What is Coinbase? Features Breakdown in This Coinbase Review

With over 29 million users and a presence in over 100 countries, Coinbase has evolved to be one of the top-level crypto exchanges around the world. The trading interface is famous for its ease of use and swift processing speeds.

The San Francisco-based company has traded over 150 billion USD since its doors have opened. The marketplace possesses immense trading liquidity, platform security, massive traffic, and high trading volumes.

Although it started as a Bitcoin brokerage platform, Coinbase now supports 30+ crypto coins. Additionally, it offers excellent services like the digital wallet as well as the buying and selling of crypto. The following review breaks down the outstanding features of Coinbase.com.

Services Offered on The Trading Platform

What Can You Do with Coinbase? Though Coinbase is predominantly concerned with the buying and selling of cryptocurrency, the interface does more than just that.

Coinbase happens to be one of the most convenient platforms to exchange crypto with crypto and cryptocurrency with fiat money. Coinbase only holds 2% of the total customer funds in their hot wallet to mitigate the risk of losing their customer funds through hacking but keeps the more significant percentage in a cold wallet (offline storage).

Additionally, Coinbase goes a step ahead to insure the money held on their hot wallet to compensate any customers’ loss due to a security breach.

Wallet Services

Coinbase offers a cryptocurrency wallet where users can store their virtual currency on their own devices. Users can use it to transfer or receive cryptocurrencies. The app, available for Android and iOS users, keeps the wallet’s private keys locally on the user’s mobile device. Thus, the users possess absolute control over their virtual wealth.

The wallet can only hold digital assets that the Coinbase platform supports. Loss of assets will occur if the user transfers or receives assets that are not compatible with the wallet. Currently, it supports popular cryptocurrencies like BTC, ETH, LTC, and all the ERC-20 tokens. However, the wallet cannot accept mining rewards paid via Ethereum (ETH) nor Ethereum Classic (ETC).

Though it is possible to send money from a Coinbase account to a smart contract, it’s highly discouraged since the user won’t be able to fulfill the numerous requirements and details assigned to a smart contract transaction.

Brokerage Service

The platform is popular with crypto newbies who are buying their first digital currency. However, the account owners have no control over their deposits since they don’t have a private key nor seed phrase for their accounts.

Cryptocurrency Plugins for Businesses

Coinbase provides a digital currency payment platform for online merchants. Through a select plugin, the business entities’ website can receive crypto payments.

USD Coin (USDC)

Coinbase owns a stable coin-USD Coin-that mimics the value of the US dollar. That is to say, 1 USDC is equivalent to 1 USD. The coin is compatible with the Coinbase wallet or any ERC-20 compatible digital wallet. Coinbase users with verified Level 2 accounts can earn annual interest on the USDC they hold in their wallets.

Borrowing on Coinbase

Coinbase will give USD loans to its users. However, the system locks up an equivalent amount of Bitcoin belonging to the loanee as collateral for the loan. In the event of a defaulted monthly payment, Coinbase deducts part of the locked-up BTC to repay the defaulted installment.

Fees and Commissions

The Coinbase platform levies its users a 0.5% fee for every Crypto “buy” or “sale” transaction. However, the actual fee may rise or fall from that rate due to crypto price shifts on the Coinbase Pro market.

On top of the spread, the system charges a “Coinbase fee.”  To compute the fee, the system compares the applicable flat fee depending on the transaction amount and the applicable variable percentage charge dictated by the geographical location, product characteristics, or payment method. The higher of the two is preferentially adopted as the Coinbase fee.

When the debit card or credit card is used as the payment method, a charge of 3.99% is applicable in any geographical location. You can study the entire variable percentage charge tariff here. Coinbase charges a 2% fee on the gross transaction value of Bitcoin transferred to repay a defaulted installment of the USD loan.

The platform also charges 2% on crypto conversions. The conversions do come with some convenience. A “sell” and “purchase” transaction that usually takes two steps can be completed in a single step if the crypto conversion method is used. Transactions outbound to external platforms incur a “network fee” paid to the entities who validate transactions on those blockchains. Coinbase charges its users an estimated fee.

