cryptocurrency) a practical and easy-to-use service to buy and sell 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.
- Excellent Reputation
- FDIC Insured
- Easy to Use
- Very Secure
- Accepts Credit / Debit Cards & PayPal
- Slow Customer Support
- Limited Currencies Available