What is Coinbase?
With over 89 million verified users on the platform in over 100 countries, Coinbase is one of the most popular cryptocurrency exchanges in the world. If we go by the trade volume, Coinbase is in the top 5 platforms based on our May 2022 analysis. .
For beginners, there’s regular Coinbase, and for advanced traders, there’s Coinbase Pro. To enable easy access, users can get the Coinbase app on their phones.
Coinbase has a “learn” as well as an “earn” feature. On the Coinbase website, there’s a “learn” tab under which users can learn about cryptocurrencies, NFTs, investments, market updates, and much more.
Meanwhile, the “earn free crypto” program rewards users for getting familiar with specific crypto projects. For example, you can take a course on a new currency which, when complete, will award the user with a small amount of that currency.
Here are some Coinbase highlights:
- Founded in 2012, Coinbase is present in more than 100 countries
- The exchange has over 150 cryptocurrencies available
- Coinbase is beginner-friendly and Coinbase Pro is for active traders
Coinbase company overview
Set up in 2012, Coinbase happens to be one of the earliest exchange platforms. Before 2020, the cryptocurrency company was headquartered in San Francisco. However, when the pandemic disrupted the 9-5 workplace as we knew it, Coinbase became fully remote.
Coinbase was founded by Brian Armstrong who was an engineer at Airbnb. Later on, Fred Ehrsam, an ex Goldman Sachs trader, joined Armstrong as a co-founder.
In April 2021, Coinbase went public, and the company was listed on NASDAQ. Before listing, the reference price was set at $250 per share.
As far as the company’s future plans are concerned, the Coinbase NFT marketplace is on its way. Currently, the much-awaited marketplace is in beta, and as a limited-time offer, the platform is charging 0% fees.
Does Coinbase Have its Own Token?
Coinbase, in collaboration with Circle, manages the USDC cryptocurrency. Developed by Centre, the stablecoin has been pegged to the US Dollar. The whole aim of USDC is to provide a stable-valued cryptocurrency. So every USD Coin is backed by one US Dollar.
USDC was released in September 2018. As of now, the token is trading at $1.00. As the coin is pegged to the dollar, its price has been rather stable.
Tokenizing a US Dollar into USDC is an easy process. It looks something like this:
Send USD to token issuer > Issuer creates a USDC smart contract equal to USD value > the new USDC is issued to the user, and the USD is kept as a reserve
Why users should hold USDC:
- It’s a 1:1 representative of the US Dollar on the blockchain
- It’s a USD ERC-20 that has reserved fiat value
- Users can hold it to avoid hyperinflation
- Send and receive funds across the globe - fast, secure, and cheap
- Buy digital assets - cryptocurrencies, in-game items, NFTs, and more
Here’s the good:
- It supports a huge number of altcoins
At the time of writing, over 150 coins are available on the platform. You can find all the major currencies, like Bitcoin, Ethereum, Cardano, Tether, and more. Apart from the leading coins, you’re very likely to find lesser-known coins too. The listing gets updated frequently.
- Beginner-friendly features
Coinbase basic has a beginner-friendly UI and an extremely insightful “learn” section which gets you introduced to crypto. Trading is also quite beginner-friendly and when you feel comfortable, you can upgrade to Coinbase Pro.
- Available in more than 100 countries
Coinbase is almost a global exchange as it is available in over 100 countries across the globe. Only a handful of countries have been excluded. Australia is one of the major countries where Coinbase doesn’t offer services. It is available in all the states of the US except Hawaii.
- Chance to earn cryptocurrency
Coinbase also offers small interest on your crypto deposits. And with the “earn” feature, users can earn cryptocurrency rewards for getting to know about a crypto project. For example, users can undertake a course on a new crypto project and earn some rewards at the end of it.
Here’s the bad:
- Slow customer service
Even though Coinbase is one of the oldest exchanges with a relatively good reputation, it hasn’t implemented live chat or manned phone lines for customer service. The only way to get in touch with the help is through an email ticket. Coinbase also extends support through an automated phone service. In case you suspect a hack, you can get your account frozen via this phone line.
- High transaction fees
Regular Coinbase is beginner-friendly, but it can be quite expensive. The transaction fees are high and they can pile up over time. Of course, depending on the payment methods you choose, the fees can be lesser. For instance, a bank transfer will cost you less than a debit card withdrawal.
Coinbase supported cryptocurrencies
One of the obvious “pros” of Coinbase is the huge number of cryptocurrencies available on the exchange. With over 150 coins listed on the platform, Coinbase caters to diverse audiences. New additions are constantly made
- Shiba Inu
- Stellar Lumens
As discussed earlier, many users are dissatisfied with the high fees of the exchange. Here’s an overview of the fees they will charge you on Coinbase, Coinbase Pro, and banking methods.
Trades that exceed $200 are charged a percentage of the total amount.
