Brief informations

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About Coinbase

Coinbase is one of the largest cryptocurrency exchanges worldwide and is active in over 100 countries worldwide, with more than 20 million customers. The american exchange was founded in 2012 by Brian Armstrong and Fred Ehrsam, making it one of the oldest crypto exchanges in the world. In the beginning Coinbase was only a Bitcoin broker, where you could buy Bitcoin “only”.

In recent years Coinbase has continued to expand its service. Now numerous cryptocurrencies are available besides Bitcoin, such as Ethereum, Litecoin, Bitcoin Cash, 0x, Chainlink and numerous other coins. In addition, Coinbase now offers the purchase and sale of cryptocurrencies by credit card, debit card and bank transfer. Since 2018 Coinbase has also been offering a wallet service via a mobile wallet for iOS and Android. However, the main service that Coinbase offers is still the brokerage service.

In addition to the brokerage platform, the american company also offers Coinbase Pro. This is an exchange that is aimed at experienced investors and investors who want to trade cryptocurrencies. Coinbase Pro allows users to actively trade cryptocurrencies. The fees are significantly lower than for the brokerage service. There are also advanced trading options.

Coinbase is particularly popular among beginners worldwide, as it is fully regulated and licensed in the USA. The company also offers deposit insurance for all customer deposits held online at Coinbase. In case of a hack of the online storage of Coinbase, the insurance policy would cover the customer money lost through the hack. Based on these facts, the exchange enjoys an extraordinarily good reputation worldwide.

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Which cryptocurrencies can I buy on Coinbase?

Basically Coinbase offers the following 14 cryptocurrencies (as of July 2019). Due to different legal regulations, however, it is possible that individual cryptocurrencies are not offered in each country.

Approved countries – Is it legal for me to trade on Coinbase?

Since Coinbase actively cooperates with regulatory authorities worldwide and takes into account the specific laws of each country, not all people worldwide are entitled to use Coinbase (officially). Also, not all cryptocurrencies are available in all countries. Currently, persons from the following 103 countries are entitled to use Coinbase:

Coinbase fees 

Coinbase payment methods and fee structures are somewhat difficult to understand and vary from country to country. In principle, the following payment methods are accepted:

• Bank Transfer (including ACH in the USA and SEPA in the EU)
• Credit card
• Debit card
• PayPal (payout only)

Coinbase determines the exchange rate by adding a margin or spread to the market rate of Coinbase Pro (“Pro Exchange Rate”). In addition, Coinbase also charges separate fees (in addition to the spread), which are either a flat fee or a percentage of the transaction. The fee structure for this is basically as follows:

• There are no fees for bank transfers.
• A fee of 3.99 percent of the transaction amount is charged for credit card payments.
• A fee of 1.49 percent of the transaction amount is charged for purchases made with Coinbase credit.
• A flat fee of 0.15 Euro will be charged for payment / transfer from Coinbase to a bank account.
• Transactions between Coinbase accounts are free of charge.

Coinbase also charges an additional fee for smaller purchases. The flat rates are listed below. If the transaction amount …

• is less than or equal to 10 USD, the fee is 0.99 USD.
• is between 10 and 25 USD, the fee is 1.49 USD.
• is between 25 and 50 USD, the fee is 1.99 USD.
• is between 50 and 200 USD, the fee is 2.99 USD.

It should also be noted that not in every country, all payment methods are allowed. The following table gives an overview for European customers how cryptocurrencies can be bought and sold on Coinbase.

For US customers, there are different payment methods available:

Verification and limits for the purchase

There is no blanket answer to this question, as Coinbase, unlike other exchanges and brokers, sets limits individually for each user. Generally valid statements about the level of the limits cannot therefore be made. In principle, however, it can be said that the limits on Coinbase can be divided into two stages. Each level activates additional functions.

