Coinbase Review 2021 | What to Know Before Using It

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Program Name: Coinbase

Sign-Up Website: Coinbase.com/sign-up

Type of business: Cryptocurrency Exchange

Price: $0 – You get free Crypto

Owner: Fred Ehrsam & Brian Armstrong

Overall Rank: 3.5 stars

There are many exchanges out there where you can purchase cryptocurrency with regular currency. Among them, Coinbase is one of the biggest cryptocurrency exchanges around. In this 2021 Coinbase Review, I’ll be going over everything you need to know about Coinbase and its updates.

What Is Coinbase?

coinbase logo

Founded in 2012 and starting as a Bitcoin storage service, Coinbase is a fully regulated, licensed, and insured cryptocurrency brokerage. Here, you can buy, sell, convert, send, and receive various cryptocurrencies. 

It supports multiple payment methods including the following:

  • Wire transfer
  • Debit card
  • Credit card
  • Crypto deposits
  • Paypal (withdrawal or sell only)

Coinbase is a cryptocurrency company and has gained a lot of trust over the years. Coinbase gained a lot of this trust after being one of the first cryptocurrency companies to be legally regulated and insured

Based on transaction volume, Coinbase sits at #2 out of over 300 cryptocurrency exchanges, worldwide. This means that Coinbase is the number 2 exchange where all exchange transactions take place. 

Coinbase received more than $540 million in funding from leading investors, such as Andreessen Horowitz, USV, and USAA. It has over 35 million verified users, supports 102 countries, and more than $320 billion are traded on it.

For any brokerage though, always keep in mind that although it may gain a lot of attention and traction, bigger isn’t necessarily always better. 

Coinbase Services & Features

Coinbase offers many services which include the following:

  • Coinbase Brokerage Service: This is the traditional brokerage service that Coinbase offers where you can exchange fiat currency for cryptocurrency, or cryptocurrency for other cryptocurrencies. New cryptocurrency users usually find themselves buying their first cryptocurrency through Coinbase. This is thanks to their big reputation and user-friendly interface.

    Keep in mind, however, Coinbase is not a wallet. You can keep your funds in the Coinbase brokerage, but keeping them in there is the equivalent of keeping them at a bank. When you have money in Coinbase, you don’t have direct access to your cryptocurrency. You don’t get a private key or a seed phrase.

    If you want direct access to your cryptocurrency, you can move it out of the Coinbase brokerage account and into a wallet like the Coinbase Wallet, for example. Or you could move it to any other wallet you’d like after you buy them on Coinbase.
  • Getting Paid To Learn: Coinbase provides educational videos that pay you to watch their lessons on specific cryptocurrencies and take their small quizzes. Coinbase always pays you in the form of the cryptocurrency you’re learning about. Of course, if you don’t want to keep that specific cryptocurrency, you can always convert it or sell it to use it on something else.

    Currently, Coinbase is giving out $167+ worth of cryptocurrency for taking their mini-lessons. Two benefits from this are 1. earning free money, and 2. learning more about cryptocurrency!
  • Coinbase Commerce: This is a service that allows online merchants to accept cryptocurrency as a payment method on their website. This is done using a plugin that is supported by big Content Management Systems (CMS) such as Shopify, Magento, and WooCommerce.
  • Coinbase Wallet: This is an independent mobile wallet for Android and iOS where you can keep your cryptocurrencies. The user’s private key is stored in the user’s device so that only they have access to the funds in the wallet.
  • Coinbase Pro: (Also available on Android and iOS) This is a separate service offered by Coinbase where you can trade cryptocurrencies. Unlike the traditional Coinbase brokerage service, Coinbase pro is aimed at more experienced traders, while the regular brokerage service from Coinbase simplifies buying cryptocurrencies at a premium. This is why Coinbase Pro has lower fees than the regular Coinbase brokerage service. Easier interface -> costlier fees.
  • Coinbase Index Fund: This is an index fund that gives investors exposure to all digital assets listed on Coinbase’s exchange, weighted by market capitalization. Basically, it tracks the financial performance of all Coinbase-listed assets.
  • Coinbase Ventures: Investing in companies that use cryptocurrency like stablecoins to build an open financial system.
  • Custodial Services: A service for institutional investors that safeguards their cryptocurrency. All digital assets are segregated and held in trust for the benefit of Coinbase Custody clients.

How Safe Is Coinbase?

