Coinbase Review and Comparison
It only makes sense to do an in-depth Coinbase review, given Coinbase.com is one of the world’s leading cryptocurrency exchanges. Building its brand since its inception in 2012, the exchange site now has an adjusted trading volume of over $350 million dollars. Coinbase is arguably the most trusted and recognizable cryptocurrency exchange in the world. It’s the platform’s ease-of-use and brand recognition that allows Coinbase.com to act as the ultimate on-ramp for beginners in the crypto space. It’s also what allows Coinbase to sign up thousands of new customers every day. At its height during the 2017 bitcoin boom, 50,000 new users a day were using Coinbase to buy their first bitcoin. Or at least get their hands on some instantly.
Coinbase is the ‘entry-level’ exchange of the industry. This review goes through all the reasons why. Those curious about bitcoin who have yet to officially take the plunge need look no further than right here.
This post will cover everything listed in the table of contents below:
Coinbase is taking care of customers and their crypto needs since 2012. The company’s head office resides in San Francisco. CEO Brian Armstrong is just 36 years old. In 2016, Armstrong earned himself a coveted spot on Fortune Magazine’s 40 under 40 list, ranking as one of the most influential business people under 40 in the world. His current net worth stands at over $1.6 billion and is good enough to rank Armstrong is one of the wealthiest people in crypto according to Forbes.com. Prior to launching Coinbase, Armstrong held computer programming jobs at some top notable companies including Deliotte, IBM and Airbnb. Armstrong’s personal financial success is why he’s a proud member of The Giving Pledge, an initiative launched by Bill Gates and Warren Buffett that commits the wealthy to philanthropic projects. Armstrong is also the founder of GiveCrypto, a project that is distributing $4 million to unbanked people all over the world this year.
Today, Coinbase has over 1,100 employees. It’s most recent public revenue figure shows the company made over $1 billion in 2017, the year that saw bitcoin’s biggest price increase. While the company is no longer signing up 50,000 new users a day like it was in 2017, the present-day number is more like 8,000 new users per day.
While the growth of the company’s user base is slowing down a little bit, Coinbase was one of the first cryptocurrency exchanges ever to make instant purchases with a credit card easy. For that reason, its brand and services will likely always hold the first mover advantage on competitors. Its share of the market is still vast. Part of the reason for that is its level of services and the growing number of currencies available for purchase and trading on the platform.
Currencies Offered at Coinbase.com
Bitcoin is the first member of the Coinbase roster. Believe it or not, Coinbase didn’t offer any other coins for many years. It wasn’t until 2017 that both Ethereum and Litecoin were listed on the site. Now that bitcoin is mainstream, the number of coins available on the platform will continue to increase at a much faster pace than it did in the early days of cryptocurrency.
In terms of breaking down how many different currencies are supported on Coinbase, it’s important to distinguish between currencies available for instant purchase for the credit card, and currencies available on the company’s trading platform, Coinbase Pro. Customers who don’t have any cryptocurrency to start won’t use Coinbase Pro right away. Thus, the average bitcoin beginner’s first experience with coin base will be with the retail website, Coinbase.com.
At the present moment, the coins listed on the non-Pro Coinbase site include: Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, USD Coin, XRP, Stellar, Zcash, 0x, Litecoin and Basic Attention Token. Most of the coins listed have only been made available in the last 18 months to two years. A recent blog post from Coinbase lists the next group of candidates up for consideration for joining the platform. Those next currencies may include Algorand, Cosmos, Dash, Harmony, Ontology, and Waves.
Coinbase’s listing criteria were updated a year ago to fit the company’s mission. Coins wishing to be considered for listing on Coinbase need to promote economic freedom, demonstrate an ability to innovate or improve the efficiency of blockchains, provide equal opportunity to everyone to access ‘Finance 2.0’ and enable truly decentralized, trustless consensus mechanisms.
Other Coinbase Services
Coinbase’s flagship offering is allowing beginners and enthusiasts to purchase cryptocurrencies instantly using a credit card or bank account, but there are two other major services under the platform’s umbrella that will also continue to grow as adoption increases. They are Coinbase Pro and Coinbase Prime.
