Coinbase is one of the world’s most popular exchanges. In operation since 2013, it has enjoyed a reputation for being a central hub for cryptocurrency trading and investing, where people can expect reliability, safety, and near constant uptime.
An Introduction to Coinbase
In earlier days, Coinbase was one of the largest exchanges by volume, but has since been overtaken by larger peers. It remains one of the safest places to keep one’s crypto portfolio, however, due to its headquarters in San Francisco and long history of compliance with US regulations.
Traders who want to buy and sell cryptocurrency with fiat money can do so from 32 different countries, and they can keep their fiat safe on the exchange as well. With reasonable fees and a full array of trading platforms, including desktop, mobile, GDAX, and Coinbase Pro, everyone from beginners to veterans are ideal customers. Those buying cryptocurrency from the exchange can choose from bitcoin, Ethereum, Bitcoin Cash, and Litecoin—all legacy cryptocurrencies that have high volume and liquidity.
Getting Started With Coinbase
The process of creating and funding an account is very easy, though in some cases it takes days or more.
Creating a Coinbase Account
To create a basic Coinbase account, just give your first name, last name, email address, and create a password. Once you create the account, you must verify your email address and then your mobile phone number as well. Afterward, it’s optional to quickly set up 2-factor authentication (2FA) using Coinbase’s instructions, which helps bring extra security to exchange accounts. Instead of Google Authenticator, the exchange chooses to use an SMS system that sends verification codes to Coinbase users’ mobile devices.
Depositing Funds to Coinbase
With a verified Coinbase account, you can deposit bitcoin, Ethereum, Bitcoin Cash, and Litecoin to your exchange wallet, and withdraw it to other wallets. Customers who want to buy cryptocurrency with fiat money like dollars, pounds or euros can connect a bank account and do so easily. The exchange will ask for your bank details, which must match the information you already provided, and then send two small deposits to the account listed.
Once you confirm that the correct amounts arrived (which might take up to 3 days), you can then buy cryptocurrency instantly with your bank account. It is then deposited directly to your exchange wallet. It’s also possible to buy cryptocurrency with a credit card, though the daily buy limit is smaller than it is with a connected bank account. In the USA, the credit card and bank daily buy limits are $7,500 and $25,000, respectively.
Customers can also deposit fiat directly and keep it on the exchange for greater access. This feature is called the Coinbase Vault, and it’s meant to give traders more on-demand access to capital. Depositing and withdrawing fiat from the Vault takes around 3-5 days, but like the daily buy limit, this is also dependent on where the customer lives.
Execution and Fees on Coinbase
Traders can buy (deposit) and sell (withdraw) bitcoin directly using the exchange, both of which incur a fee of anywhere from 1.50% to 3.99% depending on where you are. It’s also possible to make market orders on GDAX—Coinbase’s advanced trading platform—but limit orders have no fees involved. Those with an account have automatic access to GDAX and can use it with their Vault and other wallets instantly and without fees. Stop orders are also an option with Coinbase Pro, a beta version update of the GDAX interface that adds some additional depth.
Credit Card Buys: 3.99%
Market Orders: 1.50%
Limit Orders: 0.00%
On GDAX, the main window displays a real-time order book (visualized in two ways), the cryptocurrency’s interactive chart, the buy and sell field, and one’s open and filled orders. Compared to some other exchanges, the GDAX trading interface and tools leave something to be desired, just like it’s limited cryptocurrency selection. Indicators and other charting tools are nonexistent, and many of the more creative order types are missing, as is margin trading.
Security, Support, and Compliance
Security: Another point in Coinbase’s favor is how they store customer funds. Around 98% of customer funds are held in custodial bank accounts, which separates operational capital from their obligation to users. Should the exchange be taken offline for any reason, all customer funds will be safe physically and legally, with Coinbase given no rights to offline storage. The website is fully protected by all kinds of sophisticated DDoS and hacking defenses, and customers are encouraged to protect their own accounts with 2FA. Finally, as a centralized exchange, Coinbase controls all wallet private keys, so coins meant for safekeeping should be sent to a cold wallet.
Support: Coinbase support is good, but not great. It often takes days, at a minimum, to receive an email response from customer service. With issues like abnormally long transfers, this might mean that traders need to sweat it out before getting help.
Compliance: Based in the US, Coinbase is in one of the safest jurisdictions for cryptocurrency and must meet high regulatory standards. This should be very encouraging to customers. It must also differentiate and fall into line with statewide regulations as well, and maintains a transparent, cooperative relationship with federal entities.
Though Coinbase is a relatively basic cryptocurrency exchange, this is intentional. Coinbase’s focus is largely to help cryptocurrency newcomers get fast access to bitcoin and other legacy coins, and then show them some introductory trading tools. However, it excels at this and provides one of the most reliable and secure environments for trading, regardless of the user’s experience level.