The Coinbase Review: A Comprehensive Guide

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 cryptocurrency with all the top cryptocurrencies, as well other 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 and supported currencies.

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 Coinbase began operations legally in 2012 and has since expanded to more than 100 other countries. Customers now trade an average of $327 million per quarter. It is supported by 9,000 financial institutions.

Fred Ehrsam, Armstrong and Coinbase were the founders. Name CoinbaseThe term “originalized” coinbaseThe Bitcoin blockchain. Coinbase was initially only able to support trading Bitcoin. Coinbase began supporting trading in Bitcoin on the 21st July 2016. Since then, it has added Ethereum to their list of supported tokens. It currently supports Ethereum Cash, XRP and Litecoin. Coinbase is constantly adding new coins to its platform. 

Coinbase Pro, formerly GDAX, is an advanced trading platform that allows investors to invest and trade with lower fees. Coinbase Pro is available for free and has lower fees. It also offers more features. 

Coinbase has been fully licensed and regulated by the U.S. except Hawaii. To legalize further operations in the U.S., Coinbase obtained BitLicense on March 2017. It is now fully licensed and regulated in New York.

Today, Coinbase’s capital is more than $1 billion. Union Square Venture, Ribbit Capital and the New York Stock Exchange were some of the firms that made early investments in Coinbase. Draper Fisher Jurvetson is another example. 

Coinbase is widely recognized as being one of most accessible platforms. It allows users to buy crypto with fiat currencies. The interface of Coinbase is simple to use and makes it an ideal choice for newbies. The dashboard shows you all the key information you need at a glance – your portfolio holdings, price charts, and recent activity. You can also access trading tools and settings, as well as 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 is a trading platform that offers advanced features, custodial account for institutions and corporations, a wallet to retail investors and crypto investing.

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).

Every business request is processed within four to five working days. Debit cards are the best option for small transactions and investment. Instant processing is guaranteed. However, you are unable to trade or deposit but only crypto.

For transactions with larger amounts, wire transfers are an option. 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 users have the option to use 3D Secure card for token purchases.

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. It earns money through fees that it charges for brokerage services and its exchange. It acts as a custodian for user funds like a bank and determines what crypto assets are to be listed on the NASDAQ or NYSE.

The Coinbase Fee may vary depending on the payment method used, your location and many other factors. You may pay a flat fee, or percentage of the transaction. 

Coinbase charges high transaction fees compared with other exchanges.  Coinbase offers three different layers (Prime Pro, Exchange, and Exchange) and each one has their own trade-offs as well as a fee structure.

Coinbase Exchange charges the highest fees, even though it’s the most widespread layer. However, it offers superior customer service and user-friendly experiences.

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). Coinbase charges high fees for investors who use it to stake and store their assets.

Debit card purchases typically have the highest fees. However, a Coinbase USD wallet and a U.S. account will bring you lower fees.

Coinbase charges a premium of 0.5% per token cryptographically traded. 

Coinbase Pro’s taker fees are lower than Coinbase Exchange and range from 0.5% to 0.04%. 

Coinbase Pro interface, particularly for crypto novices, is much less dynamic and interactive than Coinbase Exchange.

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. 

There are withdrawal fees

Every crypto exchange needs to have withdrawals, Coinbase included.

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

The cost of a transaction can vary depending on its time factor. It could be as little as one cent or as much as several hundred dollars. The cost of adding your transaction to the next block is typically higher. Although waiting for some time is more affordable, it can take longer. 

Fees for bank withdrawals are set and fixed. The transaction is not affected by the time preference. The withdrawal fees are determined solely by the financial institution, so it doesn’t matter if you want to withdraw immediately or later.

Transaktion Fees

Coinbase, like we mentioned earlier is very expensive for average users. Although the UI/UX of Coinbase is unparalleled, it is very expensive.

Coinbase users pay an average transaction fee of 0.50%, with additional fees depending on the payment method used. This means that you could be charged up to 4% for each transaction. You might pay up to 9 percent if you sell and buy cryptocurrency the same day with your 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. The threshold for debit card purchases on Coinbase is as high at 5%. 

