Pros of Coinbase
- Coinbase is the most popular cryptocurrency exchanges in the world with high liquidity.
- The company provides access to the top currency assets such as Bitcoin and Ethereum.
- Purchasing and selling the digital currencies is done very instantly.
- The website design is made simple with easy navigation feature, making it more comfortable to the beginners.
- The deposits or crypto funds stored with coinbase are insured and makes its users feel secured.
- Coinbase allows its users to buy digital currencies with high limits.
- The transaction fees is relatively low when compared to other companies in the market.
Cons of Coinbase
- The payment methods with coinbase are limited to either credit cards or debit cards.
- Each and every account of the users is monitored, which can track how the users are spending the digital currencies.
- The customer support is the biggest drawback of the company.
As the necessity to facilitate cryptocurrency is increasing, a safe and secure requirement of exchanges is needed. Coinbase is one such most popular exchanges available at present in the market today.
It is one of the biggest cryptocurrency exchange company, which is established in 2012 and is based in San Francisco. Coinbase serves around 12 million customers and operates in 33 countries.
The exchange company is the largest one in the cryptocurrency world and is the highest funded Bitcoin startup. Coinbase allows its users to trade the cryptocurrencies at a price which is based on the market value.
It also allows its users to purchase the cryptocurrencies faster than any other exchange company. Coinbase is one of the few companies which accepts creditcards for payments.
At present coinbase allows its users to buy Bitcoin, Litecoin and Ethereum. It has plans to add more altcoins to the bucket in near future.
Coinbase has stated that will support Bitcoin cash from 1st January 2018, but no current plans in respect to Bitcoin Gold.
In addition to this the exchange company operates GDAX exchange, to focus on professional traders. The coinbase has also started supporting Segwit Bitcoin wallets, which enables to bring down the withdrawal fees.
How Does Coinbase Work?
To get started with Coinbase the user needs to create an account. The account is set up by visiting the coinbase website and clicking on sign up button.
The page then gets directed to a form filling page where the user need to fill all his personal details like full name, email, password and location.
Then the user needs to complete the captcha and certify him as 18 years above along with agreeing to the terms and conditions of coinbase.
Once done the user needs to access his email and continue with the verification link, the add details such as selecting the country and adding the phone number.
A 7 digit verification number will be sent to the phone and this needs to be entered as code on the directed page.
After the user is done with entering the code, he may or may not be birected to verify his ID. If he is not directed implies the account is successfully setup.
But the verification of ID will be done some time later because to purchase cryptocoins or continue to purchase them need ID verification any time.
As coinbase is based in US, the users need to abide by the KYC or AML laws, know your customers and anti money laundering laws requires companies to verify the identity of its users so as to prevent any criminal activities from occurring.
But for users unfortunately, it involves to provide a large amount of personal information to the company which includes photo copies of their IDs too.
The user will now be prompted to page where he needs to fill his personal details. Once done a photo ID must be submitted which can be a driver’s license or any other proof of identity. This process may take a few minutes and once it is done the ID verification process is completed.
For additional security the users account can be enabled by a 2 Factor Authentication (2FA).
To do this the user needs to navigate to the settings page and select the security tab, then scroll down to the 2 Factor Authentication section and make sure that the verification code is set to any amount of digital currency and select the enable authenticate button.
Enter the 7 digit code sent to phone via SMS , where Coinbase will generate an authentication code which can be used as a 2 factor authenticator.
For this a Google authenticator needs to be downloaded on the users phone. After downloading add the coinbase authenticator code to the app. This can be done by scanning the QR code or manually entering the code.
The authentication codes keep changing very often and someone who tries to breach the account will be in need of the users phone to access his account.
Even if the username and password is hacked, they would need the 2FA code generated in the users phone to access the account. With the 2FA setup the users account is safer.
Once done with 2FA the next process is adding the payment methods, Coinbase offers its users 3 payment methods: Debt card, wire transfer and bank account.
In order to add the payment method the user needs to navigate to the settings tab and select the linked accounts tab. The user can find a button with link a new account which allows to select the payment method to add.
Debit cards are usually the best option to buy a small amount instantaneously. Purchase with debit cards allows its users for instant transfer of crypto currencies to their accounts, which is the best option for quick trade.
