If you have kept up with the news, then you have probably heard about the newest hot commodity in the trading market; cryptocurrency. The first of its kind is Bitcoin, which was introduced in 2009, caused the market to explode when it reached new heights in 2017. The sudden surge in its price allowed many investors to enjoy huge returns, which granted it huge worldwide exposure. People’s fortunes changed within minutes and so cryptocurrencies became immensely popular. Since then, thousands of cryptocurrencies have been developed and are now being traded by people all around the globe.
As the investment and interest in cryptocurrencies exploded considerably, the requirement for secure and safe exchanges that can facilitate the purchase of these digital currencies has become of the utmost importance. While a number of exchanges have surfaced, not all of them are reliable as they have been prone to security and other cyber-security threats. However, one of the most popular exchanges that you will find nowadays is none other than Coinbase. It was founded in 2012 in San Francisco and is currently operational in more than 32 countries around the world.
Coinbase has served more than 12 million customers all over the world and has enabled them to exchange digital currencies in $40 billion. From its launch in 2012 till 2013, Coinbase became the largest cryptocurrency exchange in the world and the Bitcoin startup with the highest funding. The best part about Coinbase is that it is a lot faster than the other cryptocurrency exchanges out there. This is mostly because unlike the others which require people to trade on the market, Coinbase enables its users to buy their cryptocurrency at a set price, which is calculated in accordance with their market value.
Furthermore, Coinbase is also one of the handful of cryptocurrency exchanges in the market that enable traders to use their credit cards, along with bank transfers.
Fees
Depending on the payment method you choose to use, the fees charged by Coinbase is between the range of 1.49% and 3.99%. The fees associated with credit card transactions is on the higher side. Nevertheless, the fees charged by Coinbase is on the lower end of the scale as compared to their competitors using a similar business model, like CEX or Coinmama.
Currently, users can only purchase Bitcoin, Litecoin and Ethereum when they decide to use Coinbase, but the exchange does have plans to add more cryptocurrencies to its platform. As far as the ‘hard forks’ of cryptocurrencies are concerned like Bitcoin Gold and Bitcoin Cash, the exchange has stated that they will only do so when they get some form of guarantee in regard to security.
Account Setup
When you decide to purchase cryptocurrency via Coinbase, you will first need to open an account with them. For creating an account on the exchange, you will need your name, email address and password. When you enter these details, you will be required to confirm your email address. After the procedure is complete, you will once again be redirected to the startup page. This is where you need to decide whether you want to open an individual or business account.
The next step requires you to verify the phone number you have entered. The purpose of doing so is to take advantage of 2-factor identification for maintaining the security of your account. There are other 2-factor authentication methods that you can use. Moving on, you have to select the payment method and the choice is between credit card and bank transfer. In the case of bank transfers, Coinbase will set up a couple of small transactions from your account for verifying it.
In the case of credit cards, you have to provide a screenshot of the credit card to be used. It takes 3 to 4 days for bank transfers to complete in the US whereas SEPA transfers in the EU take 1 to 3 days. Debit and credit transactions are processed instantly. Coinbase also gives its users the option of adding their PayPal account, but it can only be used for dealing with proceeds you get when you sell cryptocurrency.
Once you have funded your account on Coinbase, you are ready to buy the cryptocurrency you are interested in. You need to open the right tab of your account in order to buy the cryptocurrency. Before the transaction is confirmed, you will be provided with details about the service fee and the cryptocurrency you are buying in the transaction. After you have confirmed the transaction, your purchase will be credited to the relevant Coinbase wallet.
Safety
Newcomers to the platform are still under the misconception that it is still risky to put their money in cryptocurrency. It is true that cryptocurrency exchanges, such as Mt. Gox, ave had their problems, you don’t have to worry about Coinbase. This is due to the fact that it is one of the most secure exchanges that you can find these days. First and foremost, Coinbase is based in the United States, which means that it has to comply with both State and Federal law. In contrast, some of its competitors operate in countries regulations are considerably lighter.
Coinbase has involved itself in discussions with regulators because it aims to provide its users with an innovative and open financial system. Therefore, the regulation of this cryptocurrency seems to have restored market confidence. Furthermore, the exchange has also received investment from some renowned organizations, such as BBVA and Bank of Tokyo and this has worked wonders for establishing its legitimacy.
When it comes to storage of cryptocurrency, Coinbase has stated that they store 98% of their customers’ cryptocurrency funds offline, through paper wallets and hardware wallets, which are stored in safety deposit boxes and vaults worldwide. Moreover, Coinbase has stated that the remaining cryptocurrency, which they store online is fully insured and if there is a hack, the insurance policy will provide customers with their lost funds.
