Coinbase: A comprehensive review of the Bitcoin exchange
Binance is a cryptocurrency exchange platform based in China. It was launched on the 1st of July, 2017 and has gained popularity since then.
The main reason for this increasing popularity is its numerous features that make trading easy. However, there are some disadvantages as well which we will be going through later in this review.
If you want to know more about Binance or if you are planning to start using it, it’s best to read our review first so that you can learn how to use the exchange properly before investing your money into cryptocurrencies and also get an idea of whether binance suits your needs or not?
Founded in 2012, Coinbase has been forging a solid reputation as one of the oldest exchanges in the cryptocurrency space. Offered in 32 countries (as of late-2019), Coinbase has been serving more than 2.5 million customers in the cryptocurrency space.
Generally praised for it’s ease-of-use, Coinbase is often one of the first exchanges that newcomers to the cryptocurrency scene use to buy and sell Bitcoin and other cryptocurrencies. But what is this Coinbase, and is it a legitimate website that one can feel safe purchasing Bitcoin and other cryptocurrencies?
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When searching for Bitcoin and cryptocurrency exchanges, one will inevitably come across a website called Coinbase. Today we are doing we are doing a Coinbase review.
Is Coinbase Safe?
While doing our research for this Coinbase review, we wanted to know how it stacked up to other crypto exchanges when it comes to security.
One of the many reasons Coinbase has become so reputable is the fact that Coinbase is perhaps one of the safer exchanges one can use to buy and sell Bitcoin and other cryptocurrencies.
Coinbase employs a few tactics to ensure that the funds of their users are kept safe. One of these is the fact that Coinbase keeps 98% of user funds stored offline, with the data being encrypted and backed up onto paper and USB drives that are dispersed into safety deposit boxes across the world.
Coinbase’s USD wallet is also insured by the FDIC up to $250,000. This means that if you have USD fiat stored in your account in your USD wallet, it will be insured against an attack, much like a standard bank account.
To further the security of each account, Coinbase requires the use of 2FA, or Two Factor Authentication, to access the account at login. This essentially uses a 3rd party application (Coinbase recommends Authy) to help verify your identity.
The application broadcasts a number every 30 seconds to your phone. Once you enter the correct code that is shown in the 2FA application, Coinbase will permit you access to your account.
Often, if Coinbase doesn’t recognize your IP address, it will send a verification email to your email inbox. After clicking the Verify link embedded in the Coinbase email, you will be granted access to your account.
How Does Coinbase Work?
Coinbase exchanges a user’s currency for another currency, much like any currency converter. The difference between Coinbase and a currency converter is that Coinbase deals directly with cryptocurrencies.
By offering different payment methods in combination with a simple user interface, Coinbase effectively allows a user to buy cryptocurrency with ease. Once the user has bought/sold their desired amounts, they are free to do with their assets as they choose.
To get started, all one has to do is sign up for an account with Coinbase. Since Coinbase (like nearly all cryptocurrency companies) is subjected to Anti-Money Laundering laws, account holders are required to submit KYC (Know-Your-Customer) information, generally including your name, address, Social Security Number or any other identifying proof or certificate. This helps Coinbase verify your identity and make sure that your activity is not deemed suspicious or malicious under the Anti-Money Laundering laws.
Once your information is entered, the only thing left to do is to add your payment method(s). Coinbase currently accepts payments from bank accounts, credit/debit cards, and more.
How to Buy Bitcoin
Buying Bitcoin on Coinbase is very straightforward. If in a desktop browser, all one needs to do is click the blue “Trade” button in the top right-hand corner of the window.
For the mobile application, simply click on Bitcoin in the asset list, and the push the blue “Trade” button. A box will pop up that gives you several options: Buy; Sell; and Convert.
To buy, simply make sure you have the “Buy” option selected. After, input how much Bitcoin you want to buy, either by how much USD (or other fiat currency) you want to spend, or by how much Bitcoin you want to buy (regardless of price). Assuming you have created an account and completed your payment credentials, select what payment method you will be using.
Once you have completed these steps, a confirmation window will appear giving you details about your purchase. Generally, your purchase will be available to trade on Coinbase immediately, but will not be able to be withdrawn from Coinbase for 3-5 days. If you are interested in a recurring buy, Coinbase allows the option of setting your own schedule and your purchase amount desired.
How to Buy Alternative Coins
To buy alternative coins (A.K.A. “altcoins”), the process is nearly identical to that of buying Bitcoin. For a desktop browser, click on the “Prices” tab, and view the list of coins offered on Coinbase by applying the “Tradable Assets” filter in the filter list. Once you have decided which altcoin you would like to buy, click the blue “Trade” button next to the asset.
