Is Coinbase Safe?
- Coinbase in a Nutshell
- How To Use Coinbase: Buying and Selling Cryptocurrencies
Coinbase is easily one of the most popular exchanges available out there as it offers a simple-to-use interface for inexperienced users to buy and sell top cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The platform allows you to use your credit card or bank account to make payments and choose to have a USD wallet or a cryptocurrency wallet. Moreover, it’s backed up by exceptionally high-security standards to ensure that clients’ funds/crypto doesn’t fall into the wrong hands.
To help you learn all about Coinbase, we are going to dig deeper into the exchange, looking at what it offers, security, its wallets, how to buy and sell cryptocurrency, security features, and everything in between.
Coinbase in a Nutshell
Founded in 2012, Coinbase is a cryptocurrency exchange that boasts more than 10 million customers. It was started in San Francisco, California by Fred Ehrsam and Brian Armstrong, gradually growing in popularity to expand globally, accommodating 32 countries. With the assistance of venture capital from famous investors, the exchange has managed to dominate the cryptocurrency trading industry, taking the lead position in many regions.
Unlike other exchanges, Coinbase complies with laws and regulations by different regulatory and governing bodies globally. Users on the platform don’t transact anonymously; every transaction is traceable to a user’s account should one use the platform illegally. Some of the bodies the platform comply amidst in the US include:
- Registration with FinCEN
- State transmission laws
- Bank Secrecy Act
- USA Patriot Act
Ease of Use – Perfect for Beginners!
Perhaps one of the factors that have contributed to the immense popularity of Coinbase is the fact that the platform is beginner friendliness. The website exhibits a simple design, making it extremely easy for new traders and investors to purchase cryptocurrencies.
When you navigate further on the Coinbase website, you will also realize that finding information on wallets is a breeze. The platform allows you to create numerous wallets, giving you an opportunity to acquire and organize some of the top cryptocurrencies hassle-free.
Let’s be honest: finding an exchange that allows you to purchase cryptocurrencies using a credit/debit card is not easy, and even if you do –the process is a nightmare! Well, not for Coinbase. The exchange allows even new users to purchase bitcoin and other cryptos using their cards or bank accounts and receive them instantly. And there’s more; if you wish to sell your crypto instead, the process is as comfortable as purchasing.
Most exchanges out there accept a myriad of cryptocurrencies, including the top digital currencies and altcoins. Well, sadly, Coinbase doesn’t fall into that category. The platform only supports four cryptocurrencies: Bitcoin, Bitcoin Cash (added in December 2017), Ethereum, and Litecoin.
Most people see this as a good move, especially when it comes to beginners. Most new investors are not looking to scroll through the thousands of altcoins around, but only to put their money on the most popular cryptocurrencies with high market capitalization. Coinbase, however, is open to additional cryptos is the future after reviewing them critically.
Fiat Currency Support
Here is where Coinbase beats most of its competitors. Apart from accepting deposits on cryptocurrencies, the platform also supports fiat currency. You can deposit your money into the platform’s wallet and use it to buy cryptocurrencies. Alternatively, you can sell your cryptocurrencies in exchange for fiat currency.
Currently, Coinbase supports GBP, SGD, CAD, EUR and USD fiat currencies.
There are many ways you can use to buy bitcoins and other cryptocurrencies on Coinbase, something that gives it an advantage over other exchanges
When it comes to purchases, you can either use:
- Credit/debit card or
- Bank Transfer
If you want to sell your cryptocurrencies you can choose either:
- Bank Transfer or
Coinbase fees range from 1.49% to 3.99%, which depends on the payment method you choose as well as your host country. Some people might argue that this is considerably low compared to other exchanges out there, while others might claim the maximum that’s charged on credit card is a rip-off.
To help you understand about Coinbase fees, let’s break down their charges:
- US-based Users – User’s in the United States are charged a $1.49% fee for purchases made using bank transfer. This transaction is, however, not instant. The trade settles anywhere from 5 to 7 days. If they use a credit card, they will occur a 3.99% fee, but the cryptocurrencies will be deposited in their accounts instantly.
- Europe-based Users – Customers based in Europe can purchase cryptocurrencies using SEPA bank transfers and get charged a 1.49% fee. However, unlike US bank transfers which take longer, those done with SEPA bank are typically settled within 1 – 3 business days. The charges applied for credited cards are still 3.99%.
- Sending Crypto User-User – If you send cryptocurrencies to another user (limit set at 0.001), you won’t get charged. Coinbase covers miner’s fees, whether you are sending the coins to another user on the same platform or any other wallet.
Coinbase has strict limits as to how much you can transact on the platform. The trade limit depends on your verification status, your location and payment method.
For instance, verified customers based in Europe can only transact up to 30,000 Euros. Those in the U.S. are likely to be slapped with these weekly limits:
- $50 maximum for purchases via credit card
- $5,000 maximum for purchases via bank accounts
- $50,000 maximum sells using any payment method
How To Use Coinbase: Buying and Selling Cryptocurrencies
Whether you want to purchase Bitcoin, Ethereum, Litecoin or Bitcoin cash on Coinbase, you will love the process. It’s easy and straightforward, provided you remain based in any of the 32 supported countries.
