What is the Coinbase exchange?
The Coinbase exchange offers facilities to support the buying and selling of cryptocurrencies. It also offers one of the most popular digital wallets, which is a place to store your virtual money once purchased.
Coinbase is a US-based cryptocurrency exchange, located in San Francisco. It was established in 2012 and by 2013 it was the highest funded Bitcoin start-up in the world. It operates in over 30 countries, serving over 12 million customers to date, and with close to $50 billion in digital currency traded. If you were to ask people in the know to list cryptocurrency exchanges, then Coinbase is likely to be one of the first ones mentioned.
Coinbase operates the GDAX exchange, which is primarily aimed at professional traders. However, the site is still beginner friendly and new users should not be put off by this.
How Coinbase works?
There are two details about the Coinbase exchange that are worth knowing from the start: 1) it accepts deposits from a credit card and bank transfer, and 2) it offers straightforward trades where you can buy currency for a set price. This makes Coinbase the perfect site to visit if you are a beginner and wanting to get started in cryptocurrency investment.
The fixing of a price is an important feature in a market that can appear volatile. It is possible for the price to change as the deal is being processed, which obviously poses a risk for the buyer and seller. The Coinbase exchange allows its users to trade the currency at a set price, which is based on the market value. Not only does this bring a degree of certainty for users but also speeds up the transaction.
To begin, you will need to set up an account with Coinbase. All you need to set up an account is your name, email address and a password. Once you have signed up you will be asked to choose your account type. If you want a simple, individual account, then you will need only verify the email address. You may also be asked to verify a telephone number, to allow for 2FA security protocols.
Once you are signed up, you can then set up your payment method. This could take up to 5 days, if choosing a bank transfer in the US. A credit card is instantaneous – but will require a screenshot of the credit card for verification. Once your account is funded, you are free to go ahead and buy cryptocurrency. This can be as simple as clicking buy and then watching the funds transfer to your Coinbase wallet.
Key information about Coinbase
Before we give you our Coinbase review, it is important to give you all the key information that will help you form your own opinion. The most important information relates to security and fees.
Perceptions in the cryptocurrency community are that Coinbase is one of the safer exchanges available. Coinbase learnt from the past experiences of platforms such as Mt. Gox and have worked hard to secure the site from outside influence. As it is sited in the US, Coinbase complies with US State and Federal laws – something that speaks of its commitment to the safety of information, as well as to the funds stored on the site. Other exchanges have purposely registered in countries where there are less stringent requirements in terms of regulation.
You can use Coinbase to buy Bitcoin, Ethereum and Litecoin. Coinbase restricts the number of virtual currencies offered based on a desire for security. They offer those coins and tokens that they believe have a firm market foothold and proven track record. This means if you want to speculate on newer innovations, then you are going to have transfer your Bitcoin, Ethereum or Litecoin to another exchange.
The legitimacy of Coinbase is further established by the number and nature of its investors. The exchange site has received backing from The Bank of Tokyo and BBVA to name just two. There is also a transparency in the way that the site chooses to store funds. It has segregated customer funds from the funds used for the operation of the company. This means in the event of insolvency the customer’s funds are protected. In addition – 98% of funds are held in cold storage – meaning they are offline and out of the reach of security threats.
When using the Coinbase exchange there is a fee for the different services offered. Unlike some sites that fix this fee and therefore promote transparency, Coinbase has a complex fee system depending on payment method and the scale of the trade. The fees can range from 1.49% to 3.99% – but even at the highest rate – this is cheaper than most other cryptocurrency exchanges.
Coinbase seem to consistently seek means of lowering fees for its users. In February 2018, the site introduce a Segwit enabled Bitcoin wallet, which means withdrawals from the site are now cheaper than before.
Your Coinbase Review
Positives
- the site accepts deposits from credit cards, as well as bank transfers. Funds from sales of cryptocurrency can also be transferred to a PayPal account.
- the Coinbase exchange takes the security of its site particularly seriously. It sections off customer funds from operational funds and it keeps the majority of coins in cold storage. The measures taken by the site offer much reassurance to the customer.
- although aimed at professional traders, the Coinbase exchange is suitable for beginners to use.
- the site is cheaper than most of its competitors.
Negatives
- the site only offers Bitcoin, Ethereum and Litecoin – so more adventurous traders will need to go elsewhere
- the fee structure is not as transparent as other cryptocurrency exchanges.
Overall
Coinbase is a worthy leader in the world of cryptocurrency exchanges. It has a proven track-record, is well-supported by investors and does the core business of buying and selling virtual currency simply and quickly.