At the moment Coinbase is the world’s biggest Bitcoin broker. It offers plenty of benefits that draws a lot of investors to their platform. It’s the most recommended digital currency broker, due to its simplicity.
The user experience is very smooth. The banking partnerships of the platform allow for the transactions to be made with any major credit card, Paypal, EFT, SWIFT, etc. For this reasons only, Coinbase had very rapid growth, and they exchanged around $4 billion worth of Bitcoin.
But, it also has a very bad rep, that’s why people can’t help themselves but wonder, why is that the case? Let’s take a look at everything we know about Coinbase so far.
Is it safe?
Coinbase is based in San Francisco, and it’s backed by trusted and well-known investors, like – Blockchain Capital, Digital Currency Group, Bank of Tokyo, and Alexis Ohanian.
But, still, one has to wonder how they will keep its wealth safe. Well, for starters the customer funder are segregated from the company’s funds. All customer funds are in custodial bank accounts. What this means for us is that they don’t use the money of customers to operate their business.
Customer funds can’t be claimed by Conbaise or the creditors. Customer funds are returnable to their rightful owners, and no one else can claim them. Almost all customers’ funds are stored in the offline cold storage.
The cryptocurrency funds are held on multiple paper and hardware wallets. The physical part of the wallets is stored in vaults around the world. So it’s safe to say that the money you invest will be safe from hackers.
The US customers who use Coinbase’s USD wallet even have insurance. But, even with all these security measures, it’s always recommended to keep all your crypto’s in an offline cold storage wallet only.
How does it work?
As you already saw for yourself, the interface of Coinbase is extremely simple. Even if you’re a first-time buyer, you won’t have any issues using the platform. All you need is a credit or debit card, and you can start transferring money.
Even the bank transfer is possible. After you create your account, everything will go as smooth as butter.
The payment method depends on the country you’re in. Currently, over 30 countries worldwide are supported. Fees also depend on your country of origin, going from 1.49% up to 3.99%.
These are only estimated fees and may be different at the time you are reading this.
Most of the countries support credit and debit card payments, but in some only bank transfer is an available option.
European countries supported are – Austria, Bulgaria, Belgium, Cyprus, Croatia, Czech Republic, Denmark, France, Finland, Greece, Hungary, Italy, Ireland, Liechtenstein, Latvia, Monaco, Malta, Norway, Netherlands, Portugal, Poland, Romania, Slovakia, San Marino, Spain, Slovenia, Switzerland, and Sweden.
What about privacy?
Since the main point of cryptocurrency is decentralization and the preservation of identity, this is a hot topic regarding all exchange platforms. Coinbase requires the verification of your identity and a lot of personal details.
IF you want to purchase Bitcoin with your credit card, you will be required to take a picture of your passport or other identification. Your account level depends on how much information you provided.
And the limits depend on the level of your account. If you’re a fully verified user, you can buy up to $50k worth of Bitcoin each day.
The time for the bitcoins to appear in your wallet after the purchase doesn’t depend on how much of your info you provided, but only on your country of origin and the payment method.
For US customers that use credit or debit card, the transfer is instant when the ID verification is completed. For those that use bank transfer, they might wait up to 5 business days.
Canada’s EFT purchases can take up to 4 days, while Interac Online purchases are made instantly.
European customers that pay with SEPA will receive their cryptos after 3 days at most.
There has been a lot going on about Coinbase, and this is possibly the most important section of this review.
So far there have been 5 major things that brought Coinbase to bad light.
- You can almost say that the biggest issue for customers with Coinbase are closed and frozen accounts. They are the first platform that received US regulatory approval. This means they pretty much operate like any bank. They implemented anti-money laundering and ‘know your customer’ practices. Bitcoiners have a lot of problem with that because privacy is their top concern.
- The number of complaints seems to be higher than in any of the Coinbase’s competitors. But, this may be due to the highest number of customers. The support staff takes up to 48 hours to close a ticket, and sometimes people take their outrage to social media.
- For many Bitcoiners the banking system is the worst thing on this planet. That’s why they created a bad reputation for Coinbase due to its close ties to the Banking establishment.
- When it first started operating, Coinbase had an affiliate program, where you would be rewarded $75 for each new customer you bring to the platform that buys $100 worth of Bitcoin. A lot of people invested their time in this system, while Coinbase shut it down without warning.
- The philosophy of Bitcoin is to be open source. This is why the supporters of its philosophy still hold their grudge for Coinbase due to its patents. These patents include the exchange of bitcoin, hot wallet for holding Bitcoin, etc.
To summarize everything we know so far, we could easily make a pro/con list for Coinbase.
- It’s very easy to understand it
- Very simple UI is great for first-time users
- It has low fees compared to the competition
- It supports instant buy with a credit card
- High buying limits
- You can’t control your private keys
- The accounts are monitored
- Customer support is not that great
- Controversy issues
So, the main question is – should you use Coinbase at all? Well, it shouldn’t act as your wallet. It seems that it attracts more investors than clients. And since you don’t control the private keys, you don’t really own any bitcoin.
It depends on you, if you strongly believe in Bitcoin’s philosophy, you should consider Coinbase’s actions, but if you just look for a way to earn some quick money, you can give it a go.