Disclosure: We are reader-supported. If you buy through links on our site, we may earn a commission. Learn more.
Coinbase is one of the world’s most popular cryptocurrency exchanges. They have been working for years to bring bitcoin and other cryptocurrencies to the mainstream, and have had quite a bit of success at it.
But of course, every exchange has its strengths and weaknesses. In this Coinbase review, we’ll take an in-depth look at everything you may want to know about the crypto exchange. We'll look at the company, their unique offerings, fees, wallet security, buying limits, customer service, and more. Let's dive in!
Founded in 2012, Coinbase is one of the largest, oldest, and most widely used cryptocurrency exchanges in the world.
Current Promo: Earn free Bitcoin with your new account.
Overview
Coinbase.com offers support for purchasing more than 20 cryptocurrencies with fiat currencies in 32 countries, and operates as an exchange in more than 100 countries.
They started out selling only bitcoin, but since then have expanded to support a steadily growing number of the most established cryptocurrencies.
With over 20 million users, Coinbase’s stature is such that even announcing they will support a new cryptocurrency can send its price shooting up. Coinbase has backing from major banks and investment funds like Andresen Horowitz, BBVA, and the New York Stock Exchange.
Features and Services
Coinbase is rapidly turning into the cryptocurrency equivalent of a full service financial institution. Their range of services seems to increase every year.
Coinbase Brokerage
Coinbase started out as a simple website to buy bitcoin. It has since added support for other cryptocurrencies, but being an easy, user-friendly place to buy cryptocurrency is still Coinbase’s main service.
Coinbase Pro
While the normal brokerage is geared towards casual cryptocurrency buyers and investors, Coinbase Pro caters to more serious traders. Fees are lower than with the brokerage service, and there are more tools for technical analysis and trading.
This makes the interface a bit more complicated and difficult to learn than the brokerage services, and is better suited to day traders.
Related: Open an Account with Coinbase.com Today and Get $10 in Bitcoin (Free)
Coinbase Pro
Merchant Services
Coinbase also works with online businesses that want to accept bitcoin or other cryptocurrencies for goods and services. They have created a plugin that integrates with major ecommerce software. Merchants can adjust their settings if they are worried about price fluctuations. In this way, if a user makes a purchase with bitcoin, the shop owner can set it so that some or all of the money is immediately converted to dollars, thus reducing their exposure to price fluctuations.
Wallet
Coinbase offers a mobile wallet which works with both Android and iOS. This wallet allows you to store cryptocurrency on your phone, which means Coinbase does not actually have custody of your funds.
The wallet includes a seed phrase, a string of 12 words, which you can use to recover the wallet if your phone is lost or damaged. If you decide to use it, you need to keep this phrase safe, since anyone who has it can use it to access your wallet.
USD Coin (USDC)
USD Coin is Coinbase’s very own stablecoin, a cryptocurrency whose value is tied to the US dollar. Coinbase guarantees that every USD Coin can be exchanged for 1 dollar, but you can still send, receive, and store it like bitcoin.
Withdrawing money to your bank account from Coinbase requires first trading your bitcoin for USDCoin.
Founded in 2012, Coinbase is one of the largest, oldest, and most widely used cryptocurrency exchanges in the world.
Current Promo: Earn free Bitcoin with your new account.
Coinbase Earn
Coinbase has a vested interest in people learning about the value of cryptocurrencies (since if people get excited about them, they’ll probably buy more), so they’re even willing to pay you to learn about cryptocurrency. Coinbase Earn is a program where you can earn up to $180 worth of various cryptocurrencies in exchange for reading about them and successfully passing quizzes.
I've recently spent some time on Coinbase Earn and quickly "learned and earned" roughly $50 worth of cryptocurrencies in under an hour. Below are my email notifications from Coinbase.
Related: Insider Look at Polkadot (DOT) - the Fourth Largest Cryptocurrency By Market Cap
Coinbase Earn: Learn and Earn Crypto
Coinbase Affiliate Program
Coinbase also has a referral program available to all users. This referral program pays users for promoting their cryptocurrency exchange. After you log into your Coinbase account, you can easily find your "referral link" inside the dashboard.
Share this link with friends that are interested in getting started buying bitcoin or other cryptocurrencies. Both you and your referral will receive $10 in free bitcoin when they buy or sell $100 of cryptocurrencies. There is no limit to the number of people that you can refer to Coinbase and earn these commissions.
In addition to the referral program, Coinbase also has an affiliate program. If you're a digital marketer, blogger, or online publisher, you can apply to join their affiliate program. When you refer a new customer to Coinbase, you'll earn 50% of their fees for the first three months.