But the purchase limits are much low compared to other payment options, also the transaction fees are high with this mode of payment.
To link the debit card all the details of it needs to be entered, once done coinbase will send two pending charges to the account, to verify the card the last 2 digits need to be entered.
Bank accounts are much opted ones for large purchases, but the transactions are not as quick as debit cards.
When the user makes his purchase with bank account the amount paid is locked in the moment and the cryptocurrency is transferred to the account after 4-5 business days.
The advantage here is, if the value of crypto goes high, then the user will make some money at the same time if the value goes down he may lose the money.
The disadvantage is the crypto funds are not owned by the user for 4-5 days, where he is left with no option to trade another currencies.
The limits on bank accounts are much high and starts at $7500 per week. The best part with bank account method is the trading fees is very low at 1.5%.
To link the bank account choose the bank of the users choice and then the user needs to enter his bank user id and password.
If the user does not find his bank or fails with this method, he has an option to enter or add bank account manually by giving his routing number.
The user is then sent 2 deposits for verification. But the whole process takes around 5 business days to link the account.
With the payment methods sorted, finally comes to buying the cryptocurrencies. The user needs to navigate to the buy and sell tab which is seen on the top of the page.
Then select the type of cryptocurrency the user is looking out for. The page is then navigated to the payment method , where the amount needs to be added in dollars. The user is then directed to confirm the purchase. He may also need to enter the 2FA code to confirm the purchase.
Selling the cryptocurrencies is also similar process to that of purchase, but the only difference is the user can do it only with the credit card. The bank account method or USD account is available for users but the money will be put on hold in coinbase.
To deposit the cryptocurrencies or to send the cryptocurrencies to other account. The user needs to select the accounts tab. To deposit the currency, the user navigates to his desired cryptocurrency and selects the button receive.
Coin base will then generate an address for the user to send his cryptocurrency. The user needs to make sure to send cryptocurrencies to respective wallets and also needs to be sure to use his own address.
In order to send cryptocurrencies to another address the send button needs to be clicked. Then enter the desired recipients address and the amount to be sent in dollars. The user needs to make sure to send cryptocurrencies to respective wallets or else it will be lost.
The user needs to generate the 2FA code and enter in the page so as to complete the transaction. A miner fee is seen for sending currency, this amount does not go to Coinbase but it is sent to the miners to keep the network running.
The coinbase fees are generally low when compared to the other exchange companies and the charge fees depends on the payment methods. It ranges roughly from 1.49% to 3.99% and for credit cards transactions the fees is usually at higher end of scale.
Transactions between the coinbase accounts are charged free. The transactions made from outside to coinbase account needs to undergo 3 confirmations for security measures before they are shown up in the account.
Coinbasse offers its USD wallets and Hosted digital currency wallets a free service with no charge.
This means the transactions are not chargeable when the digital currency is transferred from one coinbase wallet to another coinbase wallet, but incurs network transaction fees if the transfers are off the coinbase platform.
These type of transaction coinbase will charge based on the estimate of the network transaction fees which is anticipated for every transaction. In few cases the charges may differ from the estimate and will be disclosed at the time of the transactions.
In addition to just sending or receiving a digital currency, customers can purchase or sell the digital currency or convert it from one type of digital currency to another type.
The customers can also buy a market weighted basket called as coinbase bundle of selected digital currencies which are supported by Coinbase.
When the user requests for a digital currency transaction, coinbase fills that order through one or more orders in the coinbase platform.
It then establishes the exchange rate for the transactions by adding a margin. Coinbase also charges a separate fee called flat fee or percentage of the transaction. The coinbase fees also varies from place to place and also depends on the payments methods and few circumstances.
Coinbase also reserves the right to reject on the transactions if it is unable to fill the corresponding order on coinbase trading platform due to changes made in the market price of digital currency.
In order to provide uninterrupted services the coinbase derives its marketing price data from other crypto exchanges.
Coinbase charges a spread of about 0.50% percent for both digital currency purchases and digital currency sales. The actual spread may also vary high or low with the market fluctuations.