Coinbase has taken very careful measures to ensure that the safety of your cryptocurrency is of the highest quality it can provide.

Aside from providing you with secure account login methods like 2-step verification (two options for 2-step verification: SMS verification, or Google authenticator), Coinbase provides a cold storage policy where 98% of their customer’s funds are stored in offline wallets. Basically, wallets that aren’t connected to the internet.

That’s not all, all the private keys to these offline wallets have been split with redundancy, AES-256 encrypted, and copied to secured FIPS-140 USB drives and paper backups. These are then stored in safe deposit boxes scattered across the world.

Coinbase will need to collect personal information, such as personal and financial info, in order to provide you with their services. This primarily includes data that is mandated by law — such as compliance with anti-money laundering laws — or to verify your identity and protect you from potential fraudulent activity. Coinbase does not sell this information to third parties without the user’s consent. It keeps your personal information as safe as your funds.

Coinbase also hashes the passwords stored in its database by using bcrypt. They check for strong passwords on account creation and password reset. Your application credentials and personal information are kept separate from the Coinbase database and codebase.

This means that any hacker is going to find it painfully impossible to get ahold of private keys, funds, personal information, and individual accounts.

On top of all of this, Coinbase is one of the first cryptocurrency brokerages that is fully insured. As for US-resident crypto holders, this also includes FDIC insurance. Let’s also not forget that Coinbase has entered the crypto-asset custody game for institutions. So if Coinbase is being entrusted by institutional clients who hold hundreds of millions in cryptocurrency, it’s probably going to be safe for someone like you.

Note that Coinbase’s insurance only covers funds if Coinbase itself were to be compromised, not individual compromised accounts. So remember to always keep your password safe and turn on 2-step verification for your account. An account holder’s negligence to keep their account safe is not covered by Coinbase’s insurance.

Coinbase Drawbacks

Although Coinbase has great features, security, and a simple interface, it is not perfect. Just like any other brokerage, it can still make improvements. The following drawbacks are the reasons for why Coinbase has received a 3.5-star rating rather than a 5-star rating from The Nerd Finance.

  • Fees: Coinbase’s infamous fees may vary from country to country, so depending on where you’re from, the fees may be different for you than for me. I’d recommend looking at their pricing and fee disclosures to find the fees for your designated place of residence.

    Coinbase is known for having high fees, however, these fees are the expense for the simple interface that Coinbase provides for its users. It’s worth noting that Coinbase Pro provides lower fees for purchasing cryptocurrency on that platform.

    Again, the only reason Coinbase does this is that the regular Coinbase brokerage service is simplified for anyone to be able to purchase cryptocurrency without prior experience. The reason fees are lower on Coinbase Pro is simply because it is designated for more advanced users and traders, thus, the interface is more complex.

 

  • Acts as a Bank (in a way): One of the many benefits of cryptocurrency is the elimination of a third party or middleman (like a bank) that has to verify all transactions before they are processed. Coinbase, however, acts as a bank if you use it as a storage for your cryptocurrency.

    You have no direct access to your funds unless you transfer them to a digital or hard-wallet. Coinbase, in a way, is acting like a bank by not providing you with your own private key when you store your funds in it. This, in turn, takes away the benefit of a P2P system.

 

  • Slow Customer Support: Coinbase provides an extensive help section, you can find answers to commonly asked questions and other standard requests.

    When it comes to immediate issues, Coinbase provides a support number where you can call to disable your account immediately if you suspect it has been compromised. However, Coinbase does not provide any phone support with a live agent.

    If you would like to reach a live agent, you will need to contact them via email. Typically, email requests receive a response within 24-48 hours. Unfortunately, Coinbase usually provides its first response to your email request without digging deep into the issue at hand.

Who Is Coinbase Best For?

If you are new to cryptocurrency and want a simple way to start buying into it with multi-level security, Coinbase is a great place to start. More often than not, newcomers to crypto have bought their first cryptocurrency with Coinbase. 

Since the funds within Coinbase are transferable to other platforms or wallets without converting them to fiat, Coinbase is a great tool to start with if you’re just looking to buy and hold for the long run. 

If your plan is to start trading with crypto, then Coinbase Pro is a great option. There have been some reports of Coinbase having a few minor lags and crashes when huge movements are made by crypto volatility. Nonetheless, it’s a good platform to start with. 

