Coinbase Review 2018: Know Coinbase well before using it daily
Numbers speaks volumes and coinbase has some fantastic numbers that backs it to reach greater heights. Coinbase is a exchange platform where you can buy & sell cryptocurrencies in exchange to the fiat currency. This post is dedicated for beginners, investors & anyone who want to know about coinbase in detail.
Without further ado, let’s begin right away.
What is Coinbase?
With interest in cryptocurrencies growing through the roof, there’s a super high demand for platform that doesn’t sabotage the user’s privacy, funds & most importantly, trust. That’s where Coinbase gained a lot of lime light and trust among the cryptoverse citizens.
Coinbase serves the services in 33 countries as of now and it’s already most trusted exchange platform in the world. Sure, there are many other exchange platforms, but coinbase is a player of totally different league.
Coinbase is a secure online platform for buying, selling, transferring, and storing digital currency. The mission is to create an open financial system for the world and to be the leading global brand for helping people convert digital currency into and out of the end user’s local currency.
- Coinbase makes buying and selling digital currency easy.
- Sending or receiving digital currency between online wallets, friends, or merchants on Coinbase is free!*
- Coinbase handles security and backups so you don’t have to worry.
- Coinbase is a “one stop shop” — we offer a wallet, an exchange, and merchant tools within one simple interface.
- Coinbase is a platform on which many applications are being built using their API.
To summarize coinbase’s overall architecture, here’s pros & cons to brief you before beginning the article.
- High buying limits & liquidity
- Easy for beginners
- Buy with credit card
- Top notch security (with 2FA)
- Limited number of cryptocurrencies available for exchange
- Limited payment menthods(but most reliable methods are available)
- May track the spending habits of the users
- Inconsistent in paying for the referrals
Is Coinbase safe?
Being the best exchange platform(in terms of trust of the end users) Coinbase is considered to the be the safest exchange platforms available right now. Though it’s not decentralized exchange, security provided by coinbase is pretty awesome. However, there have been instances where users lost their funds from coinbase.
No centralized system has been absolutely safe in this internet era. There’s always some void to penetrate through. Coinbase has grown it’s security by a very huge degree & hence it’s really difficult for anyone to breach. However, it’s not impossible but it’s extremely difficult to hack through the coinbase database.
Furthermore, you shouldn’t completely trust a centralized system, it can be compromised anytime but you can take security measure for yourself to keep your own funds safer & under your control.
We will discuss more about the security in subsequent sections.
How Does Coinbase Work?
Coinbase’s simple & user-friendly user-interface makes it really easy for the end users to make a purchase cryptocurrencies. Depending on your country you may or may not be able to buy from coinbase. Currently only 33 countries are supported coinbase. Check out the supported countries from the list here. For those who’s coutries aren’t listed can subscribe to coinbase blog to know the availability. This list will also help you understand if “Instant buy” feature is enabled for the country or not.
For those who’s countries are in the list, can readily buy any of 8 cryptocurrencies that are available on coinbase. Just link payment methods you are comfortable with and start buying specific amount of cryptocurrencies. Once you buy it, the amount you purchased will be updated in the respective wallets.
It’s that simple.
What payment methods you can use on Coinbase? What about the fees?
Here are a few things that you need to know at this point
- Deposit of any amount is free. However, coinbase charges 1.49% per purchase, so deposit accordingly.
- If you’re a US citizen and have credit card as your back up payment method, you will be able to utilize “Instant buy” feature. Moreover, this feature will enable the user to buy $1000 worth of bitcoin a week.
Being one of the biggest exchange platform in the world, Coinbase finds a lot of people making their first transaction on their platform. Sure, there have been incidents in the past like that of Mt.Gox but coinbase hasn’t been unfortunate enough to face similar situations. Moreover, coinbase seems to have learned from that hack and have filled those voids with security features.
However, there’s one thing that has caught the end user’s attention & found it annoying. Coinbase doesn’t let the end user control their own funds. Once you buy it, your funds are more of theirs. You don’t even get private keys that could give you the control over your funds. Coinbase strores the coins for you and manages it remotely — similar to what traditional banks do when you put your money in it. You don’t own it, they do.
Initially known as GDAX, Coinbase pro is a trading platform that operates at comparatively much lower fees than regular coinbase does. However, as the name suggests, this platform is for more experienced user who are used to trading. Therefore the tools & data is not so user-friendly. It’s just an advanced cryptocurrency trading platform with pro level tools to make more educative decisions on the trade.
Compared to the 1.49% fee charged in regular coinbase, Coinbase pro charges fees ranging from 0.30% to 0.10% which incredibly lower than 1.49% that regular coinbase charges.
Starting this year, Coinbase rolled out wallet service for the end users that stores the funds they bought in it. Surprisingly, it also allowed having private keys that allows the users own their funds, at least have a proof that they own it.
However, since the system is centralized & third party, it’s obvious that your private keys are visible to the central database, or worst, store it. If the central database is comprimised, all the private keys will be visible to the hacker. This would lead to cryptocurrency hack bigger than Mt.Gox. Thanks to the security features, the data is safe & there have been no such breach in past.
The wallet is available on Android & iOS & you can even send & receive the funds through this wallet. Which makes it even more convenient. Speaking of security of this wallet, you can also set in-app security pin to login to the app. To add extra layer of security, you’ll need to authorize the device in a email sent to your registered email account.
To penetrate through market even deeper, coinbase serves the merchants too. As a merchant, you can accept bitcoin on your website via a dedicate plugin. The plugin is available on some of the biggest CMSs like Shopify, WooCommerce, Magneto & WordPress etc.
