As cryptocurrencies are coming to arise, companies that provide services for its trade have been popping up rapidly. One such company that facilitates the trade of cryptocurrencies around the world is Coinbase. What is Coinbase? What are the trading limits? Is it safe? These are some of the questions which have been answered in this Coinbase review.
What is Coinbase?
Coinbase is a secure online platform that facilitates the buying, selling, transferring, and storing of digital currency.
Based in San Francisco, California, Coinbase serves customers in over 30 regions around the globe. It has no become one of the leading global brands to help people convert digital currency into and out of their local currency.
Coinbase provides a free platform to send or receive digital currency between online wallets, friends, or merchants.
Coinbase states that it offers a wallet, an exchange, and merchant tools within one simple interface. The trade of cryptocurrencies can be done by connecting the bank account, credit card, or debit card of the users to their Coinbase account.
The purchase is same as the when someone would buy something from another online store such as Amazon.
Coinbase can also help users sell their cryptocurrency by converting a chosen amount of crypto coins to U.S. dollars at the current value and eventually transferring it to the bank accounts it is connected with.
At present buying cryptocurrencies on Coinbase mostly open to many regions but selling is unavailable to users in Australia and Canada.
It also facilitates businesses by accepting Bitcoin payments from its customers and clients. At present Coinbase supports Bitcoin, Litecoin, and Ethereum and Bitcoin Cash.
It will support a variety of unspecified new cryptocurrencies in the future. iOS and Android mobile devices and tablets support the official Coinbase app.
Buy and sell functionality are supported by both. Windows do not support Coinbase app, however, the website can be accessed via a web browser on all mobile devices.
Coinbase Review – It’s a safe way to buy, sell, and store bitcoins?
The safety of Coinbase has been a growing issue for a long time now. Coinbase is known to be one of the safest and most-trustworthy places to trade cryptocurrency online.
Look at the following aspects which justify that Coinbase is indeed a safe way to trade and store your bitcoins:
Company Profile and Legitimacy
Coinbase is based in the United States, so it has complied with all the U.S. rules and regulations at federal and state level. Some of the laws, regulations, and regulatory bodies that Coinbase complies with is given below:
- Coinbase is registered with FinCEN as a Money Services Business.
- Complies with the rules of Bank Secrecy Act.
- Complies with the rules of USA Patriot Act.
- Complies with laws and regulations of state money transmission.
Coinbase has been doing exceptionally well by complying with these rules and regulations and getting ahead of some of its competitors who have not.
Coinbase does not require a license to operate cryptocurrency business for other countries except the US.
Coinbase also has many trustworthy investors like Alexis Ohanian (Reddit Co-Founder), Bank Of Tokyo, Blockchain Capital, and Digital Currency Group backing the company. Coinbase generally has financial backing from well-established companies such as Mitsubishi UFJ Financial Group.
Safe Keeping of Funds
Coinbase separates customer funds from company operational funds and holds it in custodial bank accounts. Simply, it means that your funds will not be used to operate and run their business.
So in the larger sense, they have stated that Coinbase or its creditors cannot claim the funds of the customers held in the custodial account, even if the company becomes insolvent. It means, in the case of insolvency, the customers will get their funds back.
Coinbase has stated that 98% of its customers’ cryptocurrency funds are stored in a secure offline cold storage. This means that the funds are less likely to be stolen online.
The cryptocurrency funds are stored in multiple hardware wallets and paper wallets which are then stored in vaults and safety deposit boxes. Thus, customer’s funds can neither be stolen, lost, nor hacked.
The remaining portion i.e. 2% of cryptocurrency stored online, is insured fully by a syndicate of Lloyd’s of London. Up to a maximum of $250000 of the US residents using Coinbase’s USD wallet is covered by FDIC insurance.
However, customers of Coinbase are still liable if their personal accounts are compromised. Thus it is advised that you store your cryptocurrencies in an offline cold storage wallet which you can control.
Personal Account Security
Different features are offered by Coinbase so that the users can secure their personal accounts. It is highly recommended that you use a secure and unique password.
Multiple 2-factor authentication (2FA) methods help you to secure your account. It can be done through SMS text or a third party 2FA app.
The options for this include Google Authenticator and Authy. You have the control to track the activity of your account and get notified if a new device or IP address tries to access your account.
Coinbase Pricing & Fees
Virtual Currency Transfer Fees
No fee is charged to use Hosted Digital Currency Wallet service. However, network transaction fees may be incurred when the transfers of virtual currency to an address of the Coinbase platform is made.
Network transaction fees such as bitcoin miner’s fees are passed through to you by Coinbase. Coinbase notifies you of any such transfer fees at the time of the transaction.
The exchange rate for trading digital currency through the Conversion Service is calculated as the market rate of the cryptocurrency on Coinbase’s GDAX.
It also includes a spread between 0 to 200 basis points which are determined by the size of the transaction being made, market volatility and length of time using Coinbase (“Exchange Rate”).
