- Beginner Friendly
- Slow during period of high volatility
- Great Security
|Headquarters||San Francisco, CA, USA|
|Supported Countries||US, Canada, UK, AU, Singapore + 27 other EU|
|Main Feature||Very Secure|
|Trading Currency||BTC, ETH, LTC, BCH|
|Free Demo Account|
|Fee Info||Credit Card Deposit: 3.99%; Trading Fees: 1.49% Conversion Fees|
|Account Types||Individual and Business|
|Deposit Methods||Credit Card, Bank Transfers|
|Withdrawal Methods||Bank Transfers, PayPal|
|Trading Currency||Bitcoin, Ethereum, Litecoin, Bitcoin Cash|
|US Traders Allowed|
- Easy to create and purchase coins
- Popular and capitalized coins available
- Transactions are locked and settled faster even if the market is volatile It adheres by US laws and regulations
- Backed by corporate and banks giving it that approval stamp
- Funds-cash and cryptocurrencies are secured and insured
- Convenient payment channels available including use of credit cards and PayPal when selling
- Fees are low relative to other exchanges
- CoinBase control your private keys and coins
- They track your spending activities and can close your account without explaining
- Without verification, weekly limits are low
- Anonymity is absence because of KYC and AML regulations
- A lot of complaints about their customer care especially during period of high volatility
- Most alt coins like DASH or Monero are not available. BCH was recently added despite the hard fork happening on August 1
COINBASE REVIEW: A SECURE CRYPTOCURRENCY EXCHANGE
CoinBase was the first cryptocurrency exchange to report that they were receiving and on boarding 100,000 customers a month. Shortly afterwards, Bitstamp followed with the same metrics. Those are hard statistics giving us an idea of how record breaking Bitcoin and other alt coins prices could trigger demand.
CoinBase is a US based exchange founded by Brian Armstrong and is a beneficiary of seed funds from Y-Combinator in 2013. It is one of the largest crypto exchange in the world where more than $50B worth of cryptocurrency has changed hands, it is present in more than 32 countries and has so far served more than 10 million customers.
Figure 2: Customers served
Unlike most cryptocurrency exchanges, CoinBase is a unique and attractive platform that sells Bitcoin, Ethereum, Bitcoin Cash and Litecoin. They do this by exchanging fiat for cryptocurrency at set prices which are directly tied to prevailing market prices. Once exchange rates are locked, customers will get their coins at those set prices irrespective market volatility. In other exchanges, coins are sold and bought at volatile market rates.
Payment Method Accepted
Figure 3: Payment Methods
Besides, CoinBase customers are allowed to purchase coins through a number of payment methods. One of them includes use of Credit Cards and PayPal. CoinBase support payment in Euro, GBP or USD and once deposit is made; the amount will be reflected in their respective wallets.
The best and recommended method of funding accounts by US citizens is through bank wire transfers from verified accounts, SEPA-from European account holders and if you want to sell, PayPal is the best option.
Creating an Account
Like all other exchanges, the first thing you have to do is set up an account. It’s free.
Visit their site at www.coinbase.com and create an account. You will be required to fill in your official names-no pseudonyms, phone number, email address and state. Make sure you check the Recaptcha and agree to their terms and conditions before clicking on the “create account” button. An email will be sent to your account.
Figure 4: Sign Up
Login to your sign up email account and confirm the link sent. You will be redirected to CoinBase homepage. There you can choose to either create an individual or a business account. If you used your personal email, open an individual account is recommended.
Figure 5: Account Types
Thereafter you will be asked to verify your phone number. It is necessary because all CoinBase accounts must be 2FA secured. A confirming SMS will be sent directly to your phone.
Figure 6: 2FA Phone Number verification
Alternatively, third party apps like Google Authenticator can be used.
By activating 2FA, CoinBase will always notify you when there are login attempts from unauthorized IP addresses. If you fail to set up this 2FA and your account is breached, CoinBase will not accept any liability.
Once you verify and secure your account, you will be asked to select a convenient payment method. CoinBase avails different payment methods depending on location. For US customers, there are five options available of which linking with your verified bank account is recommended since it can handle small or big investments.
As part of their KYC and AML policy, customers using their credit cards are required to upload the card’s pictures and confirm their identity. Buying of coins is instant for credit or debit cards and takes between 1and3 days for payment to be settled if effected through a bank wire transfer.
One thing to note: CoinBase impose account limits on coin purchases and these limits vary from country to country, your account’s verification status, account transaction history and the payment method selected. Limits are calculated and placed automatically to prevent fraud in compliance with set regulations.
Figure 7: Government issued ID
Customers can apply requesting limit increment by submitting their personal documents like scanned passport or government issued IDs.
Once verified, US account holders for example are allowed to transact a maximum of $50k sells with $5K coin purchases per week while European accounts can hold a maximum of €50K at any time.
From there you can proceed and purchase your preferred cryptocurrency-Ethereum, Litecoin, Bitcoin or Bitcoin Cash. Transactions are seamless because the set price as per the market exchange rate is clear and you will know exactly how the amount of coins being purchased.
