Coinbase is one of the world’s most well-known and leading cryptocurrency exchanges based in the U.S. Popular for its user-friendly platform, Coinbase achieved a huge milestone when it became a publicly listed institution, making it the first cryptocurrency exchange to do so.
With over 73 million verified users and $255 billion in crypto assets, the Coinbase ordering system is simple, and moreover the Coinbase Pro platform sports a variety of features, making it easy to explore for both novice and experienced traders.
Coinbase has relentlessly pursued regulatory and law enforcement compliance, a huge plus point in an industry that is in critical need of regulatory guidelines. Coinbase has therefore established itself as a safe zone among numerous other cryptocurrency exchanges.
Coinbase Pros
Let’s take a look at what actually sets Coinbase apart from other cryptocurrency exchanges and attract customers from the U.S.
1. User Interface
Coinbase sports a very beginner-friendly user interface. The exchange’s UI has a simple design, and you can learn very quickly how to buy, sell, send, and receive cryptocurrency on their website or mobile app.
Users truly adore the Coinbase iOS and Android apps, which include many of the similar functions and features as its desktop version. The ratings of these apps speak for themselves.
2. Selection
You can count on Coinbase for the vast number of crypto coins it supports. The exchange has a collection of over 100 crypto tokens and yeah, you read that right. And we don’t think the exchange has any plans to stop on that number. Let’s look at a few of the most popular coins listed on the exchange.
- Bitcoin(BTC)
- Ethereum(ETH)
- Dogecoin(DOGE)
- Polkadot(DOT)
- Litecoin(LTC)
- Aave(AAVE)
- Shiba Inu(SHIB)
- Cardano(ADA)
- Bitcoin Cash(BCH)
- Solana(SOL)
3. Security
Customers should feel confident in the security level of the crypto exchange they choose to ensure that their crypto-assets do not end up in the wrong hands.
Coinbase uses stringent identity verification procedures, as well as tracking and monitoring crypto-assets sent to and from its site, to comply with KYC and AML regulations.
2-step authentication(2FA), biometric logins, and data encryption are some examples of security measures that Coinbase enables.
It keeps at least 98 percent of its users’ assets in cold storage, which means they are kept on an offline device. For its website, it employs bank-level encryption and security.
4. Insurance
Insurance is one of the top benefits that you get when signing up with Coinbase.
Coinbase offers an insurance policy to its users for a portion of the digital assets stored in their storage systems. The cash balances in the exchange have FDIC insurance of up to $250,000 per user.
The insurance does not cover any losses caused by illegal access to your Coinbase or Coinbase Pro account if someone breached the login credentials. It’s your obligation to keep a strong password and maintain your login details so it’s not prone to attacks.
5. Wallet
The Coinbase wallet is completely free to use. It is available for Android and iOS users to download from the Google Play Store and the Apple App Store, respectively.
Transactions between Coinbase wallets are free, whereas network charges apply to transactions involving other wallets.
The Coinbase wallet uses Secure Enclave Technology to protect user keys. When someone tries to access their wallets via another device, Coinbase verifies the device and notifies the user. Coinbase stores a large portion of its users’ funds offline in hardware wallets and vaults to further protect user funds.
6. Debit Card
The Coinbase Card is a Visa-branded debit card that is linked to the account balance of users. It allows you to instantly spend crypto at any merchant that accepts Visa anywhere in the world.
Coinbase began allowing its users to buy cryptocurrency with linked debit cards to Google Pay and Apple Pay last year. It also launched Real-Time Payments, which would allow its US customers with linked bank accounts to cash out up to $100,000 per transaction instantly and securely.
Recently they upped their game by announcing that users can perform purchases on the exchange’s upcoming NFT marketplace using Mastercard credit and debit cards. Coinbase executives stated that by partnering with Mastercard, they hope to reduce friction in the NFT purchasing process.
7. Regulators
Coinbase has engaged in building relationships with regulators and obtaining vital licenses, such as the BitLicense from the New York Department of Financial Services, since the exchange’s inception.
To compete with Coinbase, any potential competitor must go through a slew of legal hurdles. Moreover, regulatory benefits carry risks because policies change and institutions, and processes can be hard to persuade.
8. Education
Coinbase Learn Hub enables users to conduct research and learn about cryptocurrency-related topics.
It provides information on various types of crypto assets and investment methods. More sources are provided to users if they want to delve deeper into the topic.
In addition to the educational tools already available on Coinbase, the exchange launched some new tools that will allow users to easily share information about their holdings with their own private network by tapping the Share button in the Coinbase app.
The Share button is available on all asset and portfolio pages.
9. Earn
Users can earn free cryptocurrencies by learning about newer digital assets on Coinbase. Customers must watch videos on various cryptocurrencies and take quizzes in order to collect the free crypto.
The exchange adds new crypto coins every day in the Coinbase Earn program. The crypto you earn for completing a task is determined by the coin’s USD spot price at the time of earning.
While the total number of tokens you’ve earned remains constant, the dollar value may fluctuate as the crypto’s price changes.
Users can obtain more cryptocurrency on Coinbase Earn by inviting others to the program using a referral link, but they should utilize that link and accept the invitation.
10. Coinbase Pro
Global Digital Asset Exchange (GDAX), later rebranded as Coinbase Pro, is used by active traders who are familiar with crypto investments to take advantage of various trading types.