By reviewing certain information you will gain access to higher limits on your Coinbase account. Level 1 requires you to provide proof of your telephone number and ID. To reach level 2, you must verify your complete personal information. In addition, the limit depends on various other factors:

• payment method
• age of your account
• history of previous purchases

How high the limits actually are, as already mentioned, cannot be generalized. On the Internet, however, there are numerous reports where users write about their limits. According to this, the initial limit seems to be EUR 500 per week for credit card payments and EUR 1,000 per week for bank transfers. If you verify yourself with one document, the limit probably rises to 9,000 euros, while for two documents it is 15,000 euros. However, these values should only serve as rough guide line. You can find your own limit in your Coinbase account.

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How can I buy cryptocurrencies on Coinbase?

The registration process at Coinbase is very simple and quick. To register, you must first visit the official Coinbase website (click here!)*.

Once you have entered your name, email address and password, Coinbase will ask you to confirm your email address via a confirmation link. Coinbase will then ask for your phone number and will confirm it with a PIN code sent to you by SMS. Due to legal requirements Coinbase has to verify your identity and requires the following information: your date of birth, your full address, your profession, name of your employer, the origin of your funds, as well as your investment experience. All other details are not mandatory, but only increase your purchase limit, as described above.

When you’re done verifying, you can buy cryptocurrencies. To do this you have to do the following steps:

1. Go to the Buy page by clicking the “Trade” button in the upper right corner. Afterwards you have to add a payment method:
2. Then you will see the following window. Depending on your country of residence you will have different options. In this example you can see the options for UK customers:
3. In the next step you can select your desired cryptocurrency (Bitcoin is selected by default, see screenshot) and enter the amount in your local currency which you would like to invest:
4. Below the cryptocurrency you can select the payment method alongside “Pay with”. If you have already entered a credit card, you will see the following window. You also have the option to select a different payment method (e.g. bank transfer). The corresponding purchase limit is displayed in the window.
   
5. When all details are complete, click on “Buy”. The respective cryptocurrency will now be credited to your Coinbase account within a few seconds. The purchase process on Coinbase is that simple!

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How can I sell cryptocurrencies on Coinbase?

The sale of cryptocurrencies, on Coinbase works very similar to the buying process. To sell, you must also click the “Trade” button (top right). Then select the tab “Sell” as shown in the screenshot.

Here you now have two setting options:

1. Choose the cryptocurrency you want to sell. If you have selected a cryptocurrency (with an amount > 0) and want to sell all units, you can click “Sell All” to sell all units.
2. Select the account to which you want to transfer the equivalent in your local currency for the sale. Usually this will be your Coinbase Wallet (EUR, USD, GBP).

How can I trade cryptocurrencies on Coinbase?

Coinbase also allows its users to exchange cryptocurrencies against each other on the platform. You can do this via the tab “Convert”. With “From” you choose the cryptocurrency which you want to sell and with “To” you choose the cryptocurrency which you want to receive. You will then get to see a new page which will show you how many units to trade and how much you will receive in return. You will also be shown that the Coinbase fee for trading is zero for converting cryptocurrencies.

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The Coinbase Wallet

Is the Coinbase Wallet safe?

The Coinbase Wallet is available for your internet browser on your desktop PC as well as via apps for iOS and Android.

It is important to know that since August 2018 the Coinbase Wallet works like a “real” software wallet and like the Exodus, Jaxx Liberty or the MyEtherWallet. This means that Coinbase does not control the private keys (which represent the ownership of the cryptocurrency). Conversely, this means that users have full control over their own cryptocurrencies. Unlike other exchanges such as Binance or Litebit, Coinbase users are not forced to set up an external wallet to manage the private keys themselves.

Since February 2019, users have also been able to secure their private keys using their personal cloud storage accounts, such as Google Drive or iCloud. This function is intended to protect the user from total loss if the hardware used (the smartphone) is broken or lost and the private key is required. Instead of storing the private key on a sheet of paper or an external hard drive, Coinbase offers a very convenient solution.

The storage of the private key on a cloud account does not sound very secure and trustworthy at first. However, Coinbase has assured that neither they nor the cloud service provider have access to the private key, which is decrypted by a password that only the user knows. According to Coinbase, the backup is stored using AES-256 GCM encryption and can only be accessed via the Coinbase mobile app.

