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Coinbase review

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Overall

Coinbase was launched in 2012, in San Francisco, by Brian Armstrong, previously a software engineer at Airbnb.
Among the more popular exchanges, Coinbase currently boasts over 20 million customers from 32 countries and reported an average of 50,000 sign-ups per day in 2017. Also, different than other exchanges, you can buy or sell your cryptocurrency at a set price, that is based on their market value. One of their many USPs is that they accept credit cards, a feat most exchanges don’t have.

Pros

  • One of the safer places to buy crypto
  • Beginner friendly
  • Can buy with credit/debit card

Cons

  • Very few choices in terms of cryptos
  • Available only in 32 countries

Recommended for: if you want an easy way to buy or sell crypto.

Regulation and protection for customers

Coinbase is probably one of the most secure exchanges currently available. They’re US based and therefore they have to comply with the US Federal and State laws. They are registered as a Money Services Business with FinCEN and are actively pursuing to become a regulated broker-dealer, pending approval by federal authorities. It has a virtual currencies licenses from the state of New York. It also holds an E-money License from the FCA in the United Kingdom.
Furthermore, among Coinbase investors there are some high profile firms such as Andreessen Horowitz, BBVA, Bank of Tokyo and Tiger Global Management, Y combinator, which should give it even more legitimacy.
Coinbase also segregates its customer funds from its own operational funds, and they state that in the event of insolvency, neither Coinbase or its creditors would have any rights or entitlements to customer funds. In addition, they state on their website that 98% of customer funds are stored offline, distributed geographically in safe deposit boxes and vaults around the world. The rest of the funds that are kept online, are covered by insurance.
They offer 2-step verification on all accounts and they run a bug bounty program.

Accounts

Customers from the following countries can open an account with Coinbase: Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States.
Opening an account is pretty simple and all you need is your name, an email address and password. You can choose between an individual or a business account.

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Deposits and withdrawals

As we mentioned in the beginning, Coinbase allows customers to buy with a credit card, but they also allow bank transfer. Bank transfers take about 4-5 days to complete in the US, and about 1-3 days by SEPA in the EU. Credit and debit card transactions are of course instant, but you’ll have to send a screenshot of your credit card. Coinbase also allows users to link their Paypal account, this can be used only for proceeds made from selling cryptocurrency.

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Product portfolio

Currently you can only buy or sell Bitcoin, Ethereum, Litecoin, Ethereum Classic, Bitcoin Cash. Basic Attention Token, ZRX, but Coinbase has announced they will be listing more currencies.
You can also buy a bundle of 5 cryptos (BTC, BCH, ETH. LTC, ETC), which Coinbase calls Coinbase Bundle. You’ll basically get all 5 cryptos at once, without having to buy them separately and they are purchased in proportion to their USD market capitalization.

Fees

Coinbase fees are ranging between about 1.49% ad 3.99% depending on payment method (this is in general for card transactions). They charge no fees for storing your USD or digital currencies.
If you deposit via an ACH transfer there is no fee, while with Wire Transfer there is a $10 fee for depositing and $25 fee for withdrawing in US. In Europe that’s free for depositing via SEPA and 0.15 Euro for withdrawals.
With respect to sending and receiving cryptocurrencies, users only have to pay the network fees.

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Platforms

Binance has one of the most optimized trade matching engines on the market. In their whitepaper, they were claiming it’s able to sustain a rate of 1.4m orders per second.
There are two platforms available: basic and advanced.

Basic Platform

Coinbase has two platforms, Coinbase and Coinbase Pro. While the first is what we wrote about above intended for the casual users, the latter is the exchange version, formerly called GDAX. More experienced users can avoid Coinbase fees by using GDAX to buy/trade.
All Coinbase customers will automatically get a Coinbase Pro account, with the same credentials.
While with Coinbase Consumer you can only buy or sell, Coinbase Pro offers you margin orders, limit orders, market and stop orders. You’ll also find that fees are much smaller on Coinbase Pro, never rising above 0.3% That’s for market takers (when you place a market order), while market makers (when you place an order that is not immediately matched by an existing order) don’t pay any fees.

Screenshot of the Coinbase Pro interface

More recently, Coinbase has announced the acquisition of decentralized exchange for ERC-20 tokens Paradex, which allows for trading tokens directly from your wallet with no trading fees, no custodianship and no account sign-up. However, the volume at the time of writing this review was quite low on it, and only a few coins actually were traded.

Screenshot of Paradex, a decentralized exchange for ERC-20 tokens

Coinbase also offers services and products for institutions, such as Coinbase Custody, which charges a setup fee of $100,000 and a minimum holding of $10 million. They already have a few clients, among which Polychain Capital and Walden Bridge Capital.

Mobile app

Coinbase offers a mobile app for iOS and Android, which functions very well and pretty much mirrors their web version.

API

Coinbase PRO has an API, if you like to code your own trading bots for example. You can access all of their documentation through the website.

Customer service

Coinbase customer support is available through email. They also have the usual Knowledge base and FAQs. While in 2017 this wasn’t great due to the immense popularity of cryptos, nowadays this has improved greatly.

TRI conclusion

Coinbase is without a doubt one of the safest exchanges out there. It’s simplicity provides an easy on-ramp into crypto. It’s clearly designed for the masses, and that shows in their numbers and user growth.

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