The Coinbase Pro platform is simple to use, allowing beginners to quickly become acquainted with the terminology and begin investing. Its user-friendly application includes real-time charting tools. In addition, you can view your trade history and price charts.
The pro version is accessible and usable by anyone with a Coinbase account. It provides more trade types, most notably limits and stops orders, which are not available on the main Coinbase platform.
The Coinbase Pro fee structure is made up of taker and maker fees. If your account balance is less than $10,000, you may be charged a 0.50% taker fee. If you have more than $500 million, you will only have to pay 0.04%.
11. Coinbase Prime
Coinbase launched the Coinbase Prime platform last September for institutional investors.
Coinbase Prime provides a number of advanced features that are not normally available to small investors.
Institutional users can use commerce services, cold storage, and an Asset Hub, which enables the investors to develop their products on the Prime platform.
Prime feature includes smart order routing through which users can gain access to multiple other crypto platforms instead of simply relying on Coinbase’s exchange price levels. This technology will route your order instantaneously to the supported exchange with the best prices.
12. TAX Center
Coinbase launched a tax center for its users, which displays all of their taxable activity in one place.
Previously, cryptocurrency owners had to manually calculate how much they earned and the tax rate that applied to their profits, so the tax center is a boon as they get to know how much tax they owe to the IRS with ease.
With this new tax center feature, users can get to know their short term and long term gains/losses, along with their miscellaneous income.
Users who utilize Coinbase Pro or have conducted transactions using an external wallet can obtain free crypto tax reports upto 3000 transactions from CoinTracker.
Coinbase noted in their blog post, “Customers can use these amounts to prepare and file their taxes either with their personal accountants or directly with tax prep software like TurboTax,” said the company in a blog post announcing the tax center.”
Coinbase Cons
1. Fees
High trading fees are one of the biggest cons of Coinbase. The fee structure as a whole can get pretty confusing for beginners especially.
Coinbase charges 0.5 percent fees on crypto sales and purchases and the rates may vary depending on market fluctuations.
Coinbase also charges either a flat fee or a variable fee based on the amount purchased and the payment method used.
For example, it’s 3.99% for credit card purchases, 1.49% for Coinbase wallet or bank account purchases, and $10 for deposit and $25 for withdrawal in wire transfers.
Because cryptocurrency prices fluctuate frequently, this can be beneficial to users.
2. Customer Assistance
This is one of the areas where Coinbase lacks, tainting the reputation of such a leading crypto exchange. Customer assistance is something the crypto exchange definitely should work on, as a lot of user feedback indicates poor customer service and little assistance in traversing scams, locked accounts, etc.
About 11,000 complaints were filed with the Federal Trade Commission, and many previous customers claim they were left with little to no support after losing funds due to compromised accounts.
We really hope they improve in this department because customer satisfaction is the most important for any kind of institution.
Other Crypto Exchanges
1. Binance U.S.
Binance U.S. has cheaper rates than Coinbase, and the same is true for Binance. It also provides advanced trading options to its customers.
Both exchanges provide the best security measures to their users, but Binance US is not as forthcoming about its security measures beyond login protection.
Binance U.S. Exchange, like Coinbase, uses cold storage, but has not been open and transparent about where or how user funds are preserved.
2. Kraken
Kraken excels Coinbase in terms of low fees rate, high trading options, and supports flat purchasing fees, a great advantage for low-volume traders.
But only a few options in the Kraken exchange are available to the users in the U.S. The not so friendly user interface is a huge disadvantage when it comes to attracting beginners exploring the industry.
3. Gemini
Gemini offers public API keys that can be used to connect other software tools, making it an ideal choice for fund managers and other institutional traders.
With the Gemini Pay option users can pay for purchases with the crypto stored in the Gemini account.
The fees rate is higher in Gemini and the exchange is only available in 61 countries with few trading pairs enabled. Coinbase in comparison is available in more than 100 countries and offers more altcoins than Gemini does.
4. FTX U.S.
FTX U.S. focuses on standard crypto trading and has a low fees rate which is a plus point. It supports less crypto coins unlike Coinbase.
It also offers limited options unlike its parent company FTX which offers better trading options.
But both FTX and FTX U.S. supports TRON coin(TRX) which is one of the coins still not listed on Coinbase unfortunately.
5. Etoro
Etoro is ideal for active traders due to its low fee structure. It has one-of-a-kind copy trading feature that allows users to mimic the trades of top-performing traders.
Residents of the United States can only trade cryptocurrency on eToro, but international traders can invest in exchange-traded funds (ETFs), commodities, etc. The exchange is only available in 44 states across the United States.
Conclusion
Coinbase is regarded as one of the best cryptocurrency exchanges in the United States and why not.
For example, the Coinbase user-interface is simple and easy to use, it has listed over a 100 crypto coins, you can get educated about the cryptocurrency industry and earn money simultaneously, etc.
The fee rate can be an issue unless you use the more enhanced Coinbase Pro which also offers numerous trading options .
Overall, we can say that American users are naturally drawn to Coinbase for a variety of valid reasons, and the exchange backs that up by providing so many benefits to its customers.
Also Read: Comparison Between Crypto Exchanges: Coinbase vs Binance vs Bitfinex