There might be cases when the market rate from GDAX may not be available due to outages or scheduled maintenance. So, for uninterrupted services such instances, Coinbase may derive market pricing data from digital currency exchanges which are unaffiliated.
There is a spread exceeding 100 basis points in the exchange rates quoted in such cases. Before you complete your transaction, the final exchange rate will be quoted to the customer.
Coinbase may charge Conversion Fees while using the Conversion Service. These services may vary based on your location, payment method, and other circumstances. Coinbase may also charge an additional fee on transfers to and from your bank account.
Coinbase will notify you of the Conversion Fees and any other service fees that apply to each transaction in the aggregate, in two instances:
1. Immediately before you confirm each transaction.
2. In the receipt issued to you immediately after each transaction has processed.
The Conversion Fees you pay is calculated by one of two methods:
- Method 1:
The greater of:
1. Minimum fee: It is a flat fee which applies to conversion transactions under $200. It is disclosed before you execute the transaction.
2. Percentage fee: It is a variable fee determined by region, product feature and payment type.
- Method 2:
– Percentage fee: 1% variable fee based on the amount of the transaction made. A minimum fee of $1.00 and a maximum fee of $50 Variable Fee is included. As per the region, product feature and payment type, a fixed rate percentage of 2.49% fixed fee are added.
Related: How to Convert Bitcoin into Cash?
Coinbase Buying/Selling Limits
The user location, payment method, and verification status all determine the buying and selling limits. Your account’s limits page will show the trading limits. A verified U.S. customer will get the following weekly limits:
- $5,000 Buy through Bank Account.
- $50 Buy through Credit/Debit Card
- $50,000 Sell
If you are not satisfied by those limits, you can apply for higher limits. However, the limits set for instant purchases, like credit card purchases, will not be increased.
If a payment method has not amassed huge trading volume or is brand new, then Coinbase will adjust your limits to reflect this.
Over time, these limits will increase automatically when you collect successful trade volume. Over the course of one week, your limits will gradually be refilled from the time your order is confirmed.
Coinbase Payment Methods
The Payment methods for US customers:
1. Instant Verification
Many banks can be instantly linked after you provide your banking username and password as requested.
Depending on your bank’s security procedures additional security questions must be answered. After the process is completed your bank account will be linked and ready to use.
2. Deposit verification
To use a deposit verification process, select ‘Other Bank’. Around 2-3 business days will be taken to complete the process.
You must enter your bank’s routing number, your account number, name on the account, and the type of account that is about to be linked. You can then verify the account by clicking ‘verify’ button on the Linked Account page.
Coinbase supports the use of Visa and Mastercard for buying Coinbase. However, prepaid and other cards are not supported without associated billing address. Go to the Link a New Account dialog and:
- Provide card information.
- On your card, two small debts will be applied.
- Check your card online banking statement.
- Enter “cent” portion of the amount and complete verification.
- Make a purchase by selecting your card on the payment methods menu on the Buy page.
Bank Wire transfer
Withdrawal and deposits can be made using wire transfer.
- Click Accounts tab.
- Choose USD Wallet.
- Click on Deposit button.
- Select Wire Transfer from Pay in Method menu.
- Start Wire transfer denominated in USD from a bank account.
- Select the USD wallet which is on the left side menu of the Account page.
- Select the Withdraw button.
- Select bank wire for the To field.
- Confirm the amount and enter the Withdraw tab.
Similarly, there are various methods of payment for a different region like:
For European customers, deposits and withdrawal can be done with a bank account and debit cards can be used to make a purchase.
The UK customers can deposit and withdraw using a bank account, or can make a purchase using credit or debit card.
Australian customers can make a purchase using credit or debit card and will not have to pre-fund your account to place an order. The purchases are also completed instantly.
Singapore customers can make a purchase using bank transfer through the third party, or use credit or debit card.
Canadian customers can make a purchase of digital currency only by using a debit card. This purchase will be instantly credited to your account.
Check also: How to Find A Bitcoin ATM Near Me?
Coinbase Review – Pros and Cons
Some of the pros of Coinbase are:
- There are certain buying limits and it has high liquidity.
- It is easier for new users to buy bitcoin.
- A credit card can act as a backup for instant purchase.
- There are numerous fiat deposit and withdrawal options.
- Protected Bitcoin deposit.
- Provides online and mobile wallet services.
- To prevent hacking, and unauthorized manipulation of funds it provides 2FA and multi-signature security option.
- There are instant transfers between Coinbase users.
- The user interface is friendly.
Some of the cons of Coinbase are:
- There aren’t many payment methods.
- It can track how the users spend bitcoin.
- The Coinbase accounts are monitored so there isn’t anonymity.
- The customer support is slow.
- Deposits and withdrawal of funds can be delayed up to three days.
- It does not support many cryptocurrencies.
- There might be high risk while trading vast sums of money since Coinbase can wrongly freeze your account.
Here is the list of Coinbase Alternatives for Buying & Selling Bitcoin
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