If you want to buy cryptocurrencies on the platform, all you need is to set up an account with the platform and fill in all the required details: first and last name, email, and password. You will then be required to select your account type (individual – if it’s for your personal use, or business – if you intend to purchase for corporate). Coinbase will ask you to verify your phone number, after which you can proceed to set up your payment methods.
Once your account is set up, you can then proceed to the Buy/Sell section and choose your preferred digital currency, and then the payment method (use one that you already set up). Hit Buy and your coins will credit to your account. If you use a credit card, then it will be instant. If you choose the bank account option, you might want to wait from 5-7 days (for those in the US) or 1-3 days (for those in Europe who used SEPA).
When it comes to selling your cryptocurrencies, the process is as simple as buying. It’s the vice versa. You just hit the Buy/Sell option and then select the Sell tab, filling in all the required details: amount, when to debit coins from, and payment method. For this option, your payment is limited to PayPal and bank transfer.
The nature of cryptocurrency transactions calls for utmost security. You see, although each transaction is trackable on the blockchain network, the identity of the end user (outside Coinbase) remains anonymous. Coinbase understands this issue very well and doesn’t take it lightly. It goes ahead to put into place extreme security measures to ensure that customer funds remain protected.
Coinbase enjoys the backing of trusted financial investors and venture capital by prestigious institutions and banks, which means that it cannot compromise on security. To keep users’ cryptocurrency and funds safe, it utilizes four key tactics:
- 2FA Authentication – Coinbase employs 2FA authentication to ensure that no unauthorized persons can access an account. You can choose between Google or phone number authentication, whereby you are sent a code every time you try to access your account.
- Coinbase Vault – If you wish to store a vast number of cryptocurrencies you can use a Coinbase vault. Digital currencies stored using this means stay protected over multiple layers of security – just like it happens on the blockchain network – and all have to confirm your request before you can be allowed to withdraw. The entire process could take approximately 48 hours.
- Multisig Vault – This option is also for the substantial investors who intend to keep their digital assets secure for a long time and have the control over their funds. It uses three keys: one stays encrypted with your password you are allowed to hold, another becomes shared, and the last one remains with Coinbase. If you want to initiate any transaction, your key and any of the remaining two can be used.
- USD Wallet – If you want to keep your funds in dollars and not cryptocurrencies, you can do so on Coinbase. US-based users are allowed to use a USD wallet, which is insured by FDIC for up to $250,000.
In a bid to provide users with a stable and reliable platform to trade cryptocurrency, Coinbase works closely with regulatory bodies and governments to comply with laws and regulations in the industry. It follows standard international financial practices, including KYC, AML and Anti Money Laundering. This regulation, therefore, means that all users on the platform don’t operate anonymously.
To become a member of Coinbase, you are required to fill in all your details, including name, phone number, email address, and additional items upon verification. Although the Coinbase promises to keep all this information in safe hands, it can disclose it to regulatory and governing bodies if there need be.
And there’s more. Considering that Coinbase retains your IP address and personal information, it can track your balance or transactions, confirming if or not you are not laundering money. Although this move has had a lot of criticism lately, the exchange argues that it’s crucial to keep the platform clean and away from nefarious characters.
Coinbase App Review
If you want to buy or sell cryptocurrencies on Coinbase, you don’t have to log in to your account on your laptop or PC, no! The platform has a fully functional application that is supported by Android and iOS devices. The app allows you use just about any features on the platform, from buying and selling cryptos to adding your preferred payment methods to verifying your contact details and identity.
Countries Supported by Coinbase
Unfortunately, Coinbase isn’t available worldwide. As of this writing, the exchange supports 32 countries, among them including Singapore, United States, UK, Canada, Austria, Portugal, Slovakia, Spain, Switzerland, Netherlands, and Spain. Coinbase is optimistic that it might continue to add more countries in the future to allow more people to access their services.
Coinbase Customer Support
When it comes to customer support, Coinbase has been doing pretty well in the past few years. It responded promptly to emails, with a wait time being 24 – 72 hours. The impressive customer support is, sadly, not there anymore. Although the staffs eventually respond to queries, some users believe that the time taken could be better. Some emergency situations demand longer than 72 hours to be addressed, with some people claiming to get automated replies. There have also been complaints about an increased suspension of accounts, affiliate rewards abuse, and blockchain patents.
There isn’t a single business out there without flaws, especially when it comes to customer service. The delays could be due to the high number of users that are signing up for the exchange or many tickets in the queue.
Coinbase Pros and Cons
- Extremely easy to use
- Incredibly high-security measures
- Complies with US regulators and governing bodies
- Speedy transactions – buying and selling crypto
- Good reputation thanks to its trustworthiness and reliability
- Provides a wide range of payment options
- Moderate fees
- Complaints about poor customer services
- Doesn’t uphold user anonymity
- Coinbase wallet is not as secure compared to a dedicated cryptocurrency wallet
Although Coinbase has its share of challenges, many agree that it’s a great exchange where new and experienced users can purchase cryptocurrencies. The platform has invested a lot to ensure the funds of customers are safe, giving individuals and businesses a chance to buy and sell cryptocurrencies. And when it comes to the payment methods, you have several at your disposal, including using your credit/debit card – which is a plus compared to other cryptocurrency exchanges out there.