The Ultimate Coinbase Review – CoinStats Blog

Coinbase is the most popular fully regulated and licensed centralized cryptocurrency exchange platform in the U.S. It’s also one of the largest and most well-known digital currency exchanges in the world.

Coinbase gives investors the ability to trade the most popular cryptocurrencies, as well other cryptocurrency coins. It’s famous for its easy-to-use interface, educational tools, and robust security measures but also has restrictions based on your location.

To allow cryptocurrency investors to trade fiat currencies with coins and get staking reward, Coinbase offers an iOS or Android app and 24/7 customer service.

Coinbase’s CEO Brian Armstrong said that the company’s core mission is “to increase economic freedom in the world.” Coinbase will execute a strategy that promotes crypto assets as an investment vehicle, a new financial system, and an app platform to achieve that mission.

Continue reading to find out all you need about Coinbase, its trading platform, Coinbase fees and insurance policies, as well as information on trading pairs, supported currencies and regulatory information.

Let’s dive in!

Coinbase: Overview

Coinbase, one of the most popular cryptocurrency exchanges worldwide, is also the top-ranked exchange platform in America. Coinbase Global, Inc., is licensed by the U.S. Security and Exchange Commission and is registered in Delaware to serve as the holding company for Coinbase and its subsidiaries. It is now a remote-first business with no central office.

In April 2021, Coinbase became the first cryptocurrency company to become public. Coinbase was listed on Nasdaq under the ticker (NASDAQ COIN) and went public.

Coinbase began legal operations in 2012 It began legal operations in 2012. Customers trade around $327 billion each quarter. It is supported by 9,000 financial institutions.

Fred Ehrsam and Armstrong founded Coinbase. Name CoinbaseThe term “originalized” coinbaseThe Bitcoin blockchain. Coinbase was initially only able to support trading Bitcoin. Coinbase supported only Bitcoin trading until July 21, 2016. Coinbase then added Ethereum to the list of supported tokens. Since that time, Coinbase has grown significantly and now supports a wide range of cryptocurrencies. It supports Ethereum, Bitcoin Cash and XRP today. More coins are added regularly to Coinbase. 

For investors looking to trade actively or invest in cryptocurrency, Coinbase Pro is available. Coinbase Pro offers lower fees and more features, while being free for all Coinbase accounts. 

Coinbase, with the exception of Hawaii is fully licensed in the U.S. and regulated. It obtained BitLicense in March 2017 to further legalize operations in the U.S. and allow it to operate fully in New York.

Today, Coinbase’s capital is more than $1 billion. Union Square Venture and Ribbit Capital were among the early investors in Coinbase. Draper Fisher Jurvetson was also a part of this investment. 

Coinbase is widely recognized as being one of most accessible platforms. It allows users to buy crypto with fiat currencies. Its simple and intuitive interface is another reason it’s a great choice for beginners. The dashboard shows you all the key information you need at a glance – your portfolio holdings, price charts, and recent activity. The dashboard also provides easy access to tools and trading options, along with account settings.

 In May 2021, the company’s mobile app again reached the top spot on Apple App Store after slipping from that position in 2017.

Coinbase provides an advanced trading platform and custodial accounts to corporations and institutions. It also offers a wallet that retail investors can use, as well as crypto investing and its U.S. Dollar stable-coin.

These are the features

Payment Methods

Coinbase lets its customers make payment via wire transfer, debit card or bank account. You can select your bank account as a payment method for trading coins – this will initiate an ACH transfer for the value of your purchase.

Users can deposit and withdraw money using the bank account option (ACH).

Business requests will be processed in 4 to 5 business days. With instant processing, small transactions or investments work best with debit cards. However, you are unable to trade or deposit but only crypto.

For transactions with larger amounts, wire transfers are recommended. These are faster than bank transfers, but they are not available for trading. 

U.K. customers have more options when it comes to payment methods. Users can withdraw money to their Coinbase Visa card or PayPal. They also have the option of making fiat bank transfer with SEPA and faster payments. U.K. users can also purchase with a credit or debit card if the card supports “3D Secure.” With this payment method, they will not have to pre-fund their account but can make instant purchases without waiting for a bank transfer to complete.

