Overview of Coinbase
Coinbase is one of the largest digital asset exchanges in the world. The platform allows users to easily buy, sell, transfer and store digital currencies, such as Bitcoin, Ethereum, and Solana. Over 120 different cryptocurrencies are available, and the platform has accrued tens of millions of users over the past decade.
The platform's ease of use, regulatory compliance, and safety protocols make Coinbase one of the best places for new crypto investors to buy, sell and store their digital asset of choice.
Coinbase was founded in 2012 by Brian Armstrong, a former Airbnb engineer, and Fred Ehrsam, a former trader with Goldman Sachs. The company was established on the idea that Bitcoin, the most popular cryptocurrency at the time, should be accessible to anyone. The aim was to construct a platform allowing people to easily send and receive the currency, using a fair, transparent, and efficient system.
Over the subsequent decade, Coinbase has grown into the largest publicly traded US-based cryptocurrency exchange, boasting over 100 million users worldwide, a $217 billion trading volume, and almost 5000 employees across more than 100 countries.
What are the main services Coinbase offers?
Coinbase offers a wide range of services for investors new and old looking to trade with their favorite digital currency. Here are some of the main offerings.
Coinbase’s foundational offering is their mobile app, available on iOS and Android. It boasts a user-friendly interface that makes it easy for first time investors to buy and sell various digital currencies. Using the app, you can manage your portfolio, keeping track of your investments in one place. It also has functions such as recurring buys, where you can schedule purchases daily, weekly or monthly, to invest slowly but steadily over time. Or you can enhance your crypto security with vault protection.
Coinbase Pro is a crypto trading platform for more advanced institutional and retail traders. It allows users to make high volume trades across a variety of trading pairs. With a Coinbase Pro account, you can trade securely, track the market, manage multiple portfolios, and execute more advanced order types.
A crypto wallet is a tool to keep your cryptocurrency safe online. When you use crypto, you have private keys, or passwords that give you access to your digital assets so you can buy and trade securely. A digital wallet, such as Coinbase Wallet, stores these keys for you. When you need to trade, you simply access your wallet and get started. Coinbase Wallet is a self-custody wallet that gives you complete control over your crypto, allowing you to store and manage all of your digital currency in one place. Rather than being stored in a centralized exchange, your private keys are stored on your mobile device.
If you need fast cash for something urgent like medical bills or home repairs, Coinbase’s borrowing feature can help you out. Rather than selling your digital assets for immediate liquidity, you can borrow up to $1,000,000 form Coinbase, using your Bitcoin as collateral. You can borrow as much as 40% of your Bitcoin’s value, making monthly interest payments until you’re ready to pay off the balance.
Non-fungible tokens, or NFTs, are one of the latest investment trends and proving to be a rapidly growing market. An NFT is a record on a blockchain that represents a particular digital or physical asset such as a piece of art, music, or video. The recently launched Coinbase NFT marketplace allows users to connect their crypto wallets to buy and bid on NFT collections.
Coinbase Prime is a corporate-level solution targeted at businesses and institutions looking to buy and manage digital assets as a way of boosting their financial growth. Corporate investors will have access to diversified liquidity rather than relying on prices from Coinbase’s exchange. Prime features include algorithmic orders, advanced market data tracking, and over-the-counter trading.
Coinbase customers can apply for a Visa debit card funded by their crypto wallet balance. The card works just like any other debit or credit card, making your crypto instantly and easily spendable.
What is COIN?
Coinbase became a publicly traded company in April 2021, on the NASDAQ stock exchange. COIN is not a crypto token. It is the ticker symbol for Coinbase stock and also represents the equity of Coinbase as a corporation. COIN can be bought or sold through most major stock brokerage platforms and apps.
How does Coinbase make money?
Coinbase generates revenue in a variety of ways, including:
Transactional Fees - The primary method of making money is through transactional fees, which make up around 87% of the company’s total revenue. When a user buys, sells, deposits, or withdraws any crypto assets, Coinbase takes a portion of the transaction amount. The fee structure is tiered, meaning that the precise fee depends on the price and quantity of the assets involved in the transaction.
Subscription and Services Revenue - Coinbase’s subscription and services revenue comes from areas such as blockchain rewards, custodial fees, campaign revenues, and interest income.
Other Revenue Streams - Coinbase also makes money from the sale of crypto assets in transactions where Coinbase is the trader, as well as corporate interest.
What are the fees on Coinbase?
Coinbase charges a transaction fee at the time you make your order. These fees follow a tiered pricing structure and will depend on the price and quantity of the digital assets involved. Here is a detailed breakdown of the fees you can expect to be charged.
Coinbase Flat Fees
- Transaction value of $10 or less: $0.99 fee
- Transaction value more than $10, less than or equal to $25: $1.49 fee
- Transaction value more than $25, less than or equal to $50: $1.99 fee
- Transaction value more than $50, less than or equal to $200: $2.99 fee
Coinbase Pro Trading Fees
- $0-10K of trading volume - 0.6% Taker Fee - 0.4% Maker Fee
- $10K-50K of trading volume - 0.4% Taker Fee - 0.25% Maker Fee
- $50K-100K of trading volume - 0.25% Taker Fee - 0.15% Maker Fee
- $100K-1M of trading volume - 0.2% Taker Fee - 0.1% Maker Fee
- $1M-20M of trading volume - 0.18% Taker Fee - 0.08% Maker Fee
- $20M-100M of trading volume - 0.15% Taker Fee - 0.05% Maker Fee
- $100M-300M of trading volume - 0.1% Taker Fee - 0.02% Maker Fee
Is Coinbase safe to use?