As mentioned, Coinbase Pro isn’t for somebody looking to exchange fiat currency for crypto. Pro is a crypto-to-crypto exchange. While the platform looks more like a traditional stock trading platform and might be intimidating for newbies, it is the more cost-effective way to get into the altcoin market. At the present moment, 26 different cryptocurrencies are supported between all three Coinbase platforms. Ziliqa, Maker and Bitcoin Satoshi’s Vision are currently the only ones not supported by the Pro Platform. Many of the 26 projects still aren’t listed on the original Coinbase.com site but that number is going to continue to grow as executives at the company continue to do their due diligence and introduce new projects to the platform.
Coinbase Prime and Coinbase Custody
Coinbase Prime and Coinbase Custody both serve institutional investors, but not exactly in the same way. The Prime platform is for investors looking to trade more than $10 million in digital assets on a consistent basis. This mostly means big time businesses involved in crypto investing, not an individual bitcoin millionaire (although a bitcoin millionaire could be running a big business). Investors looking to do this need to go through a special application process and get approved before gaining access to the market. The challenge with people who are trading that much value in digital assets is gaining access to liquidity. The crypto industry itself is still small enough that one large transaction can send the price of bitcoin swinging really high or really low. Either way, Coinbase Prime aims to help facilitate these transactions for investors.
Coinbase Custody on the other hand can still theoretically serve the same target audience. However, the reason custodianship exists in the cryptocurrency space is primarily to serve organizations. The goal here is not just to provide liquidity, but to also provide security in storing large volumes of digital assets. Potential stakeholders for a service like this includes the following types of organizations:
- Asset allocators
- Pension funds
- Family Offices
- Hedge funds
- Venture capital funds
- Index funds
As the above video explains, Coinbase Custody provides not just liquidity, storage and consulting services, it also allows organizations to become participants in staking digital assets to a particular blockchain network and also allows them to get involved in the governance of such protocols.
Coinbase Payment Methods and Fees
Coinbase.com fees vary based on the payment method, the country supported and to a certain extent whether the transaction is instant or not. The chart below lists the fee structure for the United States, Canada, Europe, the United Kingdom, Australia and Singapore. The chart below details all the payment methods available, the respective fees for using those methods, the countries that support them and the transaction speed associated with the payment methods.
|Payment Method||Countries Supported||Funds Available||Currency||Fees|
|Credit Card||United States||Instant||USD||1.5%|
|Bank Transfer||United States||5-7 days||USD||1.49%|
|Debit Card||United States||Instant||EUR||3.99%|
|Single Euro Payments Area Transfer||Europe||1-3 days||EUR||1.49%|
|Debit Card||United Kingdom||Instant||GBP||3.99%|
The overwhelming majority of users who sign up for coin base will initially use a credit card to make a purchase. This option is available to anybody in North America or Europe. The transaction fee is 1.5%. I think transfer by contrast costs slightly less. The fee is 1.49%. However, only American customers can connect their bank account and exchange fiat for cryptocurrency that way.
Customers who don’t have access to credit cards because banks are blocking them or simply because they don’t own a credit card can use a prepaid debit card, like a Visa Debit or something equivalent to that. The benefits of this is that users struggling with their bank or credit score can still get instant access to bitcoin, but the downside is many crypto-friendly debit card services charge added fees or require users to maintain a minimum balance in order to keep their cards in good standing.
|Coinbase||Coinbase Pro & Prime|
|1. Buy, send, receive ONLY.
2. Excludes New York
3. EUR and crypto order books ONLY
4. Send and receive ONLY
5. Send ONLY
1. Crypto order books ONLY
2. Excludes New York
*Available order books vary by country.
*The above chart is provided courtesy of Coinbase.
Coinbase Buying Limits
Coinbase.com is one of the best crypto exchanges in the world when it comes to making it easy to get involved with cryptocurrency. To be clear there are very few drawbacks to using Coinbase. The website’s buying limits happens to be one of those drawbacks.