Only three payment options are available for Coinbase customers in mainland Europe. SEPA is a fast way to withdraw or deposit money. You can complete them in three business days.

European Coinbase customers can use 3D Secure Cards to purchase tokens.

They can also use Sofort or Ideal to deposit Coinbase funds. They have very limited functionality. Coinbase is only accessible to 41 countries in Europe. 

There are many features that can be availed in different countries. Europe users are encouraged to consult the Coinbase listing for any major service changes applicable to their area. There are also different policies for different countries, which can be viewed on Coinbase’s official website. 

Coinbase Fees

Charge Structure 

While Coinbase is the most well-funded blockchain company in the United States, it’s still a centralized company, not a decentralized ledger. The brokerage and exchange fees it charges make the company money. It acts as a custodian for user funds like a bank and determines what crypto assets are to be listed on the NASDAQ, NYSE, or NASDAQ.

The Coinbase Fee may also be subject to change depending on where you live, what payment method you use, and other variables. You may pay a flat fee, or percentage of the transaction. 

Coinbase charges high transaction fees compared with other exchanges.  Coinbase has three layers: Prime, Pro and Exchange. Each layer is unique in its trade-offs and fees.

Coinbase Exchange charges the highest fees, even though it’s the most widespread layer. It also provides advanced customer support, and an easy-to-use experience.

Compared to other exchanges like Kraken and Binance, Coinbase’s fees range between 1.49% and 3.99% (less than 0.26% and 0.5%, respectively). You will be charged high fees if you use Coinbase to stake and custodian your investments.

Debit card purchases generally have the highest fees. A Coinbase USD wallet, or an American bank account with a U.S. address will bring you lower fees.

Coinbase also charges 0.5% premium fees for any cryptocurrency tokens traded on their platform. 

Coinbase Pro takes fees a little lower than Coinbase Exchange. They range between 0.5% to 0.04%. 

Coinbase Pro’s interface is less vibrant and interactive than Coinbase Exchange’s, which can be frustrating for novice crypto investors.

Coinbase Prime, which is the third plan, charges similar fees as Coinbase Pro. There is however a significant difference between the two plans. The former includes verified institutions and corporations. 

Charges for Withdrawal

Any crypto exchange including Coinbase needs withdrawals.

You should take into account several factors when you withdraw funds from Coinbase.

Costs can be anywhere from one penny to several dollars, depending on how long it takes. The cost of adding your transaction to the next block is typically higher. It is usually cheaper to wait for the transaction to be added, but it takes longer. 

Fees for bank withdrawals are set and fixed. The transaction is not affected by the time preference. This means that withdrawal fees will be determined by financial institutions, regardless of whether they are for immediate withdrawals or withdrawals at a later time.

Transaction fees

Coinbase can be quite costly for the average user, as we have already stated. While the UI/UX is excellent, the price is high.

Coinbase charges a flat fee average of 0.50% per transaction. Additional fees are based on payment methods. You might also pay up to 4.4% per transaction. This can add up to 9% to the price of a cryptocurrency you buy and then sell using the same credit card.

 Coinbase Pro uses tiers, with more or higher dollar transactions coming with lower costs.

When you make a cryptocurrency transaction on Coinbase, you’ll be charged both a spread fee and a Coinbase fee. Spread fees are the difference between market prices and what you pay to buy or sell cryptocurrency. It is similar to the trading commissions or fees you may pay when investing with a brokerage account. Coinbase’s spread is equal to about 0.50% of your crypto sales and purchases. 

Coinbase’s transaction fees are much higher than those charged by crypto exchanges, such as Coinmama. Coinmama is an example of a cryptocurrency exchange where you can buy bitcoin without having to pay any transaction fees. Coinbase has a threshold of 5% for buying debit cards. 

There are some good things about buying with other methods than credit or debit cards.

Coinbase’s price is higher than Kraken. To buy BTC for less than $50,000,  Kraken charges 0.26%. Kraken charges 0.26% for every token you buy. This is a lower taker fee than you would pay for other tokens. You can use this option to trade crypto, since there are several fiat-crypto pairs.