As aforementioned, a 2-factor authentication method is available, which you can use through your phone or SMS or even through third party apps. As part of their security measures, Coinbase also alerts users if a new IP address or device makes any attempt to access their account. Even if despite these measures, the customers’ accounts are compromised, Coinbase will not accept liability for any lost funds. Therefore, it is recommended that once you have bought any cryptocurrency through Coinbase, you should move it into an offline wallet that’s in your control.
Customer Support
When it comes to catering to their customers, Coinbase provides support through email and they have also developed an FAQ and Knowledge Base page for their clients. It is essential to remember that their wait times for a response may vary because there has been an increase in demand in the recent months. Regardless, they aim to provide a response as quickly as possible and to ensure it is authentic.
Supported Countries
Coinbase provides its services in a number of countries around the world. You can benefit from its services if you are in Australia, Jersey, Spain, United Kingdom, Italy, Latvia, Czech Republic, Finland, San Marino, Canada, Switzerland, Hungary, Belgium, Austria, Malta, Slovenia, Norway, Lichtenstein, Croatia, Poland, Singapore, Ireland, Slovakia, Monaco, Netherlands, Denmark, Greece, Portugal and the United States amongst others.
Transaction Limits
In the case of transaction limits, they will differ by country and the variations may also occur as a result of verification status and payment methods. You can check your limits through the limit page of your account. Coinbase also gives its users the option of applying for higher limits, but these limits do not generally apply to credit card transactions.
If you are really interested in applying for higher limits, you will first have to verify your identity. Once you are fully verified and are a resident of the US, you will be able to conduct transactions of about $50,000 every week. In the case of European customers, they will be able to conduct transactions of $30,000 via their account.
Cryptocurrency Transaction
Storing, sending and receiving cryptocurrency via Coinbase is quite easy. You have to go to the Send tab of your account, select the wallet from which you wish to send your coins, enter the quantity and also the public key of the recipient’s address and then hit send. For receiving cryptocurrency, you need to go to the Accounts tab, select the wallet where you want the funds to go and enter Receive. After you have clicked receive, you will be given your wallet’s account address and the sender can use it for transferring the cryptocurrency to your account.
Coinbase Pro
Coinbase decided to rebrand itself in 2015 in which it separated the exchange element of the company and named in GDAX. It was renamed again in 2018 to Coinbase Pro and the purpose was to separate the ‘trading’ element of the exchange from the more consumer-centric casual platform. When you opt to use Coinbase Pro for your buying and trading platform, you can avoid the fee because you can simply send the bank transfer to Coinbase and then make your purchase through Coinbase Pro.
This is due to the fact that all customers of Coinbase will automatically have an account on Coinbase Pro as well. You can use the same credentials for logging in. Advanced traders will find Coinbase Pro more appealing because they are interested in knowing a lot more than the simple market fluctuations that occur in cryptocurrency pairs. There are trade histories, real-time order books and also charting tools. Simultaneously, Coinbase Pro has a more intuitive interface, which enables traders to start using the platform immediately.
Coinbase Card
Coinbase announced its own Card, which allows the customers based in the United Kingdom to spend their cryptocurrencies both online and in-store. Any location that’s integrated with the Visa network is suitable for using the card, which means it can be used in millions of locations all around the world. Thus, holders of this card will be able to make payments through contactless PIN and CHIP technology. Plus, they will also be able to make cash withdrawals from all supported ATMs. The Coinbase Card serves as the first debit card that can be linked directly with a top cryptocurrency exchange in the European Union and the United Kingdom. Currently, this card facility is available in the UK and support for other European countries is to be introduced soon.
Security
The protection of customer data is a priority for Coinbase and so it has implemented a number of security protocols for safeguarding all sensitive information. For instance, OAuth tokens and passwords are stored on their servers using the AES-256 encryption and all traffic goes through SSL to prevent third parties from monitoring the connections. In addition, Coinbase and all its partners hold all personal data securely and follow all the applicable laws, which include the Data Protection Act 2018 and also the General Data Protection regulation.
Furthermore, PaySafe Financial Services Limited has issued and fully regulated the Coinbase Card, which in turn is authorized and regulated by the Financial Conduct Authority (FCA). Currently, cards take anywhere between 5 to 7 business days to arrive once they are ordered.
Conclusion
There may have been some ups and downs experienced by Coinbase over the years, but it has managed to become an easy-to-use and practical service for customers when they wish to buy and sell cryptocurrency. Nonetheless, no matter how secure an exchange might be, it is still recommended that any cryptocurrency that’s purchased should be transferred to personal wallets so you can have full control over your purchases. Coinbase has also developed its own wallet app for its customers.
As a whole, it is a reliable and good platform for users when they want to enter the world of cryptocurrency and they are able to dip their toes in it without worrying about security. The exchange continues to grow rapidly and is one of the easiest and safest way for people to get involved in the world of cryptocurrency.
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