Staking Services
Bitcoin is created through a process called mining. This process requires specialized equipment and energy. Most bitcoin proponents consider this to be a superior method, because it means the production of bitcoin is tied to real economic costs.
An alternative method used by some cryptocurrencies is called “Proof of Stake.” This method requires putting down a deposit as a security against bad behavior, and then verifying transactions in much the same way as bitcoin.
There is a lively debate about the pros and cons of each of these methods. In any case, if you own a cryptocurrency that uses proof of stake, like Tezos, for example, you can earn income from this holding.
Coinbase is willing to manage staking for its users, for a cool 25% of the profit.
Multisignature Vault
One of the complaints many users have about Coinbase is that Coinbase has controls over the funds, rather than the user. In response to this complaint, Coinbase started offering multi-signature wallets.
With this option, there are three sets of digital keys, and two are required to move the funds. One key is held only by the user, another by Coinbase, and another is shared. In this way, even if Coinbase goes down, the user is still able to retrieve their funds.
Coinbase Custody
Coinbase Custody is a service primarily aimed at large, institutional players like banks and other financial services companies. They offer highly secure storage for large amounts of cryptocurrency.
Coinbase Card
The Coinbase card is a debit card which works anywhere that Visa cards are accepted. It is linked directly to your Coinbase account, so when you make a purchase or a withdrawal from an ATM, it automatically sells the equivalent amount of bitcoin at the current market price.
This might be a good option for people who are “all in,” ie. who keep all of their funds in bitcoin.
The Coinbase Card is currently available in the United Kingdom, France, Spain, Austria, Poland, Croatia, Bulgaria, Belgium, Estonia, Denmark, Finland, Germany, Greece, Cyprus, Hungary, Iceland, Italy, Ireland, Liechtenstein, Luxembourg, Portugal, Netherlands, Latvia, Slovakia, Romania, Slovenia, Lithuania, Norway, and Sweden.
The company is working on expanding the Coinbase card to customers in additional markets.
Security and Safety
Coinbase is fully licensed and regulated everywhere that it operates, and takes security very seriously. In 8 years of operation with millions of customers, no one has reported any issues with linking their bank account to Coinbase. They also encrypts all user information, including passwords, on their servers, and all traffic to the website is routed through secure protocols.
The majority of Coinbase funds are stored offline in a so-called “cold wallet.” This means that the keys to 90%+ of the cryptocurrencies under Coinbase’s management are not connected to the internet, and thus are not accessible to hackers.
Even if there was some kind of a heist, Coinbase does carry an insurance policy that would cover any loss of customer funds. They also have the same FDIC insurance as most bank accounts, meaning even if the Coinbase goes out of business or disappears, the federal government guarantees up to $250,000 of your deposit.
Coinbase does not, however, carry insurance for your individual account if it is compromised for some reason beyond Coinbase’s control.
A small number of users have fallen victim to hackers in the past and lost funds in the past.
For this reason, Coinbase has an extensive security guide and includes a number of security features. 2 factor authentication (2FA) support is available, by which you can link your account to a smartphone, and generate one time passwords (OTP) each time you log in. By following the steps in this guide, the risk of losing funds to a hack is almost non-existent.
Founded in 2012, Coinbase is one of the largest, oldest, and most widely used cryptocurrency exchanges in the world.
Current Promo: Earn free Bitcoin with your new account.
Deposit Methods
There are three basic methods to get money to Coinbase for purchasing bitcoin or other cryptocurrencies; bank transfers (ACH), debit card, and wire transfer.
Bank Transfer
The advantage of bank transfers is that the fees are lower, but it takes time to link your bank account to your Coinbase account, and it also takes 3-5 days for deposits to appear in your account.
The bank account is linked by entering your account number and bank routing number on Coinbase. Coinbase then sends you two deposits in amounts under 1 dollar, and you confirm the exact amounts of the deposit to prove you are the owner of the bank account.
Once your account is linked, it is quite straightforward to move money in and out, but it takes several days.
Debit Card
Debit cards are a much faster option for getting money into your account. It’s main disadvantage is that it comes with significantly higher fees. This is understandable, though, since fraud with debit cards is much more common than with bank transfers.
Credit cards were accepted for a time, but at the moment Coinbase is not accepting any new cards.
Wire Transfer
Wire deposits are only available for amounts over $5,000 USD. The only real advantage to this method is that it can sometimes be a bit quicker than ACH.
Withdrawal Options
Withdrawal to Bank Account (ACH)
This is the most common option, and takes 3-7 days.
PayPal
Coinbase began supporting PayPal withdrawals in late 2018. This method is free, and faster than ACH.