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

Coinbase, however, is more expensive 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, Coinbase and Binance charge higher fees. You can save up to 25% on Binance by using BNBs

Services

Brokerage

Coinbase’s Prime brokerage platform was launched exclusively for institutional traders of cryptocurrencies. 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 was established in 2015 for cryptocurrency traders. In May 2018, Coinbase Pro was introduced. Coinbase offers exchange services for both novice and experienced crypto traders. The basic Coinbase user interface allows you to purchase and sell Bitcoins using your bank accounts.

Coinbase Pro features a more complicated and sophisticated trading platform that is priced lower than the average. You can also place stop-and limit orders, in addition to basic market orders.

Staking Services

Coinbase, unlike other exchanges allows verified users to stake XTZ or Tezos. Users who have more Tezos than one can get crypto rewards when they use delegation.

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 reward payments 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 can be used as a buffer by investment funds or institutions when it comes to Bitcoin. OTC can be used to prevent any market-related impact on purchases. Due to high demand, coin prices can fluctuate due to scarcity. 

Coinbase opened OTC trading to institutions in late 2018. The Coinbase  OTC desk offers coins for sale directly from cold storage. This allows institutional investors to enjoy greater privacy. This way, it’s possible to buy vast amounts of coins without a proportional reaction in the crypto market. 

OTC trading can only be done by Coinbase Prime at the moment. This is a unique feature that institutional accounts have. 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 allows you to also earn fiat currency through the affiliate program. The funds can be withdrawn or used to purchase cryptocurrency. 

Shopping Cards

In a  2019 Coinbase-Visa collaboration, Coinbase introduced its unique Visa debit card. Users would be able to pay on the platform with the crypto balances they have. This card allows cash withdrawals as well as payments.

Visa is a large provider of financial services and provides Coinbase cardholders worldwide access. You can use the Coinbase Card wherever Visa is accepted. The Coinbase Visa card can be used anywhere Visa is accepted. Instead of having to wait for the transaction process to complete, users can use their balances in crypto more efficiently.

Customers who use the card earn up to 4 percent in rewards points for their purchases. Coinbase allows users to borrow as much as $100,000 by using Bitcoin as collateral. You can use bitcoin as collateral to borrow upto 40% and get cash via PayPal or your bank account. You can repay the balance at a time that suits you.

Coinbase lets its customers choose which coins they wish to sync to the card. It also makes it easy to stop unwanted 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.

Coinbase cards are similar to ATM cards in that they can often expose accounts to hacking threats and risks. 

Others 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 invested in more than 150 companies, which includes multiple cryptocurrency startups. This includes Etherscan and Messari. Coinbase Ventures does not finance any Bitcoin-development company.

Coinbase offers other services, such as Custody and Commerce. These services can be accessed by institutions, and provide access to cold storage and insurance.

Custody is a financial control and storage solution for institutional investors that trade crypto assets. By market capitalization, it supports 90% of all crypto assets. 

Merchants and retailers can use Commerce to synchronize crypto payments and incorporate them into their business logistics. With different POS stations, customers can pay in Ethereum and Bitcoin.

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

Other Tools and Projects

Coinbase offers APIs, products and infrastructure services that make it easy for developers to access Coinbase customers and integrate cryptocurrency.

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 helps businesses to perform staking and mining as well as write smart contracts.

Coinbase Wallet was launched April 2017, and is used by over a million people in the Google Play Store. It is an app for mobile that lets users store and trade more than 500+ digital coins 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 can be used to detect fraudulent activity and to link cryptocurrency transactions with real-world entities. It allows companies to monitor and track risk in large scale transactions.

Coinbase, which also made an announcement in October 2021 about its plans to create an NFT marketplace that will compete with OpenSea.

Coinbase and Funds Safety

The history of cryptocurrency exchanges has been plagued by hacks and scams.  Mt. Mt. At the highest Bitcoin price in April 2021, which was $65K, these coins could be valued at $55B.

Coinbase, unlike any other cryptocurrency exchanges, has not been hacked. Only 2% are actually held on Coinbase, with the majority of digital assets stored offline in cold storage vaults. Lloyd also covers the rest. FDIC insurance covers USD wallets stored on Coinbase up to $250,000.

Coinbase wallets employ biometric fingerprints, AES256 encryption and private keys with AES-256 encryption. Coinbase puts your money in one of three places. It pools it with U.S. banks and U.S. money-market funds, as well as short-term 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). 

Why Coinbase for Everyone

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. All these factors make Coinbase a great choice for both novice and experienced 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.