Just because Coinbase lets users buy bitcoin and other digital currency is instantly, doesn’t mean that users can buy as much as they want at one time. Users have to prove themselves. That means being a customer for an extended period of time and displaying a proven track record of spending significant amounts of money with Coinbase before being allowed to spend more. It also means completing Know Your Client verification, meaning customers must submit government identification and expose themselves to tax authorities in their home country. Coinbase is a legitimate above-board company and maintaining that sort of reputation means consistently providing information to the United States Internal Revenue Service when requested.
The company also cares about limiting the impact of a potential hack on customers. That’s why somebody brand-new to the platform can typically only purchase a few hundred dollars worth of cryptocurrency at one time. That limit can increase to thousands of dollars over time, but there’s no way to request a limit increase through the sites customer support channels. It’s theoretically possible to reach a buying limit of up to $25,000 per day on the site, which is probably more than most retail investors would want to purchase anyway. However, that limit is most accessible to American users using a bank transfer and possessing a significant history of regular, properly verified purchases on Coinbase. Anybody outside of the United States using a different payment method will struggle to get to that level.
The payment chart higher up in this post displays the countries Coinbase supports. They include: the United States, Canada, the United Kingdom, the Europe Union, Singapore and Australia. Anyone outside those countries likely has to opt for using a different cryptocurrency exchange for now. That doesn’t mean Coinbase won’t expand its service area to other nations in the future though. Anything is possible.
Compared to support mechanisms at other crypto exchanges, Coinbase does offer a fairly comprehensive support system. However, the reality is there really is no top-notch system for support among exchanges. The support site for Coinbase offers a toll-free phone number, email, live chat and knowledgebase. The thing is none of those options will get a customer a live human being to talk to over the phone. Everything is set up for accounts to be locked in the case of a hack. Individual hacks happen a lot at Coinbase. Unfortunately, the company’s insurance policies only cover major hacks affecting a large group of customers at once, not an individual instance of two-factor authentication being compromised.
The safest way to store digital assets is to keep them off of the internet on a hardware storage wallet. Not only are Coinbase and all other cryptocurrency exchanges hackable, no exchange offers customers the ability to speak to a human and resolve the issue.
So while Coinbase customer support is the best in the crypto industry given it offers the most options for finding solutions, customers are better off safe than sorry. It’s easier to store assets on a physical key and leave them there than it is to ask anyone for help. Unfortunately, that’s the best rule of thumb to follow when dealing with any exchange.
Considering the negative reviews Coinbase has with the Better Business Bureau, it’s kind of strange that the company has more customers than any other cryptocurrency exchange in the industry (save for maybe Binance.com). BBB.org rates Coinbase an F. Written customer complaints detail many stories of accounts being hacked, currencies being sold at supposedly higher than market prices and the lack of communication from customer support.
Unfortunately, this is going to be a recurring theme in all of the cryptocurrency exchange reviews conducted here at CryptoRadar. The bottom line is, bitcoin and other cryptos are designed to empower the individual to be their own bank. With that great power comes the great responsible of securing one’s own assets. As much as centralized exchanges aim to make access to the market easier and promise to take on some of the responsibility surrounding security, the bottom line is Coinbase and other exchanges stand to take on very little of the blame, and thus, none of the exchanges reviewed at CR will rank well on consumer ratings sites.
Coinbase reviews don’t get any better on other sites. Trustpilot.com rates the company 2 out of 5 stars with 80% of reviewers listing the company as bad. Bittrust.org rates the company a 1.9 out of 5 stars. Sitejabber.com rates it a 1.9 out of 5 stars. In contrast to our bitcoin watch reviews, or our Bitcoin IRA reviews, there literally isn’t a single customer ratings website that gives Coinbase a pass. Keep in mind however that most review sites get the majority of their reviews from unhappy customers. The happy ones are less likely to leave a review.
