Is this a Safe Exchange Platform To Exchange?
Coinbase is the largest digital currency exchange in the US and the third largest in the world, by trading volume. It is headquartered in San Francisco and was founded in 2011, by Brian Armstrong and Fred Ehrsam. Coinbase.com boasts over 13 million registered users and is continuing to grow at a rapid pace.
The digital platform was part of the Y-combinator program in 2013; a program to help launch new startups and attract investment funding. They received a Series A investment round in the same year. In 2015, they received further funding, including investments from the New York Stock Exchange and the financial services group USAA.
In January 2015, Coinbase.com launched the Global Digital Asset Exchange (GDAX) trading platform. The exchange allows institutional and professional investors to trade a range of digital currencies, including Bitcoin and Ethereum. So, the platform’s two main products are its retail site, which makes it easy for people to buy and sell digital currency and its professional trading platform.
Customers can conveniently buy digital currency with a range of payment options, including bank transfer and credit card. US customers can withdraw funds deposited from their account into their Paypal account. The marketplace has an easy to use interface, which has made it popular with new cryptocurrency investors.
Coinbase supports buying and selling digital currency using funds from a bank account in over 30 countries, including the US, Canada, most of Europe, Singapore and Australia. In other countries people are free to sign up for an account, they just can’t connect it to their bank account.
Coinbase.com has done a great deal to help make Bitcoin and other cryptocurrencies more accepted in the wider community. They have done deals with some major retailers to accept Bitcoin on their websites, for example, Dell, Overstock, and Expedia.
Let’s review a bit more about how to use this platform.
What Is Coinbase Used For?
Coinbase is used to trade digital currencies, specifically Bitcoin, Bitcoin Cash, Etherum and Litecoin.
Customers can set up an account on the digital platform, connect their bank account to it, and store their currency in a wallet on the platform. Since trading platforms have gone belly up in the past, it is not considered a great idea to hold currency in an exchange, unless you are keeping it in their multisig vault.
Customers can fund their Coinbase.com account with fiat currency by doing a wire transfer, from their bank account or with a credit card.
A digital API is available for developers to create new applications, or to integrate it into an existing one. If you operate an eCommerce website, for example, you could use Coinbase to integrate Bitcoin payments into the site’s existing shopping cart and checkout flow.
Coinbase offers various tools to help companies accept online payments. Expedia for example, has partnered with the site to accept Bitcoin for hotel bookings. Coinbase can approve transactions in seconds. For businesses looking to avoid the volatility of cryptocurrency, cash payments can be made directly to a bank account in just a couple of days.
A Review of the Advantages:
Exchange sites have operated in something of a wild west landscape and have largely been unregulated. The Japan based Mt Gox collapse in 2014, is still fresh in many investors’ minds. Coinbase opened the first US regulated trading platform. The company is well funded and has received support from the banking community. This can provide some security and peace of mind to its users.
The digital marketplace has insurance to cover customer funds. Their insurance covers breaches of Coinbase’s physical security, cyber security attacks and any theft from their employees. The insurance does not, however, cover individual account security breaches, therefore it is important to keep your account secure. Since digital currency is not legal tender, it is not subject to FDIC insurance. US dollar wallets up to the value of $250,000, are covered by FDIC for US residents.
Delving into cryptocurrency can be a daunting experience for beginners. Coinbase’s user-friendly and intuitive design has proved popular for people just starting out and they have even been referred to as the “AOL” of the crypto currency world. Its Android and IOS apps are some of the top downloaded apps in the whole app store, not just in the category.
The platform allows customers to control their own private keys using multisig vault. This protects users if Coinbase.com were ever to go offline, they would still have access to their funds. While this platform continues to support multisig vaults, from August 2017, they no longer support the creation of new multisig vaults.
Like any exchange (read our list here), Coinbase takes its security seriously. They claim that 98 percent of customer funds are stored offline. This protects customers’ funds should they ever be hit by hackers. They also support 2-step verification to keep your account secure. While other platforms lack transparency, this platform is much more open when it comes to reporting problems that they might be experiencing.
In January 2017, the company obtained a BitLicense to allow it to legally conduct virtual currency business in New York. It is only the third company to successfully obtain the license.
A Review of the Disadvantages and Limits
Coinbase’s appeal to beginners and first-time investors has had the effect of stretching the customer support resources to their limits. Many people report slow response times in getting their issues resolved.
One of the main concerns with the site seems to be the delay in withdrawing funds to their nominated bank account, particularly with newly verified accounts.
Since the company operates under US banking laws, they are fairly strict about signing up with the appropriate forms of identification. These requirements are based on the ‘know your customer’ (KYC) and ‘anti-money laundering’ (AML) laws in the areas where the company operates.
Some people have reported problems getting verified, especially when using their webcam to verify their documents. If you are having problems getting verified with your computer’s webcam, the company suggests using a mobile phone. If you live in one country, but your ID is from another country, it might not even be possible for Coinbase to verify your account.