It would not be advisable to use the regular Coinbase brokerage service to trade crypto, as it does not include the same tools as Coinbase Pro and the fees are higher.

In the past year and a half that I have used Coinbase, I have personally not had any issues with it. I have only used it to buy and hold on to my crypto, it’s worth noting that I have moved my crypto to a personal wallet so that I can have direct access to it

Feel free to leave any feedback on personal experiences you’ve had with Coinbase. Leave any thoughts or questions you still have after reading this article. I’ll be more than happy to hear and respond to them!


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32 Comments

  1. Thank you for this in-depth review of Coinbase and the detailed analysis of each unit. l will definitely jump on board and go through the paid training. It is the first fiat currency platform that pays you for taking their training. It also has a number of portfolios through which you can invest your money. l am disappointed though that it has no wallet where you can keep your fiat currency and let it grow. l hope they will be adding that function soon.

    Which wallet do you recommend for fiat currencies?
     

    1. Thanks for your feedback 🙂 actually, Coinbase does offer a wallet, it simply a separate app! It is called the Coinbase Wallet. If you don’t mind keeping your private key on your device, it would be a good option! Otherwise, I would go for a hard wallet like a ledger! And for fiat, I would simply keep it with the rest of your fiat. No need for a crypto wallet if you want to hold fiat.

  2. I was wondering why I keep hearing Coinbase everywhere, everyone’s talking about it but that makes sense now, after being one of the first cryptocurrency companies to be legally regulated and being top two out of 300 currency exchanges, man that is something! And besides being a currency exchange platform, they even offer to pay us by watching their video lessons? How is that not cool, I’m signing up! 😀

    1. It’s definitely very well trusted and has gained some well-deserved popularity. Glad this was helpful!

  3. Great article. I am using coinbase my self and I really think it is the best place to keep your investments and trade cryptocurrencies. The layout of the site is excellent and beginner friendly. You put out some key components of coinbase and I really like that. Thanks for this great review.

    1. It’s definitely a very easy platform to use and very trusted over time. Glad you enjoyed this review 🙂

  4. This is important because I always wondered how people exchange currency for bitcoin. Everywhere that I have ever heard bitcoin mentioned deals with network marketing business.  It is great to know that I don’t need to join an MLM or other forms of online businesses to buy bitcoin. Cool!

    I also like the fact that you outlined the positives and negatives of Coinbase. If I ever decide to invest in bitcoin, I know EXACTLY where to come for a proper perspective. Thanks!

    1. I’m very happy to hear this was helpful, thank you for your feedback

  5. Thank you for sharing your review about Coinbase. I agree with the fact that people count too much in what service and quality they offer. The fact that it has a good and quick service with the support customers need, makes it a reliable business and people will consider joining in future.

    All the best!

    Meena

    1. Customer support has had its fair share of complaints. However, it could be a lot worse. I’m glad this article was helpful

  6. Thanks for your nice, easy to understand review of Coinbase. I do have a Coinbase account and I started it when I had no idea what bitcoin or cryptocurrency was. I have a better understanding now, but if I were to read your review, before I started I would be more confident now and understand it a lot better. 

    I do believe that digital currency is the future of money but would be nice to have it backed by something tangible like real estate or gold or something. 

    1. I’m glad this review was easy to understand 🙂 and yes haha, in today’s era, Bitcoin is becoming the new digital gold

  7. Good review on Coinbase. I have not invested in cryptocurrency before as I find it hard to understand. Reading this review has made it slightly easier for me and as I click on the link to the coinbase website, I see there is the ‘Learn’ tab where I can further research to understand more on it. 

    And I earlier do not understand what is fiat currency so it is good that you have also written something on this and I learned that it is just the usual money. 

    One question that I have on my mind is that banks are starting to offer cryptocurrency as well, so I am wondering how will this affect such cryptocurrency exchanges like coinbase?

    1. Thanks for your feedback 🙂 if you want to learn more about cryptocurrency, we have an article here on it that explains it through! And I’m glad that you got a good gist of what fiat currency is!

      Regarding your question, I personally think it will only help exchanges like Coinbase. The benefit of cryptocurrency is that they are not controlled by a third party, banks take this away because they become the third party. Although Coinbase may act similar to a bank, it isn’t exactly one and offers other services like the Coinbase wallet, which gives its users access to their own seed phrase. I think that banks adopting cryptocurrency will lead to a higher expansion of crypto’s authority across the world. As more people learn about the benefit of not needing a third party in between, exchanges will find a lot of benefit in the growing authority. 