Kraken and Coinbase have much lower fees than Binance. Use Binance to get up to a 25% discount if you have BNBs

Services

Brokerage

Coinbase launched the Prime brokerage platform exclusively for institutions that trade cryptocurrency. The platform is meant to handle orders significantly larger than the ones handled on Coinbase’s retail trading platform. Prime offers brokerage services by combining “advanced trading, battle-tested custody, and financing in a single solution,” said Greg TusarCoinbase’s vice-president of institutional products, Jeremy.

Exchange

Coinbase has been online since 2012 GDAX, an exchange platform for cryptocurrency traders was established in 2015 and rebranded as Coinbase Pro in May 2018. Coinbase offers exchange services for both novice and experienced crypto traders. You can use your bank account to buy or sell Bitcoin with the basic Coinbase interface.

Coinbase Pro has a lower overall fee and features that are more advanced and useful for active traders. Additionally, you can place limit and stop orders.

Staking Services

Coinbase lets verified users stake Tezos (XTZ) unlike any other exchange. When users have more than 1 Tezos they are eligible to earn crypto rewards.

Their rewards are equal to the amount they stake in XTZ. The initial payment of rewards can take approximately a month. You will lose your rewards if your XTZ is withdrawn from Coinbase. You do not need to hold more than 1 XTZ to keep receiving rewards. 

Tezos currently allows only one way to stake. Once the protocol is changed to Proof-of Stake, however, this could lead to Ethereum becoming the most popular altcoin and second most valued crypto asset.

Coinbase doesn’t support staking on Bitcoin because its security protocol uses Proof-of-Work.

OTC Trading 

OTC trading, which is another type of centralized exchange, can also be used. OTC (Over-The-Counter trading) is traditionally done between two people and not on an exchange. Coinbase acts as what’s known as an “agency’ and earns commission by executing client trades.

OTC acts as an investment fund and institution buffer when it comes Bitcoin. OTC can be used to prevent any market-related impact on purchases. High demand results in coin prices changing due to scarcity. 

Coinbase allowed institutions to trade OTC late in 2018. The Coinbase  OTC desk offers coins for sale directly from cold storage. Institutional investors are therefore afforded greater confidentiality. This way, it’s possible to buy vast amounts of coins without a proportional reaction in the crypto market. 

OTC trading is currently only available to Coinbase Prime institutional accounts. Companies must undergo rigorous KYC procedures to gain access to this feature. 

The core difference between Coinbase OTC and traditional finance OTC is that Coinbase doesn’t allow the sale of unlisted securities to avoid overt movements in market prices.

Get Cryptocurrency for Free

Coinbase introduced its Earn Program in December 2018 to allow users to earn crypto through completing educational tasks.

Coinbase users can earn between $6-$50 per day in mid-2020. The earning limit for each account currently is $158. 

Tezos, Basic Attention Token, BAT, Dai, EOS and Orchid are some of the coins supported by Coinbase’s Earn program.

Coinbase Earn is not the only program available. Users can also join an affiliate program to make fiat money. Users can then choose to withdraw funds or buy crypto using the winnings. 

Card Spending

In a  2019 Coinbase-Visa collaboration, Coinbase introduced its unique Visa debit card. The platform will allow you to use the balance of your crypto holdings to make payment. This card allows cash withdrawals as well as payments.

Visa, a leading provider of financial services worldwide, provides Coinbase cardholders with global access. Visa can accept the Coinbase Card anywhere Visa is accepted. Additionally, Coinbase Visa cards are an alternative to making fiat withdrawals. Instead of having to wait for the transaction process to complete, users can use their balances in crypto more efficiently.

The card allows you to earn as much as 4% in cryptocurrency rewards when you shop with it. Coinbase lets you borrow as high as $100,000 with bitcoin collateral. You can use bitcoin as collateral to borrow upto 40% and get cash via PayPal or your bank account. Customers can pay off the balance on their own schedule.

Coinbase allows users to select specific coins that they want to sync with their card. This helps to prevent unneeded spending. You can withdraw your earnings and keep your ETH cryptocurrency holdings.

This strategy can help to prevent trade losses from market fluctuations. It is actually a conversion of crypto-fiat and subsequent transfer into your bank accounts.

However, just like an ATM card, Coinbase cards can be used frequently to expose your account and make it vulnerable to hackers. 

