Coinbase is the largest Bitcoin exchange in the world, so a question or two about its safety becomes common.
If you find yourself asking this question, a short yet simple answer would be ‘YES’. Nevertheless, for you to arrive at the same conclusion, you need to read through this article carefully.
In this article, I will attempt to help you with the below sections:
- An Introduction to Coinbase
- Features of Coinbase
- Safety aspects of Coinbase
- Pros and Cons of Coinbase
- A typical user who would leverage Coinbase
An Introduction to Coinbase
Coinbase is a digital currency broker exchange where you can buy and trade Bitcoin, plus a few other digital coins. It is different from traditional cryptocurrency exchanges because it allows you to buy crypto using fiat currencies.
Coinbase is considered to be one of the biggest crypto-broker exchanges in the world. Coinbase holds over 20 billion U.S. dollars in assets and over 50 billion U.S. dollars in crypto has been traded using its platform since its inception in San Francisco, California in 2012.
Coinbase is a global digital asset exchange company (GDAX), providing an infrastructure to buy and sell digital currencies. It also provides the foundation to send information about those transactions out to the blockchain network in order to verify them.
Using wallet features of Coinbase
Coinbase is not just an exchange but also provides an online wallet feature. You can access your wallet not only online but also through iOS and Android apps.
However, as the general recommendation, do not store large funds on software wallets but consider transferring them to more secure hardware wallets.
Legit assessment of Coinbase
There are many crypto exchanges operating and several of them claim an authoritative following of regulations. When it comes to Coinbase, there is absolutely no doubt that this exchange is as Legit as it gets.
They own several key licenses and operate multi-nationally. You just have to ensure whether your country is supported before considering to use Coinbase.
Features of Coinbase
Some great features of Coinbase that headline the crypto exchange are:
Builds trust by offering only trusted cryptos
Coinbase is often used as a beginner’s entry point into the crypto space. Using Coinbase, you can purchase Bitcoin, Litecoin, Ethereum and Bitcoin Cash. These four digital currencies are the only ones you can buy from Coinbase.
Coinbase has imposed this restriction because it will only offer coins that are guaranteed currencies or commodities. Coinbase does not open up to tokens that could potentially be securities or equities. The situation is rare wherein Coinbase would add new coins.
This is one of the reasons why Coinbase is considered a trusted and secure platform.
Boasts an easy to use interface
Coinbase has a really intuitive interface that makes it a great platform for those just beginning in the crypto industry. Its clean design makes it convenient to navigate and the tools you need are handy.
It provides full-fledged support for fiat currency
When compared to traditional cryptocurrency exchanges, Coinbase accepts a variety of fiat in exchange for the four digital coins that it offers. The currencies it accepts are Euro(EUR), British Pound(GBP) and US Dollars(USD).
Besides, Coinbase also offers a good variety of payment methods to help their customers get their fiat money within the platform to buy crypto. These include bank transfer, PayPal, debit/credit cards and even SEPA transfers for European citizens.
Provides feature for an instant exchange
Users who would like to send money in Bitcoin but would like to transact with fiat currency, Coinbase has a feature called “Instant Exchange”. You can directly send Bitcoin by never going through the process of first buying the digital coin.
You simply pay with fiat currency and the payment will convert to Bitcoin. Coinbase does not levy extra fees for this service.
Provides ‘The Shift Card’
If you want to spend the Bitcoin in your Coinbase wallet, you can easily do that with the Shift Card. Similar to a Coinbase debit card, it is actually a Visa debit card that allows users in the US from select states to spend Bitcoin from their Coinbase wallet.
When you transact with the card, the equivalent value of Bitcoin will be debited from your online wallet. The card, however, is not yet available in all the states and any other country outside of the US.
Provides convenient transfer to sister platform GDAX
If you are a large volume trader with frequent buying, selling and trading of crypto, you can easily transfer to the sister platform of Coinbase, GDAX. Leveraging GDAX, you can trade between cryptos. In fact, on GDAX, you will be able to find a bigger selection of cryptos to trade between.
However, GDAX only deals with coins labeled as virtual currencies.
Provides strong security feature
While an online exchange can never be 100% safe, Coinbase is one of the safest web wallets you can use.
Coinbase keeps almost 99% of their assets in offline cold storage that cannot be accessed. Also, when in cold storage, funds cannot be hacked.
Only 1% of assets on the platform are available online in the hot wallet system and these assets are insured in the event of any compromises. This ensures that if your money would be stolen, you would get them back.
Also read, What is Altcoin?
Safety aspects of Coinbase
Coinbase is one of the only four crypto exchanges to have a license under the pilot BitLicense program. Besides, it sticks to strict KYC (Know Your Customer) rules and stays as compliant as possible to regulations and rules.
It has over 40 licenses to operate in the US and it is licensed to legally operate in 31 other countries. One of the best security features is that Coinbase keeps its assets insured, which does not ring alarm bells in case of a hack.
Another thing that makes Coinbase extremely safe is that it cannot be used anonymously. Due to the KYC rules, users must submit a government-issued ID proof. In some cases, address verification must be provided in order to use the platform’s buy and sell features.
Pros and Cons of Coinbase
Coinbase is a brilliant platform for beginners to start with their journey in trading. Newbies will find it easier to exchange currencies on Coinbase, as it gives more payment methods.
Why should you go for Coinbase?
- It offers a range of options for fiat deposits and withdrawals.
- Providing services to both mobile and online wallets.
- If the platform gets hacked, users can have their funds reimbursed; funds are insured.
- The platform is user-friendly and has an intuitive interface.
- Other than Bank Transfers, users can also purchase cryptocurrencies via credit and debit cards.
- To prevent manipulation of funds, the platform offers 2FA and multi-signature support.
- Connects to GDAX so you can trade cryptos
Why not go for Coinbase?
- Not available in all countries.
- Tax compliant and will share your info with tax authorities.
- As a user, all your spendings are monitored and you don’t stay anonymous.
- The fees are on a bit higher side comparing to other exchanges. Fees are 1.49% for bank transfers and 3.99% for credit and debit card purchases.
- The problem that users often face is the delay of funds up to 3 days.
A typical user who would leverage Coinbase
The typical user persona who would use and leverage Coinbase are:
Coinbase is an excellent platform for novice crypto traders. It features an easy-to-use interface will help you to learn the fundamentals of using online exchanges.
Using Coinbase you can easily transfer over to GDAX to trade and transact with even more currencies than what is offered on Coinbase.
Anyone looking for broker system where they can purchase crypto with fiat
Coinbase is a broker exchange that allows you to buy crypto with your fiat currency. This makes it an excellent point of attack into the crypto sector. In fact, a substantial percentage of the capital that flows into the crypto industry has come through Coinbase users.
People with low trade volumes and smaller businesses
For upcoming businesses and investors who are looking to invest their cash into crypto, Coinbase is an excellent option. However, for more established businesses and investors who are interested in larger volumes, fees levied by Coinbase can be pricey.
This type of investor might be better with an option that provides more economical fees and better features to stay anonymous.
Also read, How To Buy Bitcoins Anonymously
Coinbase is one of the best broker exchanges currently available on the net. It is highly trusted, well-insured and really easy to learn/use for beginners or experienced.
Coinbase is currently focusing on its growth rather than focusing on customer support, which has made them receive negative reviews. We suggest you make a survey of your requirements before landing on an exchange.
There are several options for a crypto exchange and key productivity gain from each of them. Since the crypto space is bound to be volatile, you have to start small, learn all the tricks of the trade and then get ready for the arena.
Your experience with Coinbase will definitely be great. Learn while you earn is the motto you have to adopt.