You can find more details in the official Coinbase Commerce page here.
Additional products from Coinbase
- Coinbase Wallet — Easiest way to send & receive funds across the world
- Coinbase Custodity — Digital Asset Custody for Institutions
- Coinbase Prime — Coinbase’s professional trading platforms for instituitional clients
- Coinbase Paradax -Trade tokens directly from your wallet
- Coinbase + Earn — Earn bitcoin by replying to emails and completing tasks. Keep the money, or donate it to charity.
Other Coinbase Features That You Need To Know
Privacy with Coinbase
As we’ve discussed in earlier part of this article, privacy is an issue in all centralized cryptocurrency platforms. Unless and untill we have reliable decentralized exchange platforms, we’ll have an element of surprise or fear that’s gonna keep us on edge of our seats.
For now Coinbase is very secure. However, you need to share your personal details for KYC & AML proceedings which more or less is similar to traditional banking. Moreover, if the system is compromised, all the data will be compromised with that. Everytime such things happen, there’s little difference that’s seen between traditional bank and such exchanges.
Limits & Liquidity
Coinbase offers comfortable limits for users to not attract attention & get the work done at the same time. If you have a fuly verified profile, i.e. you’ve given all the information asked by coinbase. You can easily see your current level and how to increase it by heading to the Account Levels section of your Settings. Depending on your current level, you can follow these quick steps to increase your account level:
- Verify phone number
- Verify personal information
- Verify photo ID (valid state ID for US customers)
If you have verified your personal information at Level 2, you can now trade up to $25,000 a day via ACH from your bank. If you wish to trade more per day, you can wire funds into your Coinbase USD wallet.
Speed of transaction in Coinbase
Depending on your country, the time taken to deposit/transfer happen would vary. In case of deposit, Coinbase has partnered with a lot of top performing payment solution companies that makes it easier & safer to carry out the transaction. However, the norms layed by the intermediate systems slow down the process a bit.
Considering the cluster of centralized systems involved in this process, the overall speed of transaction is as slow as a typical traditional transaction. On average it takes 3–4 days for a deposit to happen & depending on the cryptocurrency transferred the speed would vary. Once the cryptocurrency is transferred, it enter their respective blockchain and after that it’s the miners who take care of the bitcoin. However, if you’re sending funds to a coinbase user it’s going to be instant & free forever.
Read more on this on coinbase official help page
Sure, coinbase is a great platform for the beginners but the platforrm hasn’t been free of issues. Here are some issues that we kept track of
- Coinbase user’s account was hacked remotely. The loss wasn’t huge but still it did caught a lot of attention. Read more about the a coinbase security breach.
- There were reports stating Coinbase keeps tracks of the spending behavior of its users. This is not a good news, at least considering the core motive of cryptocurrency is privacy & security.
Starting this year, Coinbase rolled out wallet for the users that’s a mobile based app.If you’re creating a wallet for the first time, you will be asked to write down password recovery phrase of 12 random words. That’s to let you recover your account in case you lose your mobile phone.
In the next screen, you will be needing to verify the recovery phrase by tapping on the words in same order. Make sure you tap in right order or this step will not pass. Once you tap all the 12 words in same order, your wallet is ready to rock & roll.
You can double the security by having a app lock(some android phones have it in built) or have trusted third party app lockers.
Discover everything about the wallet here.
If you own Bitcoin in large amount then you have a great solution to utilize. Coinbase vault works by adding multiple users for approving a particular transaction. When you want to withdraw a particular amount you’d need to get it approved from all the participants.
Only when all the participants approve the transactions is processed. Once the transaction is approved, it will take 48 hours for the transaction to process. This delay in time is for security reasons so that you can reverse it if it’s accidental or someone else has unauthoratatively approved it.
Again, you will need to trust your funds to coinbase as they may shut the service down, might get hacked or compromised.
Final thoughts on Coinbase — Is it safe to use?
Yes & No. We’re are at dilemma to answer this. We love coinbase but the fact that it’s centralized system kills the core motive of using cryptocurrency. Furthermore, not having access to private keys further disrupts our emotions. One thing to note here as a user is that if you’re just starting out and want to get look & feel of cryptoverse, coinbase is the best place to start out.
One of the best thing we like about coinbase is that it lists only regulated cryptocurrencies irrespective of their price & market cap. There’s Bitcoin on the list & then there’s 0x (ZRX). The company has focused & invested a lot of time & money to bring it to where it stands. To a lot extent, it has earned the reputation it has right now. While the world is in a transition phase & we’re used to waiting for the funds to reach its destination & security breaches, coinbase has a pretty safe spot right now.
But the coming generations will not even know that there was something like centralized financial system even existed. With this in mind coinbase should be planning their shift towards decentralizing their whole ecosystem. We cannot emote enough for the power this would bring to coinbase. Coinbase already has a lot of reputation and using that they can grow to a level which we can only imagine.
Right now, coinbase is the safest centralized platform to rely your funds, personal information on. There are many other exchanges but coinbase is way ahead that those. For now, you can use hardware wallets to keep your funds safe instead of having them in coinbase wallet. Use hardware wallets like Trezor & Ledger.
We hope this post has helped you expose yourself to Coinbase and decide who to trust your funds on. We’d love your feedback, put them in the comment section below. It can be a hi too, we’ll wave back.
We shared your concerns & thoughts on coinbase, we want you to share this post with everyone in your group who’s looking for this information. This keeps us motivated. We will be coming with exclusive article on how to create account with coinbase & use it like a pro. Till then help this article reach more & more people.
Originally published at https://bitfolio.org/coinbase-review.