If you’re new to investing, or you’re an experienced investor just starting out with Coinbase, it’s natural to wonder whether the platform is safe. It’s important to note that any form of investment comes with inherent risks. Inexperienced users can easily get in over their heads and make unwise investment decisions, and the cryptocurrency market is speculative and volatile, meaning a purchase that seems relatively safe today could plummet in value tomorrow. There are also risks regarding cybersecurity threats, whereby your information or assets could be exposed to unauthorized third parties.
Nevertheless, Coinbase is one of the safest platforms out there, due to its credentials, security practices, regulatory compliance, insurance and guarantees. Here are some of the measures Coinbase takes to keep its users safe.
In order to use the Coinbase platform and its features, users are required to submit a form of government-issued identification. Coinbase cannot therefore be used anonymously, a practice that deters dishonest users, while building trust with legitimate ones. Some users may complain about the lengthy onboarding process, while others will welcome the additional security this brings.
Coinbase holds 98% of its digital assets in offline cold storage that cannot be accessed by cybercriminals. This makes it one of the safest digital wallets you can use. In a theoretical cybersecurity breach, it is only the 2% of online assets that could be illegally accessed, and these are insured for any losses. This way, if any of your crypto funds are stolen, you will be reimbursed.
All sensitive data and assets are encrypted, including your private keys and wallet addresses. Your personal data is encrypted under AES-256 encryption and split into multiple copies with backups for redundancy, stored in secure locations.
Additional Security Features
Coinbase employs a number of additional security features to ensure the safety of its users and their assets. These preventative measures include two-factor authentication, employee screening, additional encryption across the Coinbase website, and regular advice to users about protecting their crypto assets.
Is Coinbase regulated?
One of the reasons Coinbase is so popular is that it is transparent in its adherence to all essential trading regulations. The company is licensed for conducting monetary transmissions in all US jurisdictions except - at time of writing - Hawaii, where the platform is unavailable. Coinbase is registered as a Money Services Business with the Financial Crimes Enforcement Network (FinCEN), and complies with the following consumer services and financial protection laws:
- The Bank Secrecy Act
- The USA Patriot Act
- Money transmission laws and corresponding regulations in each of the states in which Coinbase operates
Outside of the US, Coinbase is authorized by the Financial Conduct Authority (FCA) for the issuing of electronic money in the United Kingdom. Coinbase also has regulatory licenses to operate in countries such as Canada, Mexico, most of Europe and many other parts of the world.
Coinbase is also a publicly traded corporation trading on the NASDAQ exchange. Being publicly traded means that Coinbase must adhere to a higher standard of financial compliance and reporting. They’re also required by law to make their financial statements publicly available.
Does Coinbase have deposit insurance?
For US based customers, Coinbase holds USD balances with partner banks who themselves are FDIC deposit insured. Through this deposit insurance, you are covered for values up to $250,000, for any issues of financial insolvency or bankruptcy by the bank holding your funds. It’s important to note that this coverage only applies to US dollar deposits, and not crypto holdings or stablecoins.
Coinbase also carries insurance for losses resulting in a security breach of Coinbase’s system. In the event of a hack or theft of Coinbase’s wallet infrastructure, the insurance policy will cover any losses. It’s important to note that this insurance does not cover losses due to a user’s own error in security. It only covers losses that are a result of Coinbase’s own fault.
In what countries is Coinbase available?
Coinbase is currently available in over 100 countries worldwide, including nations in North America, South America, Europe, Asia, Oceania, and Africa. For a comprehensive list of every Coinbase-supported country, click here.
How do I open a Coinbase account?
If you are new to the world of crypto trading, opening an account with Coinbase is simple and efficient. Here are the steps you’ll need to follow:
Step 1: Make sure you are eligible
In order to be eligible for a coinbase account, you will need to be at least 18 years of age and have a government-issued photo ID such as a driving license or identification card. You’ll also need a device to connect to the internet and a working phone number connected to your smartphone. In order to ensure full functionality, you should also be using the latest version of your internet browser.
Step 2: Create your account
Step 3: Verify your email and phone number
You will receive a verification email in your inbox, containing a link you will need to click in order to continue setting up your account. Sign into your account and you’ll be prompted to enter a phone number. You’ll be sent a seven digit code via text, which you will need to enter in order to proceed to the next step.
Step 4: Add your personal information
At this stage, you will be asked to provide some more detailed personal information, including what you plan to use Coinbase for, your source of funds, and your current occupation.
Step 5: Verify your identity
As part of Coinbase’s security measures, you will need to have your identity verified. You’ll need to provide your photo ID at this stage.
Step 6: Link your payment method
Coinbase supports a range of different payment methods, which depend on the country in which you are based. Link your chosen method and you are ready to get started.
Withdraw from Coinbase
Withdraw to your bank account
Coinbase provides a number of ways to withdraw your fiat currency to your bank account. For US customers it’ll take 1 to 5 business days to receive your USD via ACH Bank Transfer. Users in Europe will receive their funds in 1 to 2 business days via a SEPA withdrawal to their bank. Users in the UK can withdraw their GBP within 1 to 2 business days as well.
Withdraw crypto from Coinbase
You can withdraw your crypto off of Coinbase and into your own external wallet through the Coinbase app or website by going to the “Withdraw” screen on Coinbase. From here you can select the asset you wish to withdraw, the amount the wallet address to withdraw to.
What sort of customer support does Coinbase offer?
Coinbase offers live telephone support, available 24/7 for customers in the US. There is also international phone support for customers who are based elsewhere or traveling. Customer support services also include 24/7 live chat messaging, email, and Twitter status updates.