We have tried, invested and analysed Coinbase and we will share with you our full review, opinions, pros & cons and conclusions in order to help you decide if it is a good platform to start investing in cryptocurrencies this year.
What is Coinbase?
Coinbase is the largest Bitcoin and cryptocurrencies exchange in the world. It’s available in more than 100 countries and has more than 30 million users registered.
It was founded in 2012 and it’s based in San Francisco, California, but they have offices in New York, London, Tokyo and Berlin. The team has over 1000 employees at the moment and they have been growing fast since the early days. They just moved to a new offices in San Francisco, check it out here:
Can we trust Coinbase? Is it Safe?
Coinbase is a regulated company that holds licenses in all the 100 countries where it operates.
Coinbase is leading the crypto space and has raised more than $200 million from world’s leading investors such as Andreessen Horowitz, Y Combinator, Adam Draper, the BBVA bank or the NYSE (New York Stock Exchange) among many others.
Insurance: All the cash held in Coinbase wallets are FDIC insured up to $250,000.
Right now, the team has more than 1000 employees and they have almost doubled the team in just 2 years.
Most of the employees come from engineering and finance.
Since Coinbase is based in the US, they must follow the KYC/AML laws. Know Your Customer and Anti Money Laundering laws require companies to verify the identity of their clients. These laws help preventing money laundering or other criminal activities.
Check here the Coinbase’s CEO, Brian Armstrong and a few senior employees talking about their mission:
How does Coinbase work?
As many other exchanges, Coinbase requires KYC (Know Your Customer) and you will need to upload your ID, connect your bank account and fill in all kind of personal data.
You can buy bitcoin directly from your connected bank account, debit card, SEPA transfer and a few more payment options.
WHY YOU SHOULD CHOOSE COINBASE
- Really easy way to buy bitcoin for new users
- Friendly and intuitive user interface
- Wide variety of fiat deposit and withdrawal options
- Instant easy transfers between Coinbase users
- High liquidity and buying limits thanks to its size
- Instant buy available with credit card
- Insured Bitcoin deposit
- Online and mobile wallet services
- 2FA and multi-signature security option to prevent unauthorized manipulation of funds
WHY YOU SHOULD NOT CHOOSE COINBASE
- Coinbase accounts are monitored and you don’t stay anonymous.
- KYC (Know Your Customer) required
- Slow support and sometimes inefficient
- Funds can be delayed when high volume transactions
- Not many supported cryptocurrencies
- Limited payment methods yet
- It may track how users interact and spend bitcoin
Coinbase’s simple interface aims to make it easy for first-time buyers to purchase bitcoins.
Coinbase payment methods and fees
Coinbase supports more than 100 countries. The payment methods available depend on your country.
|Payment Method||Countries||Funds Available||Currency||Fees*|
|Bank Transfer||USA||5-7 days||USD||1.49%|
|SEPA Transfer||Europe||1-3 days||EUR||1.49%|
*Depositing currencies into your Coinbase account is free. However, Coinbase will charge 1.49% fee per every purchase and sale.
For lower fees, you may want to use Coinbase Pro. It is more complex but is worth learning if you will be making a lot of trades or buys. We will make a review in the next article.
The “buy bitcoin” section of Coinbase its very easy to use for first-time buyers.
The most popular payment method in Coinbase is the Credit/Debit card option.
In this table you can find a comparison between Coinbase and other popular cryptocurrency exchanges that allow credit/debit card payment methods.
Please note that fees are approximate and may vary based on your country or purchase size.
Coinbase Purchasing Limits
Coinbase offers very high limits. These depend on your account level, which is usually determined by how much information you have been verified. Fully verified U.S. customers may buy up to $50,000 worth of bitcoin daily.
And European customers may have a maximum of €30,000 in their account at any time.
Coinbase Customer Support
Coinbase “Community” can be used to ask questions and get support help.
Coinbase Bitcoin Wallet
Your Coinbase wallet can be accessed on the website or the Coinbase app for both iOS and Android.
Coinbase controls all private keys, and acts more like a bank’s website than a true Bitcoin wallet, where you usually have your private keys control.
If you don’t want to risk all your funds or depend on the Coinbase platform, then you should not use it to leave your funds there and try to find other wallets that give you access to your private keys. This way you won’t really care about the platform or website since you will have direct access to the universal blockchain.
Coinbase Bitcoin Wallet Security
Users may create three types of wallets with Coinbase: wallet, vault, and multisig vault.
Coinbase Bitcoin Wallet
With the Coinbase wallet, the company controls your bitcoins and you must trust that they keep your coins secure.
You must also keep your Coinbase login and account password safe.
Coinbase is a VC backed company with over $200 million in funding and likely has a very strong security setup. The point of Bitcoin, however, is that users have the ability to control their own money and keys. So, move your bitcoins into a wallet you control after you buy, where you have your private keys.
Also note that Coinbase can shut down your account and block access to your funds at any time. Same as traditional banks, actually.
Coinbase offers a unique solution for securing larger amounts of bitcoin.
Bitcoin stored in a Vault account can be protected by multiple approvers. If a user adds two approvers to his vault, both must confirm that the withdrawal is valid before it processes.
All withdrawals from Vaults take 48-hours to process. The time delay provides an extra layer of security.
If you see that a withdrawal was requested that you did not make, then the withdrawal may be cancelled.
Anyway, like the regular Coinbase wallet, you must as well trust Coinbase to secure vault funds, since vault accounts can also be shutdown by the company at anytime.
