Blockchain

An In-depth Review of Coinbase Cryptocurrency Exchange

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Coinbase review

Coinbase is one of the largest and oldest crypto firms in the world. It is headquartered in San Francisco, California and has branches in 33 countries. Brian Armstrong and Fred Ehrsam founded this company in 2012 as part of Ycombinator. At the start, Coinbase acted as a crypto brokerage firm that sold Bitcoins to its clients directly. Along the way, the company added other services.  Today, the company provides a lot of services, but the main service is crypto trading, which lets users buy and sell Bitcoin through their bank accounts or credit cards. Coinbase’s site shows that it supports coins like BTC, ETH, XRP, LTC, BCH, BSV ETC, ZRX, BAT, USDC, XLM, and ZEC.

The exchange follows the rules and guidelines of financial watchdogs such as the SEC. To date, Coinbase has raised more than $200 million from global investors such as Andreessen Horowitz, Rabbit Capital, and the NYSE.

Services Offered by Coinbase

Brokerage Services

Coinbase provides its clients with crypto brokerage services. This allows its users to buy or sell crypto assets. The exchange’ website is easy to use and this allows beginners to buy digital currencies while charging a fee. However, most clients do not like the fact that the exchange denies them control over their cryptocurrencies. Opening a Coinbase account means that you lose direct access to your crypto holdings. The exchange operates like banks by storing its users’ crypto holdings.

Coinbase Pro

Coinbase Pro, previously known as GDAX, is a crypto trading platform. Unlike the Coinbase brokerage service, which makes the process of buying digital currencies easy, Coinbase Pro is made for expert traders. This platform also charges a smaller fee and has advanced trading options. Coinbase Pro has features like,

  • Real-time market data. This feature gives users access to real-time market data and allows them to create secure trading bots through the platform’s API.
  • Address whitelisting. This function increases security by allowing users to limit the withdrawal of crypto assets to specific addresses.
  • Competitive fees. This feature offers a changing fee structure that has lower fees for high volume trades.

Coinbase Wallet

Coinbase launched its crypto wallet last year, and it is available on both Android and iOS platforms. The exchange’s users use it for storing private keys on their mobile devices. According to a blog post, the exchange reached its initial goal after years of operation. This is because Coinbase started out with a goal of building a crypto wallet, but ended up creating an exchange.

Merchant Solutions

Coinbase exchange gives online merchants the ability to accept digital currencies on their websites through a dedicated plugin. The plugin is backed by content management systems (CMS) like WooCommerce, Shopify, and Magento.

Other Services

On top of the above services, Coinbase also offers;

  • Coinbase Index. This website monitors the price performance of all crypto assets listed on Coinbase. It uses the coins’ market valuations as a metric. The index also monitors the supply of each coin listed on Coinbase.
  • Custodian services. Coinbase offers its institutional clients an option to let it store their crypto assets securely.
  • Earn.com. Coinbase purchased Earn to give the general public a chance to earn Bitcoin by sieving out spam emails.
  • Paradex. This service allows Coinbase’s users to trade from their wallets directly.

 Coinbase Transaction Fees

Coinbase has a flat rate for transactions below $200. Standard purchases have a 1.49% fee, but purchases through credit cards have a 3.99% fee. The exchange allows free deposits through ACH. Using other means to deposit funds costs $10. Transactions between Coinbase wallets are free.

Coinbase’s fee structure is quite complex and most users of the platform find this annoying. The exchange also has a tendency of rejecting purchases when there are big price changes. Nonetheless, Coinbase is one of the cheapest exchanges, especially when compared to brokerage firms like CoinMama and CEX.io.

Buying Limits

After setting up a Coinbase wallet, the exchange will limit the amount of digital currencies you can buy until you raise your limit. The limit for US residents is $1,000 worth of crypto per week. Upon raising your limit, the exchange allows you to buy up to $25,000 worth of cryptocurrencies in a day. Also, the means you use to buy the coins determines your limit. For instance, ACH transfers have higher limits that credit card purchases.

The process of raising your limit involves,

  • Issuing and verifying your phone number
  • Giving and confirming your personal Information. This comprises details such as your full name.
  • Providing and authenticating your photo ID

Countries in Which Coinbase Operates

Coinbase operates from the following countries;

Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom (UK), and the United States (US).

Quality of Coinbase’s Support Services

Coinbase has a detailed support section that provides answers to the most common queries. If you choose to submit a ticket on the exchange’s help desk, the support team responds in 2 to 3 days. The exchange also has a phone support line. However, most users of the exchange do not find it efficient.

The quality of the support is wanting as the support team goes through the raise issues briefly, responding in a predetermined manner. This, in most cases, does not provide the needed help.

Better Business Bureau (BBB) gives Coinbase’s support team an ‘F’ because it has 584 complaints filed against it. Out of the 584 complaints, the exchange has failed to resolve 19 cases.

Closure and Freezing of Accounts

A lot of crypto adopters hate that Coinbase is fully compliant as its operations are similar to those of banks. The exchange has AML and KYC polices. According to reports, Coinbase monitors how you spend your crypto assets and shuts down your account if you violate any of its rules.

Instances under which the exchange will close your account when you

  • make transactions that to adult services
  • engage in crypto gambling and skill-based gaming
  • purchase prohibited items via the darknet
  • resell coins on other exchanges
  • your transactions go against the exchange’s algorithm

 Other Flaws of Coinbase

  • Failing to honor the terms of its affiliate reward program. Per reports, Coinbase does not pay the participants of its referral program.
  • Picking sides in debates that happen in the crypto community. Coinbase gives its opinion on debates going on in the crypto-verse. Service providers in the sector should have a neutral stance and follow whatever side the market flows in.
  • Patenting the blockchain. Reportedly, Coinbase has nine patent applications for crypto-related inventions.

How Coinbase Fairs Against Other Exchanges

Coinbase Versus Gemini

The fee structure on Gemini exchange is more complicated than Coinbase’s. The Winklevoss twins-founded exchange charges higher fees than Coinbase.

Coinbase Versus Binance

Binance has lower transactional fees compared to Coinbase. It charges 0.1% per transaction while Coinbase Pro charges 0.3%. Binance also has more cryptocurrencies listed on its platform compared to Coinbase.

Coinbase Versus Robinhood

Robinhood allows US investors to buy cryptocurrencies, but unlike Coinbase, it gives its clients direct access to their coins. The exchange is suitable for trading, but not holding coins. Robinhood is available in 25 US states and alleges to have 0% fees. The exchange also allows the trading of traditional stocks.

Parting Shot

Coinbase has a user-friendly interface that is suitable for crypto beginners. However, the exchange does not give its customers access to their coins. The company works hard to expand its services. While this is an admirable trait, Coinbase seems to have put growth above the satisfaction of its users.

Buy crypto through Coinbase and move the coins to another cold wallet to have full control over them.

Have you ever used Coinbase? If yes, how was your experience? Let us know in the comment section below.

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