Another potential issue with the platform operating under US laws is that you could have problems with using currency on another website which is illegal under US law, such as online gambling, adult content websites and illegal drugs. Some people have reported having their account frozen, sometimes for inexplicable reasons.
While there are plans to add more digital currencies in the future, the exchange site currently only supports trading in four digital currencies.
Coinbase’s close ties to banks is sure to rankle some traditionalists; since removing dependence on traditional banks was one of the attractions for people to get into crypto currencies in the first place.
For many people looking to get into cryptocurrency, one of the easiest ways to get your first coins is to purchase them with fiat currency. This exchange makes this easy with various payment options, such as through a bank transfer or with a credit card. So, for countries which support this, it’s is a good option. If you live in the US then there is a degree of consumer protection.
The exchange site has good support in the traditional banking community. It has received funding from the New York Stock Exchange, USAA and Japan’s Bank of Tokyo Mitsubishi UFJ. These investments add to Coinbase’s credibility in the greater financial world.
Coinbase does go against some of the founding principles of Bitcoin, such as independence from the banking industry and its strict identity requirements remove any possibility of anonymous transactions. You are also required to follow US laws on how your funds are spent, even if an activity, such as online gambling is legal in the country where you live.
The lack of support for some of the emerging altcoins makes this platform less attractive to aspiring investors in cryptocurrency.
What kind of fees does the platform charge?
This platform charges conversion fees to use its Conversion Service. The fees are calculated depending on the payment type and your location. In the US for example, the fee is 1.49%, with a $0.15 minimum for transferring from a US bank account. It can take up to three to four days to get the funds verified in your account.
When transferring from a Coinbase USD wallet the fee is 1.49% and for debit/credit cards, the fee is 3.99%, but the funds become available immediately. Withdrawal fees are the same, 1.49% to a US bank account, 1.49% to a Coinbase USD wallet and to Paypal, the fee is 3.99%.
Does the marketplace accept all paypal, credit card, and debit card?
To purchase coins, the app accepts bank account transfers and credit/debit cards. Paypal can only be used to withdraw money to.
Is there an app you can use?
Coinbase has both Android and IOS apps available. The apps are extremely popular and in December 2017, the IOS app was the most downloaded app in the whole Apple store. The apps allow you to buy, sell and store coins directly from the app. You can also set up price alerts to get notifications when a currency hits a certain price.
What is the coinbase vault?
Just as you have different ways to store regular money, the platform has different ways to store your cryptocurrency. They offer a standard wallet and a vault account. The vault account can receive funds like a wallet, but to take funds out of the vault, additional security steps need to be followed. This helps to keep your funds secure, should your account ever become compromised.
What kind of ID verification do you need to go through?
Since Coinbase is a regulated financial service company they need to follow the ‘know your customer’ and anti-money laundering regulations. Their verification can be done through a computer with a webcam or smartphone. They do not accept emailed or scanned copies of your ID.
For US customers, the site only accepts state-issued driver’s licenses or identifications cards. They do not accept passports. You also need to take a picture of your face using the webcam.
How to Use Coinbase Properly:
There are many currency exchange review sites available. They typically provide a rundown on the platform with the most pertinent information and some kind of comparison with other exchanges. They can be useful for finding an trading platform to suit your needs. If they allow comments on the review, the comment section can also provide some enlightening information as to the different problems and issues people face using the exchange.
There are a number of crypto and Bitcoin support forums which can be a great resource for finding information and getting your questions answered. The subreddit Coinbase is one such place.
After signing up and getting your account verified, you need to click on Settings and then, Payment Methods to enter your bank account or credit card details to set up payments.
Then, if you would like to purchase coins, you simply need to select the type of coin you would like to purchase and the amount. They also give you an option to purchase a set amount on a daily, weekly or monthly basis.
In the mobile app, you can set up price alerts to get a notification when a currency reaches a certain level. The prices of the currencies are shown on the site in real-time and you have access to various charts.
Coinbase allows you to easily send coins to another person. You do it simply by entering the email address or address of the person you want to send currency to and the amount.
To set up 2-factor authentication, which is highly recommended that you do, go to settings and then security.
Coinbase is used more as a convenient way to buy and sell crypto currency using fiat. If you would like to get into trading then you should sign up with Coinbase’s trading site: GDAX. You can deposit funds into your GDAX account directly from the site.
GDAX also offers more in-depth charts. GDAX has all of the usual features you would expect with a trading platform, such as market, limit, stop and margin orders. The trading fees on GDAX are considerably less than Coinbase, such as .25 on GDAX versus 1.5% on Coinbase with a bank transfer.
An Alternative to www.Coinbase.com
Some of the alternative sites to this particular exchange platform, include Gemini and Binance.