Coinbase Multi-sig Vault
Since Coinbase understood that many users wanted the complete control over their funds, they launched new options available where you can own your private keys now.
Its multi-sig vault is a 2 of 3 wallet, where Coinbase has one key, one key is shared, and the third key is held by the account holder.
Any two of the three keys allows spending of funds. If Coinbase goes down, you still have both the shared key and your own key. Funds cannot be held because the shared key is encrypted with your password.
Your name, phone number, email, and a number of other personal details are required. Coinbase knows your addresses and balance at all times and can connect this with your identity and IP address. You must trust Coinbase’s nodes to verify transaction data.
Because Coinbase has buy/sell features, the must follow all KYC laws. There have been reports that they may be tracking how its users spend their cryptos.
Each payment request uses a new address, which helps prevent other users from connecting Bitcoin addresses together.
Coinbase USD Wallets
A Coinbase USD wallet will let you store dollars in your Coinbase account. There are a few advantages to using a Coinbase USD wallet:
- You can store dollars in your account so that when you do want to purchase bitcoins you don’t have to wait five days for a bank transfer to process.
- You can spend bitcoins online without exposing yourself to Bitcoin’s volatility.
Coinbase Debit Card
Coinbase released a debit card for Europe customers that connects to your Coinbase account. It uses your Coinbase balance as the debit card’s source of funds, allowing you to spend bitcoins at any merchant accepting Visa.
- The easiest way to spend crypto worldwide
- Instant transactions and payments
- Track your spend through the app
- Easily choose which crypto you spend
- World-class security to keep your crypto safe
How to Use Coinbase
Buying cryptocurrency can be a confusing process with the multitudes of exchanges and payment methods available, specially if it’s your first time buying.
Luckily, Coinbase is designed for ease of use, targeting first time buyers with their simple platform makes it very easy for anyone to buy or sell Bitcoin, Litecoin, Ethereum and more, regardless of your experience.
Coinbase offers fiat onramps, or the ability to purchase coins with traditional fiat currencies. Bitcoin, Ethereum, Litecoin, and Bitcoin Cash can all be purchased with fiat on Coinbase.
While Coinbase is beginner focused, the process of setting up an account, adding funds, and purchasing currencies can still be less than straightforward. This guide will teach you every you need to know about Coinbase.
How to create a Coinbase account
- Visit the Coinbase website and click “Sign Up”.
2. Fill in your information and complete the captcha.
3. Access your email and follow the verification link.
4. Select your country and add your phone number.
5. A 7 digit code will be sent to your phone and you will be directed to enter the code.
6. After entering the code, you will be directed to verify your ID. If you’re not asked to verify your ID yet, we recommend you to do it anyway, since to buy bitcoin or other cryptocurrencies you must verify your ID before.
7. After filling out this information, you’ll be require to submit a photo ID. You can upload a driver’s license or another photo ID. This process may take a few minutes to verify. Once your photo is verified, the verification process will be completed.
Security: 2-Factor Authentication
After you verify your ID, we strongly recommend you to increase the security of your Coinbase account by enabling the 2-Factor Authentication (2FA).
To do this, go to:
Settings > Security > Two-Factor Authentication > Enable Authenticator
Enter the 7 digit code sent to your phone. Then, Coinbase will create an authenticator code for you.
2FA is a security measure that generates unique codes based on your authenticator secret code. To use it, download a 2FA app such as Google Authenticator into your phone.
After downloading Google Authenticator, add the Coinbase code to the app. You can do it by scanning the QR or by manually entering the code. The app will now generate 2FA codes that change every few seconds.
Remember to store your secret code somewhere safe. If your phone gets lost or its stolen you will need this code to receive 2FA or you will have to do the entire process again after speaking with support, what is usually a pain and a very long and slow process.
Before buying your cryptocurrency, you need to add a payment method. Coinbase offers 3 payment methods: Bank account, Debit card or wire transfer.
To add a payment method, go to:
Settings > Linked accounts > Link a New Account
Then you will be able to select the payment method you want to add.
Bank Account (recommended)
Bank Accounts are better for larger purchases since limits are higher ($7,500 per week) and fees are lower (1.5%). However, they are not as fast as debit cards, which allow you to buy immediately.
To link a bank account, select it from the payment method selection and enter with your user ID and password.
Debit cards have more expensive fees (4%) and their limit start small ($300 per week) but they work faster than any other payment method. Any card purchase will instantly transfer cryptocurrency to your account.
To link a debit card, select that option then fill in your information.
After filling out your information, Coinbase will send 2 charges to your account. To verify your card, enter the the last 2 digits of the charge. You will not be charged for these transactions.
How to buy cryptocurrencies with Coinbase
With your account all set up, you can finally buy some cryptocurrency!
Buy/Sell > Select your cryptocurrency > Payment Method > Amount > Confirm
You may also have to enter your 2FA code to confirm the purchase.
Coinbase makes you pay the standard Bitcoin transaction fee, which is usually about $0.10.
If you’re new to the cryptocurrency world and you are looking to buy bitcoin or any other major cryptocurrency, then Coinbase will probably be the best option for you. It’s really easy to use, it’s secure and it’s supported in almost all the countries in the world. It’s backed by many of the biggest investors in the world, it has more than 30 million users and the business it’s more than validated.
We have been dealing with Coinbase since 2016 and we have never had any major issues. And when we had something, the support team always solved it. They have not the fastest customer care team in the world but they will definitely solve your problems.
If you haven’t registered yet, use this link to get $10 bonus after depositing $100.