A very useful feature of the Coinbase Wallet is that users can deposit US dollars into their account (for example Coinbase EUR-Wallet or Coinbase USD-Wallet). This allows users to store their local currency on their account and buy Bitcoin and the other Altcoins without delay (as with a bank transfer). In addition, Coinbase users can sell their cryptocurrencies in USD to cash out and buy Bitcoin again (if the exchange rate is favorable).

Guide: How the Coinbase Wallet App works

The Coinbase Wallet App is available for both iOS and Android users and can be downloaded from the Apple App Store and Google Play. After the download you have to link your Coinbase.com account with the Coinbase Wallet App. And that’s how it works:

1. Download the app from the App Store and Google Play Store.
2. Link your Coinbase.com account to the Wallet app by selecting “Connect to Coinbase” from the “Settings” menu.
3. After completion you can transfer the offered cryptocurrencies to your Wallet App at any time with a few clicks.

The wallet has multi-coin support and allows users to manage all 14 cryptocurrencies offered by Coinbase.com, as well as all ERC-20 tokens including the USDC stablecoin.

More services from Coinbase

The USDC Stablecoin

Like other cryptocurrency exchanges, Coinbase also supports a stable coin, which should enable users to secure profits and protect themselves against the volatility of cryptocurrencies. This stable coin is the USD Coin (USDC) issued by a consortium called Centre. Centre has undertaken to hold one US dollar in a bank account for each USD coin. The USD reserve holdings are checked regularly. The Grant Thornton LLP will produce a monthly report on this.

Interestingly, the Centre Consortium received early stage funding from Circle and Coinbase to support its development. It is also important to note that USDC is not only available on Coinbase and Coinbase Pro, but is also tradable on other leading exchanges such as Binance, Bitfinex, Kucoin and OKEx.

Coinbase Earn – Earn Crypto with Coinbase

To help create an open financial system and make blockchain technology more accessible, the company behind Coinbase has created the learning platform: Coinbase Earn. The platform allows verified users to earn cryptocurrencies by answering quiz questions.

At Coinbase Earn, users can first watch informative videos about various cryptocurrencies and then participate in a quiz. For every correctly answered question, Coinbase gives a small reward in the form of the respective cryptocurrency, which is then transferred to the user’s Coinbase account.

Coinbase Earn thus aims to encourage users to develop a deeper understanding of cryptocurrencies and the underlying technology by making easy-to-consume educational content easily accessible. Currently it is possible to view and earn rewards on cryptocurrencies such as Stellar Lumens (XLM), Zcash (ZEC), Basic Attention Token (BAT), 0x (ZRX) and Dai, with more currencies planned for the future.

The Coinbase Card

The Coinbase Card allows Coinbase customers to easily issue cryptocurrencies both in the store and online. The card can be used at any location where VISA cards are accepted. This allows Coinbase customers to use their cryptocurrencies in millions of stores and online stores around the world. When using the Coinbase Card, the company converts the Coinbase balance into fiat currencies. There is also a Coinbase Card App so customers can access their accounts while on the move.

How can I use Coinbase Pro?

After Coinbase renamed its stock exchange to GDAX in 2015, it was renamed to Coinbase Pro again in 2018 in order to more clearly separate Coinbase.com’s brokerage service from the stock exchange. Coinbase Pro is designed to provide advanced traders with a trading platform that includes real-time order books, trade histories and charting tools.

It is important to know that there is only one account for Coinbase.com and Coinbase! All Coinbase customers automatically have an account with Coinbase Pro and can log in to Coinbase Pro with the same access data.

Coinbase put to the test

Security and reputation

In the perception of newcomers, Bitcoin and other cryptocurrencies are still partly risky investments that do not have a good reputation and are not safe to keep. However, with Coinbase beginners will find a exchange that has one of the highest security standards in the crypto market and one of the best reputations. Coinbase is considered to be one of the safest brokers and exchange platforms currently available worldwide.