Figure 8: Funds sent to BTC wallet
Choose the amount of coins you want and the wallet you want to these funds to be deposited to, select your preferred payment option and confirm the trade. You should remember one thing.
CoinBase acts more like a cryptocurrency bank because its wallet controls your private keys. It is highly recommended that you transfer coins or private keys to a secured platform of your choice. If not, then create a CoinBase multi-sig vault whose third key is shared and encrypted with your password.
CoinBase trading interface is simple, clean and self-explanatory. There are up-to 10 different languages supported.
Figure 9: Buy-sell coins
Beginner traders will not have any problems purchasing their first Coins as they can set up unlimited number of wallets and when they login they will have all the necessary tools for trading right there on the web interface. Additionally, the platform has an API feature and as such you can integrate 3rd party apps.
Furthermore, if you are always travelling, you can download their mobile apps and trade on the go.
There are various ways of depositing funds in your account. USD ACH transfer is free but the moment you buy or sell ETH, LTC, BCH or BTC, CoinBase charge a 1.49% fee.
Figure 11: Coins Supported
Credit or Debit card buys attract a 3.99% charge Transfer from one CoinBase wallet to another is free while selling to PayPal incurs a 3.99% fee. CoinBase will transfer the required network fees if you want to transfer to a 3rd party wallet provider.
Figure 12: Credit card fees
Other charges include conversion fees which vary depending on payment method used and location. Users will be notified of all the fees charged before they confirm the transaction or afterwards as shown in the receipt issued. Conversion fee is calculated from the greater between minimum fees or the percentage fees.
A minimum fee is charged on all buys under $200 while percentage fees are charged depending on location and payment method selected.
How safe is CoinBase?
Often, hackers see exchanges as honey pots. It’s true that some exchanges are not thorough when it comes to security and clients have a right to ask about the security measures put in place.
- Many consider CoinBase as one of the most secure platform. Cases of account hacks are rare and this might be because CoinBase is backed by venture capitalist and therefore fund and platform security is a top priority.
- CoinBase’s first layer of security is simply from the fact that it is a US-based exchange complying with state and federal laws. They always acquire operation licenses in all the districts or states they operate from.
- Because of regulations and buy-sell features of CoinBase, customers are required to verify their accounts as part of Know-Your-customer and anti-money laundering regulations.
- CoinBase always strive to make their platform open, secure and continuously updated for the benefit of their users and stake holders.
- For the sake of user funds, CoinBase remains open and transparent. There is no time their operational funds will be drawn from customer’s accounts and in cases where the customer wants their funds safeguarded by CoinBase. These funds will be kept in custodial accounts.
- Besides the custodial accounts, CoinBase keeps 98% of their customer’s private keys in safe and secure offline paper and hardware multi sig wallets. These paper wallets are distributed all over the world in vaults and safety boxes. On top of this, the 2% that remain online are insured and in case of lose, no user will count losses.
- As an extra security, all account holders are required to have a 2FA method in place.
- Furthermore, CoinBase is backed by reputable and trusted investors like Bank of Tokyo, Reddit Co-Founder, Blockchain Capital and BBVA. With such renowned companies behind CoinBase, its legitimacy is high.
- Additionally, all traffic through their website are encrypted while user private keys-which they control are encrypted using AES-256.
- Organization wise, all CoinBase employees are vetted and must satisfactorily pass all criminal background checks before being absorbed. Afterwards, all of their computer hard drives are encrypted using a strong password.
- When users are signing up, their applications details are stored separately. All of their passwords must also be strong and afterwards, the account’s passwords are hashed using Bcrypt before being stored in the database.
- To prevent CSRF attacks CoinBase use SQL filters and always verify the veracity of each DELETE, PUT or POST requests.
CoinBase Customer Care Support
Besides the usual telephone and email, CoinBase maintain a detailed Knowledge Base and a FAQ page for all their customers and those wishing to learn more about their business. With more adoption more traffic is expected and as such, the average customer care response time is 72 hours.
CoinBase has an active community where your queries can be answered.
In the recent past, there have been complains that CoinBase are covertly tracking and closing account of users involved in activities contravening with CoinBase policies. Accounts involved in activities as gambling and other illegal things are often closed without explanations.
Countries Served by CoinBase
Citizens of the US, Canada, the UK, Australia and Singapore can access CoinBase services. Even though they claim to be global, clients from Africa and parts of Asia cannot create an account.
Furthermore, account holders from Canada and Australia cannot sell their coins.
Figure 13: CoinBase countries supported
My Final Thoughts
Starters should begin their cryptocurrency journey from CoinBase given the ease and features. Their security is perfect and the fact that your funds-from US banks-are FDIC insured makes it ideal. However, CoinBase will always control and tack how you spend your coins.
This is not attractive especially if you are searching for privacy and as such, always transfer your coins to a third party wallet provider and foot all the network fees. It will be worthwhile because you control your funds and once news of hard forks begins, you can at anytime transfer your coins to a paper wallet. Overly, CoinBase is a good cryptocurrency exchange program.