The 1 Minute Summary
- Coinbase is probably the most famous cryptocurrency exchange after Binance.
- There are 2 versions: Coinbase and Coinbase Pro. We are focusing on the former in this review.
- It is easy and free to move funds between Coinbase and Coinbase Pro – when you are ready to trade up, it’s easy and free.
- Coinbase is strong on the larger tokens on the Ethereum blockchain.
- It does not have the coin choice of some of its competitors
- Polkadot (DOT) is a big gap.
- They are fully licensed. But that does limit their ability to offer some services.
- Trading fees are higher than average (they are cheaper on Pro).
Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase was one of the first cryptocurrency exchanges.
Coinbase has launched as a public company.
The company is using a direct listing and trades under COIN on Nasdaq. Their closest competitor is probably the Kraken exchange. This will likely follow Coinbase onto the market.
What Coinbase Does
Coinbase is a centralised exchange where you can buy and sell different cryptocurrencies with FIAT money (eg USD) or other cryptocurrencies. It stands out with its clean, user friendly design and well thought out interface. Both the website and the mobile apps are easy to understand and use, particularly for investors who are new to cryptocurrency trading.
One of the nice features is the easy navigation between coin pricing and your portfolio, including clear graphs of your performance over time. This exchange is also an excellent place to learn about crpto and new coin launches – in fact they frequently offer promotions that pay you to learn about new tokens and coins.
It’s a popular destination for new traders, although they do have an issue with more experienced traders migrating off their system to other brands. This is where Coinbase Pro comes in handy for the company.
One of the key things to understand about Coinbase is that you do not have full control over your own funds except through the Coinbase platform. They control your private keys and you do not have a seed phrase. For most investors, that is fine.
They act in a similar way to a bank and transferring your assets out to a wallet is easy: Coinbase holds your assets for you.
Coinbase also has a service for more advanced users called Coinbase Pro. We will cover this in more details in another review, but this platform allows you to trade currency pairs, fees are lower than the entry service and there are advanced trading options available. The great thing is that it is easy (and free) to instantaneously move funds from one platform to the other.
Coinbase have a seperate wallet for iOS and Android which stores your private keys on your device. It is well worth checking out, and is one of the most popular mobile cryptocurrency wallets out there. For an alternative, read our Atomic Wallet review– sometimes it pays to hold your coins completely separately.
You can trade the following cryptocurrencies on Coinbase. They are not the biggest in terms of markets offered (that would be Hotbit and Binance), but they do offer the most popular coins and are adding new assets all of the time. Read our article: “What is Filecoin?” for more details on one of the markets they added. They are pretty strong on tokens that run on the Ethereum network. Uniswap, for example, is available to trade, as is Polygon (MATIC).
The big gap is POLKADOT for now.
|Bitcoin||BTC||The leading cryptocurrency|
|Litecoin||LTC||The “silver” to Bitcoin’s “gold”|
|Wrapped Bitcoin||WBTC||On the Ethereum Blockchain|
|Dai||DAI||Stablecoin pegged to USD|
|Synthetix Network Token||SNX|
|Bankor Network Token||BNT|
|Basic Attention Token||BAT|
You can fund your account with the following:
Bank transfer (including ACH in the US and SEPA in the EU)
Credit/Debit Card – fund your account with Visa or Mastercard.
PayPal (only for withdrawals at this time)
Dollar Cost Averaging
One nice feature of Coinbase is their Dollar Cost Averaging system when you buy coins. You can program your account to make a repeat purchase (say in smaller amounts) every day, week, twice a month or monthly.
This allows you to easily set up a drip investment strategy that shouls help to smooth out the volatility in the price of the asset.
Staking and Rewards
Coinbase offers staking and rewards on Dai, Tezos, Algorand and Cosmos. Just make sure it is set up in the settings (Financial Services) and you will receive income on any balance in these currencies. You will be able to find better returns outside of the app, but it is an easy feature that will see you earning on your crypto very quickly.
You retain full ownership of your crypto. Coinbase take a commission.
Earn Free Crypto
Coinbase run some nice promotions on some of the newer coins where you can get paid to watch videos and learn about the coins. Why not?
Coinbase is available in 100+ countries
Cryptocurrency conversion services are currently available to customers in Australia*, Canada*, Singapore*, the United States, the United Kingdom, and the following European countries:
Isle of Man
This is not an area that Coinbase have made easy to understand, so bear with us here. Correct at time of publication, subject to change.
Coinbase charges a spread of around 0.50% for cryptocurrency purchases and sales. The actual spread may be higher or lower due to market fluctuations.
They also charge a Coinbase Fee (on top of the spread), which is the greater of (a) a flat fee or (b) a variable % cost depending on the region, product feature, and payment type.
If the transaction amount is less than or equal to $10, the fee is $0.99 / €0,99 / £0,99 / C$.99
If the transaction amount is more than $10 but less than or equal to $25, the fee is $1.49 / €1,49 / £1,49 / C$1.49
If the total transaction is more than $25 but less than or equal to $50, the fee is $1.99 / €1,99 / £1,99 / C$1.99
If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99 / €2,99 / £2,99 / C$2.99
So, a customer in the US buying $100 worth of BTC and paying with a US bank account or their USD Wallet, would be charged a flat fee of $2.99. The variable percentage fee depends on the country. in the US it would be 1.49% of the transaction, or $1.49. Since the flat fee is greater than 1.49%, the fee would $2.99. Purchasing with a debit card incurs payment processing fees, and the variable fee is 3.99%. Since this is higher than the flat fee, 3.99% would be charged.
You can check the variable percentage fees on the Coinbase website.
The bottom line is that Coinbase is more expensive than many of its competitors, but it’s very easy to trade here. The Coinbase Pro fees are more competitive (around 0.25%).
Once you feel more comfortable with the system, it make sense to carry out your trades there, as it is free to transfer funds between the 2 platforms.
Once you have set up your account, you will be able to purchase a small amount of cryptocurrency but, like all exchanges, you will need to go through some verification steps before they will raise your limit.
Coinbase strive to be “the most trusted cryptocurrency platform”, so all ID documents must be verified through the Coinbase website or mobile app.
You will need to:
Verify your mobile number
Verify your personal information (proof of address)
Verify your photo id (Government-issued photo ID)
Coinbase have positioned them out to be “whiter than white” in the market. Make sure you follow their rules on acceptable behaviour (read their User Agreement to make sure you are not violating the rules), or you will run the risk of having your account frozen or suspended with Buy/Sell Services suspended (withdrawal allowed) or even preventing access to funds in the event of a suspicion of fraud.
This can include:
Payments to adult services.
Bitcoin gambling, including skill-gaming.
Sale or purchase of contraband through darknet markets.
Resale of coins on exchanges without AML / KYC.
Coinbase is one of the longest established cryptocurrency exchanges and they have developed a reputation as an operator that plays to the rules. They are fully licensed.
The site and apps are well designed, particularly for less experienced traders, but they do have a few gaps on the coins they offer and the fees are on the higher side (you can reduce these by using Coinbase Pro later)