The reason for this is that Coinbase is located in the USA and is therefore obliged to comply with US state and federal law. The company is also actively engaged in discussions with regulators in Washington to ensure that the exchange operates in compliance with the law.

On the other hand, Coinbase is very transparent when it comes to the custody of customer funds. As Coinbase writes on its website, it separates customer funds from business assets, so that in the event of insolvency neither Coinbase nor its creditors have any claim to the customer funds held in safe custody. Regarding the management of cryptocurrencies, Coinbase states that 98 percent of cryptocurrencies are stored offline via hardware and paper wallets. The remaining 2 percent are stored online, but are insured. Thus, in the event of a hack, Coinbase customers have the right to receive a refund of the lost funds.

Fees and payment methods

Basically, Coinbase fees range from about 1.49 percent to 3.99 percent. The amount depends on the payment method, whereby credit card transactions lead to higher fees (at the upper end of the scale). The fees for Coinbase’s brokerage service are generally lower than those for other brokers with a similar business model, such as Coinmama or CEX.io.

The fees of the best broker in comparison

Litebit	Coinmerce	Bitpanda	Coinmama	Coinbase
Available in: Europe	Available in: Europe	Available in: worldwide	Available in: worldwide	Availbale in: 103 countries
Fees: approx. 1-2%	Fees: approx. 1-3%	Fees: 1,49%	Fees: 5,9%	Fees: 1,49%
Visit Broker*	Visit Broker*	Visit Broker*	Visit Broker*	Visit Broker*

The Support

Coinbase offers its customer support via email and phone (a phone number for US/international customers and a phone number for UK customers), as well as a FAQ page. There are numerous reports on the Internet that describe Coinbase customer support as very bad and poor. For example, some Coinbase users report that their concerns were not taken seriously and they received “spam responses” that did not (fully) solve the problem addressed.

The reaction times for customer support can also vary widely according to experience reports. Especially large increases in demand for support have led to large delays in the past. The typical response time of the support is usually between 24 and 72 hours, according to the majority of experience reports.

We ourselves haven’t had any experience with Coinbase support yet, so we can’t judge about it. Maybe you have already had contact to Coinbase Support. We would be pleased to hear about your experiences in the comments!

Hacker attacks

Basically, we are not aware of any hacks from Coinbase in which large quantities of cryptocurrencies could be stolen.

However, in May 2019, a medium post from Sean Coonce, Engineering Manager at BitGo, caused a stir when he announced that he was the victim of a SIM swap hack. According to the post, Coonce had lost over $100,000 from his Coinbase account in less than 24 hours.

Bottom line

Especially for newcomers worldwide Coinbase is a very good choice, as the brokerage service offers a practical and easy to use service for buying and selling cryptocurrencies. The fees are moderate compared to other brokers. Only customer support seems to be in need of improvement.

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Coinbase Alternatives

Litebit is our top recommendation for you. The exchange offers 50 different cryptocurrencies for direct purchase by credit card, SEPA, SOFORT and much more. You can send the purchased cryptocurrencies directly to your external wallet. The customer support is really fantastic and always reachable. We have been a regular customer of the stock exchange for 4 years and are very satisfied.  >> To the Litebit review <<

Coinmama is a UK based stock exchange that supports the purchase of cryptocurrencies by credit card and Paypal. You can also pay by bank transfer. On the platform you can also send your purchased cryptocurrencies directly to your external wallet. Experience has shown that this exchange is also absolutely trustworthy and safe. >> To the Coinmama review <<

Binance is one of the world’s largest stock exchanges and is considered to be particularly user-friendly and secure. Within just a few months, Binance has risen to become the largest stock exchange in terms of trading volume. It is also possible on Binance to buy Bitcoin, Ether and XRP directly by credit card. The selection of coins for trading is huge. >> To the Binance review<<

eToro is a well known cryptocurrency broker offering both the purchase of “real” cryptocurrencies by credit card and the trading of cryptocurrency CFDs. You can use up to a double lever to bet on the price of the cryptocurrencies. >> To the eToro review<<