  8. Thank you for this review, I just start researching on Crypto currency. And find a platform like coinbase that have existed since 2012 and still happen to be the very second amidst over 300 Crypto exchanges in the world. Although you cited coinbase standing as a bank a drawback, but for as a newbie, I think I will take advantage of this u till I can find my footing. Thanks for this review

    1. Very interesting point! It can definitely be helpful for the starters. I’m glad this review was helpful 🙂

  9. Hello Misael. My compliments on this well-written article.

    My partner and I have been using Coinbase for a little over a year now and our experience has been positive. To be honest, I hadn’t done much digging into the platform itself; I didn’t even know Coinbase offered money for learning about cryptocurrencies!

    I agree with everything you say about Coinbase being a good entry point for cryptocurrency newbies. It’s a safe, efficient and trusted crpyto exchange. I’d recommend it to anyone who is starting out.

    1. Thank you for your feedback. I find it very interesting to read about the experiences of others with these platforms that are reviewed here

  10. I have being using Coinbase services for about 5 years now.  However, I was not aware of all the services they offer.  I have basically used Coinbase as a bank.  I have a wallet for one cryptocurrency on my computer and have been unable to access the currency because of a problem with the wallet software. I am old school in the sense that i like the idea of Coinbase holding my investment and having it grow.  But I recognize the value of involvement with cryptocurrency.  One thing to keep in mind is that there are hundreds of different cryptocurrencies.  Coinbase does not work with all of them.  It is important to look Coinbase over to make sure the currency one wants is in the Coinbase portfolio.  Thanks for the information.

    1. Of course 🙂 and thank you for your feedback. You are absolutely right! And yes, some people do prefer to transfer the hassle of holding their crypto over to Coinbase

  11. Coinbase sounds like a good place to go for beginner purposes. There is a lot to do with security and I have heard they have great reviews about it. This review explains their caution and all their extra features that can be very useful if you are getting involved with crypto. Much appreciated.

    1. Of course 🙂

  12. Great post! I was reading before about CoinBase a bit and to be fair opinions were really mixed. Also site and earning methodology may be overwhelming at the beginning. Thank you for putting it clear and transparent. I think it will be great starting point to get more familiar with cryptocurrency world.

    1. Glad this was helpful 🙂 I appreciate the feedback

  13. Hello. Good day. Thanks for this great article on coinbase. Have learnt form this. Knowing that it acts as a bank. I’m okay with that. And also the other features it has too are cool. The article is good . Thanks for showing more light on coinbase. Thanks a whole lot. Hoping to see more reviews from you, you’re actually thorough with them, so thank you

    1. Thank you! I’m glad this was useful

  14. I actually use coinbase myself! I have about 150 dollars in there and it grows about 10 bucks a day, much better than any savings. In fact, crypto is growing faster than ever. I basically toss everything i’m not spending into the market rn lol with a few dollars in savings. People used to talk about how the dollar is stable, but if you’ve seen politics i’d RUN from investment in the petrodollar. Even the IRS has become scared that citizens aren’t trying to pay taxes.

    1. Well, always keep in mind that cryptocurrency is very volatile. While I am bullish of it in the long run, I still wouldn’t put everything I’m not spending in there, simply because of the high volatility. Take a look at XRP for example. However, I’m glad that you’ve seen positive numbers thought!

  15. Hi! I have been on the Coinbase platform and I must agree it is one of the better platforms.
    I appreciate how you have broken down the pros and cons of the platform. I have tried trading cryptocurrency and forex before and it is not a good fit, I marry the trade and that leads to me staying too long and of course, I don’t make money I lose money.
    I am glad I did do trading. I have a very small amount ( less than 1 Bitcoin) of bitcoin that I at bought $ 7 500 per Bitcoin so my money, for a change, has grown more by chance than by wisdom.

    1. Ah, I see, well I appreciate your feedback it! And yes, sometimes speculation leads to more losses than wins. I’m glad that you’ve at least made some money, even if it’s just by luck!

  16. This post is very insightful and timely. Cryptocurrencies are here to stay and I’ve been looking to get more knowledge on them and how to buy them.

    With this post, I’ve gained a lot of insight on Coinbase. I didn’t know it’s so highly rated on safety. It’s so safe to transact on here.

    Thanks again 

    1. Glad this review was helfpul 🙂

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