Coinbase vs Other Exchanges (Binance, Kraken, Bittrex etc…)
|Criteria||Coinbase.com||Other Cryptocurrency Exchanges|
|Fiat-to-crypto capability.||Yes. All customers can use credit and debit cards. Pre-authorized debit is only for Americans.||Kraken accepts fiat, most others require customers to have crypto already.|
|Coins Offered||Bitcoin, Ethereum, Litecoin, Ripple, Stellar. 26 cryptos offered across all Coinbase platforms.||Anywhere from 10-26 cryptos depending on the exchange.|
|Deposit & Withdrawal Fees||1.49%-3.99%||0.1%-3.99%|
|Deposit & Withdrawal Limits||$100-$25,000 depending on customer loyalty and spending habits.||upper limit up to two full bitcoins. Lower limit is a few thousandths of a bitcoin.|
|Trading Fees||$2.99 on the first $200 worth of crypto. 1.49% after that||anywhere from 0.1% to 1.49% on a trade.|
|Customer Ratings||F rating on Better Business Bureau.|
1.9 out of 5 stars on TrustPilot.
|Most exchanges rank low on security and customer support, some rank higher in terms of offering a better fee structure and more cryptos.|
As far as turning fiat currency into crypto instantly goes, no exchange does it better than Coinbase.com. Most exchanges reviewed here at CR don’t offer that at all. Other exchanges for the most part only facilitate crypto-to-crypto transactions. Kraken does allow customers to place fiat currency on their account, but that usually requires a wire transfer, and wire transfers are anything but instant.
As far as customer service goes, no exchange on the market lets customers call a live person, so that’s not a fair measure of how good or bad support is. Therefore, we have to rank Coinbase as the best, for the simple fact its knowledgebase is robust and the site at least offers a toll free number and email address as points of contact.
Fees are definitely where Coinbase takes a hit. Most exchanges don’t deal directly with banks or credit card companies, which means charging a 3.99% fee the way Coinbase does isn’t necessary. Of course, the 3.99% is the highest fee charged at Coinbase. Bank transfers typically cost around 1.49%. Nevertheless, customers get what they pay for and the level of convenience Coinbase offers is unparalleled.
Frequently Asked Questions about Coinbase
Is Coinbase properly insured?
Yes, Coinbase is insured by the Federal Deposit Insurance Corporation. Wallets are covered up to a maximum of $250,000 is losses for American residents. Unfortunately, this insurance doesn’t cover customers in countries outside of the United States. The good news is that as a company, Coinbase holds less than 2% of its assets online. The other 98% is in cold storage wallets.
How do customers withdraw money from Coinbase?
Customers can withdraw from Coinbase in three ways:
- To a bank account
- To another cryptocurrency wallet, assuming the withdrawal is in crypto and not fiat
- To a PayPal account
There is no way to withdraw a balance to a credit or debit card.
How long does withdrawing from Coinbase take?
Withdrawals from Coinbase take about as long as it takes for a blockchain to confirm a transaction. That’s if a customer is just transferring crypto from one wallet to another. Fiat transfers happen instantly, but banks typically take anywhere from 3-5 business days to process a transfer. That’s not a reflection on Coinbase.
Is it safe to buy coins on Coinbase and keep them on the platform?
There likely isn’t a single exchange better than Coinbase when it comes to making buying cryptocurrency easy. However, it’s never recommended to keep coins online, regardless of the security options available. Although the crypto industry is 11 years old now, hacks are still a dime a dozen, and they cost customers millions of dollars.
Should You Use Coinbase?
The answer to this question is a resounding yes! All cryptocurrency exchanges struggle with two things. Customer support and security. Though it’s not exactly setting the world on fire in these categories, Coinbase is the best. The entire industry needs to improve in both categories. But realistically, the most secure exchanges make trades using smart contracts and the average crypto enthusiast still doesn’t know how to complete transactions that way.
Hands down Coinbase wins the race as far as ease of use, brand recognition and the ability to facilitate instant transactions, getting customers into the market right away. For that reason, Coinbase ranks among the top crypto exchanges out there today!