- Coinbase Pro
These are based on the volume of cryptocurrencies a user trades in a month. So, for instance, if you trade 10,000 worth of crypto, you’ll pay a 0.60 taker fee or a 0.40 maker fee.
As you can see, the taker and maker fees decrease with the increasing trade size.
- Banking Methods
Here’s how much Coinbase will charge you for deposits and withdrawals:
Coinbase deposit methods
Users can fund their Coinbase account via:
- Bank account
- Debit Card
- Wire Transfer
Other Products Offered by Coinbase
While signing up on a crypto exchange, it's always smarter to have a look at some additional products that the platform offers. Very often, these features come in handy while investing or trading. Coinbase also comes loaded with features for individuals, businesses, and developers.
Here’s a quick summary of other products:
- Coinbase Wallet
The Coinbase Wallet lets users hold cryptocurrencies and NFTs. The self-custody wallet can be downloaded on your phone. The wallet lets you buy, spend, send, receive, trade, and store cryptocurrencies, ERC-20 tokens, and digital assets. Users can also access decentralized apps through the app.
- Coinbase Card
Coinbase crypto card enables users to spend cryptocurrencies wherever Visa is accepted. This is indeed a convenience for those who like to spend crypto. However, there’s a $5 dollar fee to get the card.
- Crypto Asset Custody for Institutions
For businesses and institutions, Coinbase Custody segregates and holds digital assets in cold storage. All the assets are covered by industry-standard insurance. It’s a fiduciary under NY State Banking Law and is regularly audited by external companies.
Apart from these, the exchange offers many more features for businesses and developers. You can check out their products page for all the products.
Trading services offered by Coinbase
Depending on whether you’re a newbie or a pro, you can opt for the primary Coinbase or Coinbase Pro. If you were wondering what’s the difference between Coinbase and Coinbase Pro, the trade services will clear your question.
If you’re new to trading, then you’ll find Coinbase very easy to navigate and use. You can trade via their website or the mobile app. You can sell, buy, and trade just with a few clicks. Note that the primary version does not have advanced trading options.
- Coinbase Pro
If you’re used to trading stocks or looking for advanced trading options, then you need to switch to Coinbase Pro. The pro version has a more “technical looking” interface and is available only on the website.
Right at the center, there’s a panel that displays the movements of the chosen currency. To the right, you have a log that updates trading history. The left side panel displays the order book where you can see which cryptos are available for buying. Below the central panel, you can view the market depth.
To place orders, use the order form that is located to the extreme left of the screen. The form takes up less than a minute to fill up.
Coming to the trading tools, Coinbase Pro offers advanced trading options, including
- Market Order
- Limit Order
- Stop Loss Order
Users can easily switch between Coinbase and Coinbase Pro. You can use the same credentials to log into the Pro version. No fees are charged, and the switch happens in a few seconds. You can also deposit your funds back and forth between the two versions.
Are there any alternatives to Coinbase?
Yes, Coinbase faces competition from other leading exchange platforms. It often gets compared to Kraken and Binance.
Here’s a quick comparison:
Coinbase vs Kraken
Coinbase vs Binance
Even though blockchain technology is quite sophisticated, it’s not without its shortcomings. Coinbase has been hacked before, or at least, there have been data breaches and customers have been affected.
For instance, in 2021, a Coinbase hack affected over 6000 users. Hackers allegedly exploited a weak spot in the company’s SMS account recovery process. They gained access to the user accounts and transferred the funds into wallets that were not associated with Coinbase.
However, to fully gain access to a Coinbase account, the hackers required email IDs, phone numbers, and passwords. There’s no evidence to prove that this data was taken from Coinbase. Nonetheless, Coinbase fixed the weak spot and reimbursed the affected users.
In a 2020 report, Coinbase stated that unauthorized transactions are rare. Only 0.004% of the customers experienced transactions where their emails were hacked, SIMs were swapped or other personal data was breached.
As far as the crypto assets are concerned, Coinbase stores 97% of them offline. The cold storage drives are scattered all across the planet. The remaining 3% of the assets are stored online to ensure smooth withdrawals.
Users in the US can get FDIC insurance for USD balances. Note that crypto assets are not backed by FDIC.
To further ensure the safety of your digital asset, consider switching to cold storage. You can enable two-factor authentication and set a strong password to prevent break-ins.
How can users ensure the safety of their accounts?
Coinbase offers multiple ways to ensure the safety of their accounts.
- By default, the Coinbase Security Prompt is activated for your Coinbase account. Users get a push notification to approve or deny a login attempt made through the Coinbase app on another phone, web, or mobile web.
- The most basic 2FA is via SMS text. Users who enable this will receive the authentication codes on their phones via SMS.
- Another way to set up two-factor authentication is the Security Key. To log in, you need the key and the physical device.
- Users can also use Google or Duo authenticator to generate an OTP. Coinbase will display a QR code (which is your secret key) and you have to scan it with the authenticator app.