Coinbase Overview – Pros & Cons, Security, and Fees
Coinbase is one of the biggest cryptocurrency companies around, supporting over 100 countries, with more than 30 million customers around the world.
Coinbase has a wide array of services but their main service allows users to buy and sell Bitcoins through a bank account, credit card, and debit card. The rates you’ll get on Coinbase are fair in general, however, the customer support is terrible.
Coinbase first came into existence in San Fransisco, California, the USA, in the year 2012. Coinbase still has its headquarters in San Fransisco. However, now it has offices in multiple cities all across the US. Coinbase has started out only as a Bitcoin brokerage service (selling Bitcoins directly to customers), but additional services were added along the way. Coinbase is fully regulated and licensed. The company has raised over $540m from leading investors such as Andreessen Horowitz, Rabbit Capital, and The NYSE.
The main service Coinbase offers is a brokerage service for buying and selling cryptocurrencies. On the downside, one of the main complaints users have towards Coinbase is the lack of control of users over their own funds. When you open a Coinbase account you don’t have direct access to your coins and you don’t get any private key or a seed phrase. Coinbase stores your coins for you – it’s the equivalent of putting your cash at the bank, you don’t own it, the bank does.
Coinbase Pro is a cryptocurrency trading platform. As opposed to the traditional Coinbase brokerage service, which simplifies buying cryptocurrencies at a premium, Coinbase pro is aimed at more experienced users. Coinbase pro allows users to trade several cryptocurrencies including BTC, ETH, LTC, BCH, and ZRX. Fees are considerably lower than the brokerage service and there are advanced trading options as well.
In 2018 Coinbase launched their independent mobile wallet for iOS and Android. The wallet stores the private keys on the user’s device and only they have access to the funds. This brings Coinbase full circle as it started out as a wallet, transitioned to an exchange only (claiming that they are not a wallet) and now they are offering wallet services again.
Coinbase has an incredibly convoluted fee system that is also quite expensive if you are not using Coinbase Pro. The cost of trading on Coinbase’s standard platform is quite high in comparison to its competitors.
Once your Coinbase account is set up you will be able to buy a small amount of Bitcoins until you raise your limit. In order to raise 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 photo id
If you are a fully verified US resident you can reach the highest limit which is currently $25K a day. Limits may also be set depending on the payment method you choose to buy the cryptocurrencies. For example, ACH transfer has higher limits than credit card purchases on Coinbase.
How safe is coinbase?
Coinbase uses premium security features, and all you need to do is maintain the security from your side. Coinbase offers biometric security, two-step verification, and insurance in case there is a breach at coinbase. However, this insurance is not valid if you perform any act of carelessness.
Pros and Cons
|A solid variety of altcoin choices||High fees when not using Coinbase Pro|
|Extremely simple user interface||The user does not control wallet keys|
|Very high liquidity||May not have as many altcoins as some other exchanges|
Coinbase is an ideal tool for new crypto investors who may not have any other investment experience. While the standard platform is overpriced, its features, like its learning to program and the ability to easily set up recurring purchases, provide the inexperienced with a clear path to becoming invested and actually understanding cryptocurrency.
Those with more trading experience will find that Coinbase Pro is a cheaper and more robust option, but it is still lacking in terms of features. If you wish to trade seriously, you may find that Coinbase is not the right fit for you. Overall, Coinbase is designed with the beginner in mind.