You have likely heard the name floating around: Coinbase. But, what exactly is it? And what does it mean in the world of crypto?
In its simplest terms, Coinbase is an application that can be added to a smart device, such as a phone, desktop, or laptop. It is an exchange for different forms of crypto. It is way more than a basic wallet.
Originally started in 2012 to support Bitcoin, the exchange now allows for the buying, selling, and trading of over 90 types of crypto. With over 89 million verified users in over 100 countries, it is no wonder so many are asking, what is Coinbase?
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Basic Features of Coinbase
Some of the most basic processes Coinbase is well known for is for making transactions in the crypto market. This exchange can be a space to exchange crypto you already own, own a self-hosted crypto wallet, or buy, sell or earn cryptocurrency. Additionally, the exchange will also allow individual users to borrow funds, using Bitcoin as collateral.
In essence, Coinbase is its own unique ecosystem for cryptocurrency, far beyond a basic crypto wallet, with a trusted and lasting name brand that can put some comfort into users participating in what is traditionally a very risky and volatile marketplace.
From learning about NFTs to opening your first digital wallet, one of the biggest perks of the Coinbase system is the Coinbase Support offerings. With step-by-step guides, and beginners instructions, the help center for Coinbase, located at https://help.coinbase.com/en/, is well known for being a great place for new users to enter the marketplace, even for the first time.
Having a library of information standing by to offer such support makes it easier for those new to the market to enter, but also creates an educated and confident network of users. Many reviews list Coinbase as the best place for beginners to start since it offers such stellar support systems already in place with its platform.
From helping you to verify accounts, to starting a wallet, to walking you through how to report tax information, there is a vast library at users’ fingertips via the Coinbase support page.
Another feature many users rave about when checking out Coinbase is its friendly user interface. Again making it welcoming to even the newest of users, Coinbase will present information in a clear and understandable way.
From charts showing the latest trends in crypto prices to the various components of your own, personal portfolio, this application allows traders at any expertise level to understand the exchange in an intelligent way.
A question that often comes to mind, no matter what stage of the crypto world you are currently in, is that of safety. Is your information safe on Coinbase? Will the company disappear in the blink of an eye?
While there is nothing certain in the world, the longer history of Coinbase gives the company stability others just starting out may not experience. The company also offers two-factor authentication (though it does not presently require its use).
Additionally, Coinbase relies on the Cold Storage of crypto funds. Sources say 98 percent of its holdings are kept offline for added safety.
Coinbase is also compatible with the use of additional wallet safety measures. For example, should Coinbase be hacked, but your wallet is stored elsewhere, say on a hardware crypto wallet, your private information would remain safeguarded, even if the platform is not.
Coupling Coinbase with an additional wallet can be a smart move when it comes to safety, making an extra step to store your funds, but also an extra level of security.
Coinbase: The “Good”
Clearly millions of users across the globe have found value in the use of Coinbase for crypto exchange. There are a variety of perks that come along with the program, such as the ability to earn crypto, as well as the flexibility to work with many forms of currency.
Additionally, users find benefits with Coinbase via:
- Ease of use even for beginners
- Access to CoinbasePro (and lower fees)
- All popular, well-known cryptocurrencies are found here
- Added features such as borrowing and private client options
These features add up to create one of the world’s most trusted exchanges out there. Coinbase also allows for any user to apply, given that they are age 18 or over (in the United States), have an Internet connection with an updated browser, and can verify their identity with a government-issued ID and phone number.
Earn While You Trade
Those using Coinbase enjoy the fact that, through basic and guided exchanges, they can earn yield for doing business with the platform. Its website at https://www.coinbase.com/learning-rewards categorizes different types of crypto that are offering earning potentials, attracting many new users to sell on the Coinbase platform.
Who doesn’t want more crypto?
Those worried about the fees on the general application exchange can find comfort in the Coinbase Pro account option. Here, for more active traders that are operating on the marketplace frequently, there are unique fee structures that allow for a lower cost of doing business.
Additionally, the Pro account offers the use of analysis tools that the basic edition does not feature. Both websites will allow for the buying and selling of various cryptocurrency types to and from an account, but the Pro account offers over 250 different acceptable brands (while the basic model supports around 107 at the time of publication).