As the coinbase fees vary from location to location, its transaction limits also vary from place to place, they are also dependent on the payment methods and verification status too.
The transaction limits are made visible to the users on the coinbase page in the account limits section. Coinbase allows its users to apply for higher limits too but these are not applicable to credit card transactions.
In order to apply for higher limits the user needs to get his identification verified and a fully verified US resident user can make transactions up to $50,000 per week and the Europeans users are limited to a maximum of $ 30,000 in their accounts.
Transactions with cryptocurrencies are easy to store, send and receive through Coinbase. To send a crypto, the user needs to navigate to the send tab seen on the account, choose a wallet from which the coins need to be sent, then enter the amount along with the public key of its recipients address and click send.
To receive a cryptocurrency , the user needs to navigate to the accounts tab, choose a wallet where the funds needs to be transferred into and click on receive.
After clicking on the receive button the user will be provided with accounts wallet address which is shared to the sender to receive the funds into account.
Safe and Secure
The biggest perception every user of cryptocurrency have is to look for a platform which is safe and secure to invest in. Coinbase is considered to be one such secured platform currently available.
Coinbase has actively regulated itself to ensure it provides an open and innovative financial system. The regulations of coinbase have restored confidence in cryptocurrencies.
Coinbase has transparent methods when it comes to storing the funds. It stores its 98% customers cryptocurrency funds by offline through hardware wallets and paper wallets which are stored in safety deposit boxes and vaults worldwide.
The remaining portion of cryptocurrency is stored online and is insured in event of hack. The customers can entitle to receive the funds if lost by this insurance policy.
Coinbase offers its customers a 2 factor authentication method, which is through SMS or third party app such as Google authenticator.
Coinbase also notifies its users, if any new user device or IP address tries to attempt access the customers account. Also if the customer accounts are compromised , coinbase do not accept any kind of liability for the lost funds.
Coinbase takes multiple steps to provide protection in terms of data security.
Rather than storing sensitive data on servers, which makes the hackers easy for theft, the platform chooses to disconnect data from internet and store it in paper backups and USB drives.
This data is then distributed geographically around the world through vaults and safe deposit boxes .
In addition to the security measures provided for the platform and its funds, Coinbase takes extra care and precautions regarding its employees and organization in whole.
The employees are made to undergo a rigorous test and have to clear the criminal background check. As said coinbase uses a two-step verification process and uses separate password for every device and service.
In terms of authentication process security, coinbase passwords are hashed in its database. It is done by using a 12 cost factor along with bcrypt, which means when a user creates a new password or resets his password coinbase prompts for strong password.
These credentials are stored separately from the code base and database. These factors make coinbase a commended exchange company with high safety and secure measures for its users funds.
The customer support offered at coinbase is through email, also has a knowledge base and a FAQ page is made available for the customers.
The wait times with the customer support varies depending on the huge increase in the demand for its services.
In the recent times the user have experienced some delays, but on a normal and regular situations the response time is expected to be within 24-72 hours.
The users have also complained with the responses provided by the customer support which do not match to queries raised and sound canned responses.
Coinbase is also seen operating by phone support line, but the feedback through phone is not accurate or responsive. As far the services are concerned it can be rated as negative.
The support team mostly is seen not resolving the issue properly on the first go and dig into it properly on the first response.
Most of the users complain that the customer support of coinbase is not really supportive and does not address the issue properly. The issues are not properly explained to its customers.
Coinbase is a viable option for bitcoin exchange which offers many features to the customers. It has practical and easy to use services for buying and selling the digital currencies.
Irrespective of the security measure mentioned above regarding coinbase, its always safe and recommended to transfer the purchased cryptocurrency through coinbase to the users personal wallets which has full access with a private key to the digital currency and this applies not just to coinbase but any other online exchange to be on a safer note.
The company has invested enough time and money in its making, so as to give its users a smooth and painless experience.
Coinbase is the best option for users who are new to the industry and looking to acquire cryptocurrency. Based on the level and capacity of the accounts the users own, it allows them to enjoy the high limits to buy cryptocurrencies at their own leisure.
To conclude it can be considered as a good introduction to the cryptocurrency world and makes its users to experience the new world by dipping their toes into it and not letting them feel weird or strange.