Wire Transfer
Wire transfer withdrawal is available only for withdrawals of $25,000 or greater.
Withdraw to External Cryptocurrency Wallet
Withdrawing bitcoin or other cryptocurrencies is straightforward if you have another wallet. Simply input your address and send.
Fees
From early on, Coinbase has focused on making it as easy as possible to buy bitcoin. The user interface is pretty streamlined, but this comes with a premium. Fees are higher than on other exchanges.
Fees vary depending on the country, but the fees for the US are as follows:
Deposit Fee: Free for ACH, $10 for wire transfer.
Debit Card Purchase Fee: 3.99% of total purchase.
Purchase Fee: 1.49%
Withdrawal Fee: $25 for wire transfer.
The most common fee you will pay when using Coinbase is the purchase fee. This fee is charged whenever you buy or sell bitcoin or another cryptocurrency for dollars. At 1.5%, this is still lower than most similar services.
If you withdraw bitcoin or another cryptocurrency to an external cryptocurrency wallet, you will need to pay the standard network transaction fee.
International Deposits, Withdrawals and Fees
In the UK, deposits can be made via SEPA and are free, while withdrawals cost £1.
European users can also deposit funds via SEPA bank transfers, which takes 2-3 business days, while withdrawals take 1-2 days. Deposits are free in Europe, and withdrawals cost €0.15.
In Canada, deposits and withdrawals are processed by EFT by Interac. Deposits take 3-4 days, and withdrawals 1-2 days.
In Singapore, deposits are instant, while withdrawals take 2-3 business days. Same day withdrawal is available for a S$2.99 fee.
Founded in 2012, Coinbase is one of the largest, oldest, and most widely used cryptocurrency exchanges in the world.
Current Promo: Earn free Bitcoin with your new account.
401(k) and IRA Support
Coinbase partnered with custodian Kingdom Trust and alternative investment firm Regal Assets in 2019 and began offering support for IRA and 401k accounts. The arrangement is insured by Lloyd’s of London for up to $200 million, and offers investors the ability to invest in all of Coinbase’s supported assets with the tax benefits that come with individual retirement accounts.
Owners of these "Crypto IRAs" can allocate their portfolio however they want once the accounts are set up.
Related: Expert Q & A - How to Buy Bitcoin with Your 401(k) or IRA
Buying Limits
There are several account levels on Coinbase, and how much you can buy or sell depends on your account level. To increase your account level, you need to do things like verify your phone number, upload a photo ID, or verify personal information.
With only a debit card, you are limited to $1,000 worth of cryptocurrency per week. With full verification and an older account, you can buy up to $50,000 worth of cryptocurrency per day. The other tiers fall somewhere in the middle.
Customer Service
Coinbase’s customer service is probably the area where it loses the most points. The site has a huge volume, so it can take several days, and sometimes longer, to get a reply. And when you finally do hear back from them, the replies are not always very helpful.
There are numerous horror stories online about accounts being frozen for no reason, customer service banning users without giving any reason, and other issues. The Better Business Bureau gave Coinbase an “F” rating for ignoring many customer complaints.
Still, the majority of users have trouble-free experiences.
Privacy
Coinbase is required by law to follow all anti-money laundering regulations. In 2017 Coinbase was court ordered to hand over some customer records to the IRS after a lengthy court battle.
It has been criticized by some privacy activists for tracking how users spend their cryptocurrency. Some users have reported that their accounts were shut down with little or no explanation after using their money for activities that Coinbase does not approve of. These activities include adult websites or services, cannabis related products, dark web marketplaces, or resale of coins on other marketplaces.
Because much of the cryptocurrency community believes strongly in principles of freedom and privacy, Coinbase has earned quite a bad reputation among
Comparison to the Competition
Other major sites offering services similar to Coinbase include Coinmama, Bittrex, and Gemini.
The closest competitor to Coinbase is probably Gemini, which was founded by the Winklevoss twins in 2014. Gemini’s fee schedule is more complicated than Coinbase, but for certain purchases can be slightly cheaper than Coinbase, although it is usually slightly more expensive. So far, Gemini has a better reputation with regards to account closures and customer service.
Founded in 2012, Coinbase is one of the largest, oldest, and most widely used cryptocurrency exchanges in the world.
Current Promo: Earn free Bitcoin with your new account.
Summary
Coinbase is an affordable and easy to use service. It offers a wide range of features, and has competitive pricing.
It might not be the best idea to use it for storing funds long term because of its reputation for poor customer service, summary account closures, and questionable privacy policy. But for newcomers to the world of bitcoin and cryptocurrency, it is still one of the most convenient and least intimidating options for entering the world of cryptocurrency.