For Coinbase’s mobile application, simply click on the asset listed, and push the “Trade” button. Like the process for Bitcoin, a box will pop up offering the option to Buy, Sell, or Convert. Ensuring the “Buy” option is highlighted, enter either how much USD (or other fiat currency) you would like to spend, or how many coins or tokens you would like to purchase.
Afterward, select which payment method you would like to use to complete your purchase. Once you have finished your order, a confirmation window will appear, giving you details about your purchase. Generally, your purchase will be available for trade on the Coinbase platform immediately, but will require 3-5 days to withdraw funds from the exchange. Recurring buys can also be completed with altcoins.
Coinbase offers a fairly secure option for anyone that may choose to leave their funds on the exchange (though NOT RECOMMENDED). As mentioned previously, the USD wallets are each FDIC insured $250,000.
For each asset the user owns, they will have a corresponding wallet address. To help secure their users’ funds, Coinbase claims to keep 98% of their users’ funds offline, with data encrypted, and stored in vaults across the world.
With the mobile application, users can easily send/receive funds on the go. Coinbase wallets allow both incoming and outgoing transactions, much like any wallet.
One of the many criticisms that Coinbase has received over the span of their business is their fee policy. The company charges a spread of 0.5% for all purchases and sales of digital assets, which may fluctuate based on market prices. In addition to their spread fee, they also charge what they call a Coinbase Fee, which is either a flat fee, or a variable fee determined by the user’s region, purchase, and/or payment method.
The flat fee is as follows:
1) $0.99 for any transaction $10 or less;
2) $1.49 for any transaction that is more than $10 but less than $25;
3) $1.99 for any transaction costing $50 or less, but more than $25;
4) $2.99 for any transaction less than $200, but more than $50.
Generally, fees will be higher if the user chooses to use a debit/credit card, since the variable percentage rate is higher than the flat fee. ACH transfers are free, with Wire Transfers costing $10, or $25 outgoing. As a general rule of thumb, Coinbase fees will always be the greater of the minimum fees outlined in their fee policy.
Coinbase Exchange (Coinbase Pro, or GDAX)
Coinbase Pro is Coinbase’s version of the live cryptocurrency market that trades 24/7 much like a Forex exchange. Referred to as GDAX (Global Digital Asset Exchange) before their official branding change, Coinbase Pro offers a number of different cryptocurrencies and trading pairs. Most of these assets are compatible with Ledger and Trezor hardware wallets.
With Coinbase Pro, Coinbase has made sure that their straightforward usability and high user compatibility made the transition to the platform. Once on the platform, a user only has to deposit funds into their specified wallet.
From there, the user is free to trade however they see fit, taking advantage of the different trading pairs (such as Bitcoin/Ethereum, which is a market for using either Bitcoin or Ethereum to buy/sell the other of the pair, much like using USD to buy Bitcoin or shares of a stock).
Withdrawing funds is just as simple as depositing, and can be performed by entering the desired wallet recipient’s address into the address bar, with the total amount you would like to send.
Much like the standard Coinbase platform, each user’s USD wallet is FDIC insured up to $250,000.
Coinbase Pro does have it’s own set standard of a fee tier. We found in our Coinbase review, the platform operates on a “Maker-Taker” model. This means that if you place an order at a price not already specified on the order book, and that order cannot be filled immediately, you do not have to pay a fee, as you are what is known as the Maker.
The Taker, on the other hand, pays the Taker fee, because they have placed an order that gets filled immediately, at market price. The Taker fee is generally tiered as follows: 1) 0.3% up to the first $10 million traded; 2) 0.2% for trading totals between $10 million and $100 million; and 3) 0.1% for any trade totals valuing more than $100 million.
Coinbase Review Conclusion
Whether you are new to cryptocurrency, or have been in the space for awhile, Coinbase offers a uniquely simple platform for anyone that buys/sells cryptocurrency, or has interest in doing so.
Often, newcomers have found their way to Coinbase, and rightfully so. The company’s platform is user-friendly, straightforward, and intuitive to use. With less than 5 clicks, a person can either buy or sell Bitcoin and other cryptocurrencies.
Furthermore, Coinbase is backed by a number of investors, and has built a good reputation with banks since it’s inception into the cryptocurrency space. Coinbase has been consistently building a strong reputation in the
cryptocurrency space as a safe, reliable exchange that anyone can use.
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