Features such as the ability to withdraw, trade, stop order, time in force order, and limit orders are also included in the Pro account, too. In other words, there are more ways to do business in the crypto market.
Is Pro For You?
Depending on your unique needs, the Pro account may be an option that makes sense for you. If you are seeking a space to purchase crypto and leave it in your account (i.e. you simply plan to store your investment), a basic account may make the most sense.
However, if you are aiming to become the next Wolf of Wall Street, crypto style, you may need the ability to do much more than a store, buy, sell, receive, and exchange, which the Pro account can bring you.
Another plus for the exchange is a tech that most all cryptocurrency applications take advantage of, which is the use of blockchain technology.
The concept of crypto relies on this pillar to exist. In short, the tech is a distributed ledger. It is a series of recorded transactions that cannot be altered.
Not only does the blockchain exist to secure and record transactions, but it is also a long history showing all the comings and goings of a cryptocurrency. For example, the Bitcoin blockchain could show you every single time the coin was bought, sold, or moved.
Coinbase is just one such app that takes this tech and creates a living, breathing exchange used by millions on a daily basis.
Coinbase: The “Bad”
Nothing in the world is perfect, and of course, with the good must come the bad. Some of the imperfections that have been noted by Coinbase users include:
- High transaction fees
- A complex fee structure
- Limited altcoin access
While some of these hurdles were cleared by the creation of the aforementioned Pro edition, there are still some challenges faced by Coinbase users.
It is not shocking that many complaints in the Coinbase community revolve around the fee structures. When investing especially, no user wants to be hit with major costs of doing business.
Again, the addition of the Coinbase Pro account allowed for unlimited trades, where the original depended largely on the method in which you paid for your crypto, not to mention the geographical region in which you did so.
Some confusion exists on the fees in general because Coinbase varies its fees depending on how much is being bought or sold. For example, for trades valuing $10 or less, the fee is only $0.99. However, as the value goes up, so too does the cost:
Trade Size Coinbase Fee
$10 or less $0.99
$10 to $25 $1.49
$25 to $50 $1.99
$50 to $200 $2.99
To further complicate the process, there is a change after the $201 mark. There, Coinbase begins a percent-based fee on accounts involved. This fluctuating amount frustrates many users, who are easily confused as the amount is not set after $200 (i.e. many common trade value amounts).
How You Pay
Instead, the cost from there relies on how the transaction is being done. For example, crypto purchased with a U.S. Bank account or a USD Coin Wallet is charged a rate of 1.49 percent. However, if you opt to conduct the transaction with a debit card, the charge goes up to 3.99 percent.
Users are often frustrated to find out that how they access a bank account (i.e. through verified account numbers or the ease of a debit card number) can have such a massive impact on earnings.
Small Amounts: Big Fees
While many users enjoy the option of breaking down purchases into small amounts, the cost to do business like that can really add up quickly. If one in every $10 you are exchanging is lost, you can see how there is an expense many users are not prepared to pay.
Coinbase: The “Ugly?”
While fees can be the true Achilles’ heel of any exchange, it is at least understand that there is always a cost of doing business. Where Coinbase can sometimes fall short in reviews by the pros is in its tech desk assistance.
Help When You Need It Most
While the previously noted support pages in Coinbase offer a vast library of information, not to mention informative newsletters and friendly user interfaces chock full of data, the one place users may need help the most has been lacking.
Many users report that in the event of serious hacking, loss of funds, or technical difficulties, it is nearly impossible to reach a helping hand. While they boast stellar support on the guide side and an understandable interface for new users, it is the big need that may leave Coinbase users wanting more.
Coinbase: The Future?
No one knows for sure the future of the crypto industry. But, one thing is for sure, with millions of owners using the platform, the company is not going anywhere anytime soon. Whether you aim for a simple wallet app to store your crypto, or a varied exchange offering a variety of crypto options, Coinbase has options and appeals to the masses.
Hurdles such as crypto loss support and fee structure challenges may hinder Coinbase’s growth, but there is a lot to like with this exchange.
No matter what direction the exchange may take, there is one thing for sure: you will need to keep yourself informed. This is an ever-changing industry still in its very early stages. Stay up to date on all things crypto, from which wallet makes the most sense to how to store your earnings, FLOLiO has your back with helpful resources to support your decision-making process.