Additional Services

Coinbase also offers additional services for investors to increase investment. Coinbase, for example, launched its Ventures program in April 2018, to fund crypto-related businesses. CV had invested in 150 businesses as of August 2021. This includes several crypto-startups. These companies are Etherscan, Messari BlockFi and Compound. Coinbase Ventures doesn’t fund Bitcoin companies.

Coinbase offers other services, such as Custody and Commerce. Institutions can access both services and have access to insurance as well as cold storage.

Custody offers financial storage and controls for institutional investors who trade cryptocurrency assets. The platform supports 95% of the crypto assets based on market capitalization. 

Commerce allows merchants and retailers to integrate cryptocurrency payments into business logistics. Different POS stations allow customers to make payment in Ethereum, Bitcoin Cash and Litecoin.

Coinbase allows seamless integration of Woo Commerce and Magento with Opencart, Shopify, Shopify, Shopify and PrestaShop. 

Other Tools and Projects

Coinbase created APIs and products, infrastructure systems and secure services to help developers connect with Coinbase customers. This allows them to integrate crypto currencies, create cryptocurrency businesses and much more.

In addition to Connect API and Commerce API, Coinbase Pro’s trading API is another helpful tool. It can be used by developers to assist professional traders in placing orders or accessing market data.

In January 2021, Coinbase acquired Bison Trails, a startup, which makes it easier for developers to connect to blockchain networks,  build apps, run node clusters, and more. Bison Trails can also help companies with staking, mining and the writing of smart contracts.

Coinbase Wallet was launched April 2017, and is used by over a million people in the Google Play Store. This wallet allows you to store, trade, and buy 500+ cryptocurrency coins, digital collectibles and NFTs. It can be used to borrow cryptocurrency assets, and it also earns interest. Coinbase Wallet aims at giving users greater access to dApps created on top Ethereum and Bitcoin.

Circle and Coinbase also run the Centre Consortium, a stable coin joint project. They launched USD Coin,  an Ethereum-based stablecoin, worth $27B. It’s used for programming payments, accessing DApps, and fast trading across multiple exchanges. 

Coinbase Analytics allows you to identify fraudulent transactions and connect crypto transactions to real world entities. This product allows organizations to track money and assess risk across multiple transactions.

Coinbase announced that in October 2021, it would launch an NFT market to rival OpenSea.

Coinbase and Funds Safety

There are many exit scams and hacks that have been committed against cryptocurrency exchanges over the years.  Mt. Gox lost 850,000 bitcoins in 2014 to hackers. It was worth $450 million at that time. These coins are worth $55B, at the April 2021 peak Bitcoin price $65K.

Coinbase, unlike any other cryptocurrency exchanges, has not been hacked. The platform holds less than 2% of the user funds, but most digital assets are kept offline in cold storage vaults and are insured by Lloyd. FDIC insurance covers USD wallets stored on Coinbase up to $250,000.

Coinbase wallets are protected by biometric fingerprints as well as AES256 encryption for private keys. Coinbase also pools your cash and places it in three locations: Custodial accounts in U.S. Banks, U.S. Money Market Funds, or U.S. Treasuries.

However, users should note that Coinbase is not liable for breaches incurred due to users’ negligence. Coinbase suggests that customers enable 2FA and two-factor authentication to protect themselves from attacks.

Coinbase’s U2F (Universal 2nd Factor) login works with mobile authenticator apps (e.g Google Authenticator or Duo), security keys, or TOTPs (Time-based one-time password). 

Anyone Should Use Coinbase

Coinbase is one of the world’s largest crypto exchanges. You can sign up quickly and easily, access educational tools, trade fiat and crypto, as well as foolproof security features. Coinbase is an ideal choice for advanced and novice traders.

However, these fees are the most expensive.

Coinbase’s inability to provide customer support and infrastructure for the rapid growth of Coinbase users is another problem. Coinbase claims it’s taking steps to address deficiencies in these areas.

To sum up, you should use Coinbase if you want an advanced trading platform with top-notch tools and security; a user-friendly mobile app; access to a vast array of cryptocurrencies; ease of payment;  a secure wallet that supports several Dapps, coins, and NFTs, and much more.