Buying and Transfer Limits

On the Coinbase platform, a user can buy or sell as little as $2 worth of cryptocurrency. Deposit history, level of verification, and payment type are factors that dictate deposit limits on the interface. Moreover, United States users seeking to deposit more than the set daily deposit limit of $25,000 need to go the extra mile to initiate and finalize a wire transfer to Coinbase.

On the other hand, Coinbase allows a significantly low withdrawal minimum to help users conduct occasional tests on how they can access their account. However, these minimums shift according to exchange rates; they never surpass 0.10USD. There are no restrictions set on the amount of digital currency transferrable to the fiat wallet. Only the withdrawal method used can bear limitations. On Coinbase Commerce, there is no limit on the withdrawal amount, meaning that you can wipe the account clean whenever you want.

Coinbase Referral and Sign-Up Promotions

The Coinbase platform rewards both the referrer and the new account holder when they sign up through the referrer’s link. Read our Coinbase Referral article to get the latest updates or you may use this Coinbase Referral Link to sign-up.

To invite a friend to Coinbase, you first need to copy the invitation link from the referrals page and send it through email or social media. If the friend is from a supported geographical location and completes the account verification process, they qualify to trade.

If the trade is conducted on the Coinbase Pro platform instead of Coinbase.com, the referral code is rendered null and void. If the new account holder trades $100 or more within 180 days of registration, both the new user and the referrer get a $10 bonus each. The reward is paid upon the transaction’s completion, which can take up to four working days.

The standard payout time after transaction completion is 10 minutes. The trade doesn’t have to be a single transaction; the $100 or more transaction could be in smaller tranches. However, using “Coinbase” related search tags to promote the code via paid advertisements is strictly prohibited.

Read more about the Coinbase Referral terms and conditions here.

Supported Currencies

Coinbase supports 46 cryptocurrencies. However, the number of features offered will vary for some cryptocurrencies. The coins do not share the same level of support on the platform. Further, the geographical location of the user also determines the cryptocurrency and transaction features available.

Some users can buy, transfer and receive. Others can only transfer, while a section of other users can only transfer and receive but cannot buy. Popular assets like BTC, ETH, LTC are available in the US, United Kingdom, and Europe without any support restrictions.

In Which Countries Is Coinbase Available?

Coinbase is supported in over 100 countries. Though Coinbase is supported in 18 countries in North America, you can only buy, sell and convert in the United States and Canada. In South America, Coinbase is available in 8 countries. Europe, Asia, and Africa have 41, 20, and 13 supported countries, respectively. Coinbase is also operational in Australia and New Zealand.

Comparison with Other Exchanges

Let’s now conduct a simple comparison of Coinbase with other exchanges of its caliber.

Coinbase Versus Binance

In terms of currency deposits, Coinbase has an edge over Binance. Whereas Binance doesn’t natively support fiat deposits, Coinbase allows fiat transfers from bank accounts to the USD wallet on its platform.

Though both have more than 13 million users, Binance has slightly more users than Coinbase. However, Binance has a higher number of supported cryptocurrencies. Binance has lower fees (0.1%) than Coinbase, whose fees shoot upwards from 1.49%. If you want to sign up with Binance, here’s a Binance referral article to help you. We’ve got a detailed Binance and Coinbase comparison ready for you, check it out here.

Coinbase Versus Kraken

Coinbase has a significantly higher number of users than Kraken. While Coinbase has a user base of 13.3 million, Kraken only has 4 million. Moreover, Coinbase supports more cryptocurrency than Kraken. When it comes to transaction fees, though, Kraken emerges as the winner with 0.26%.

Conclusion

Coinbase is undoubtedly a world-class crypto trading outlet when it comes to its broad cryptocurrency and country support. Moreover, its platform is user-friendly and with reliable security controls. Ensuring its customer funds on the hot wallet is a giant step toward protecting its customer deposits.

However, the platform needs to rethink its unfavorable transaction fee structure. When the spread fee is combined with the “Coinbase fee,” their cumulative transaction fee becomes hard to bear. To remain competitive in the dynamic crypto industry, it may need to adopt a more straightforward and cheaper levying plan.