Last Updated On November 16th, 2018

Coinbase is the number one Bitcoin broker in the world and offers cryptocurrency investors a simple, streamlined, and intuitive method of purchasing BTC in addition to a small selection of other highly popular cryptocurrencies. While it may be a forgiving platform for newer traders, getting started can be somewhat complicated. In this Coinbase review, we’ll attempt to answer some of the most common questions regarding the platform, such as:

  • What is Coinbase?
  • Is Coinbase Safe?
  • How does Coinbase Work?

We’ll examine the Coinbase fees, assess Coinbase ID verification, and analyze the various features the platform offers to help you get started. We’ll also provide a basic guide on how to use Coinbase, how to sign up, how to wire money to Coinbase, and how to buy cryptocurrency.

Coinbase Overview

Coinbase is an online cryptocurrency broker and is not an exchange. It’s important to make this distinction, as it doesn’t make it possible to trade cryptocurrency with other users. Instead, Coinbase is focused primarily on assisting users with the process of converting fiat currency to cryptocurrency.

Coinbase boasts a user base of more than 10 million customers, supports 32 different countries, and has exchanged more than $50 billion USD worth of digital currency. The platform is supported by extremely robust security architecture and provides strong reliability.

The biggest draw of the platform is that it’s extremely easy to use. Instead of confusing newer users with complex trading interfaces, Coinbase simply presents a range of different purchasing methods and a minimalist wallet summary.

coinbase statsCoinbase was founded in 2012 by partners Brian Armstrong and Fred Ehrsam and is based out of California. The platform launched with the assistance of a significant amount of venture capital support, gaining investors such as Andreessen Horowitz, Ribbit Capital, and Union Square Ventures. Coinbase was the first cryptocurrency platform to achieve a total market value of more than $1 billion USD.

Coinbase launched an exchange platform in 2015 called “Coinbase Exchange”, but this platform has subsequently been rebranded to GDAX and deserves an entire guide to itself. In this guide, we’ll focus solely on the platform.

Coinbase works closely with regulatory bodies around the world and is one of the only cryptocurrency exchanges to possess a BitLicense, which is a business license that allows an entity to perform virtual currency activities in the strictly-regulated New York cryptocurrency environment.

As it boasts a high trading volume for both Euro and GBP based cryptocurrency purchases it delivers a lower spread and lower fees, but using payment methods such as credit or debit cards via Coinbase can be relatively expensive. It does offer a wide range of low-cost alternative methods to add funds, however, which change depending on the region of the user.

Overall, Coinbase is the ideal starting place for newer crypto investors interested in getting involved in the cryptocurrency market and is also frequently used by intermediate traders seeking a simple method to convert fiat currency directly to cryptocurrency.

Coinbase Signup & Identification

Coinbase is based in the United States as a regulated financial services company, which is what allows it to offer seamless, instant cryptocurrency purchases via debit or credit cards and bank payments. This benefit, however, comes at the cost of a stringent verification process— in order to buy cryptocurrency with Coinbase, you’ll need to provide some identity documents and verify your phone number.

It is possible to simply set up an account with Coinbase and use it as a wallet, but to ensure the platform is in compliance with Know Your Customer and Anti-Money Laundering laws, Coinbase will want to verify your government-issued ID. You’ll also need to upload a “selfie” photo of your face, as it uses innovative Jumio NetVerify software to verify physical IDs in real-time.

coinbase verification
The Jumio Netverify solution employed by Coinbase for ID verification

While this feature is relatively innovative, neither Coinbase or the Jumio solution they employ to verify user ID cannot keep up with the massive amount of demand for new user accounts. This has led to Coinbase verification time frames stretching out to weeks, with “Coinbase pending how long” charting as one of the most popular search terms regarding the platform.

id verification
The Coinbase status report incident page consists almost solely of ID verification delay issues

While Coinbase keeps “resolving” these delays, they are still occurring. Although it may take some time to get verified on Coinbase, it’s definitely worth the wait as it’s one of the easiest and most cost-effective ways to purchase Bitcoin and several other cryptocurrencies with fiat currency.

Deposit & Withdrawal Methods

Deposit and withdrawal methods for Coinbase users vary depending on the country of the user, and can quickly become complex. The instant buy is one of the most popular “deposit” methods and allows users in most countries to purchase cryptocurrency with a credit or debit card instantly.

We’ll proceed to break down the payment and withdrawal methods available by country:

US

US-based Users:

  • Bank account ACH Transfers for buying, selling, deposits and withdrawals with a speed of 4-5 working days
  • Debit and credit card purchases for instant buying only
  • Wire transfer for depositing or withdrawing currency, but not for buying or selling. Wire transfers to Coinbase take 2-3 days to complete
  • Paypal for quick instant sells

EU UK

Europe-based and UK-based Users:

  • SEPA transfer for depositing or withdrawing. Note that before withdrawing from Coinbase to a European bank account, you’ll need to have performed a successful SEPA deposit to your Coinbase account first. SEPA transfers both in and out of Coinbase accounts take 1-3 business days
  • Debit and credit card purchases for instant buying only

AU CAD

Australia-based and Canada-based Users

  • Debit and credit card purchases for instant buying only

Singapore-based Users:

  • Xfers-processed bank transfers that require SMS one-time password and Singapore government-verified ID for both adding funds and withdrawals. Xfers transactions take 2-3 business days to complete
  • Debit and credit card purchases for instant buying only

Supported Currencies

Coinbase currently supports the following cryptocurrencies:

  • Bitcoin (BTC)
  • Litecoin (LTC)
  • Ethereum (ETH)
  • Bitcoin Cash (BCH)

Coinbase supports EUR, GBP, USD, and AUD through the payment methods outlined earlier in this guide. Does Coinbase support Paypal? Yes— but only for selling, not for buying, unfortunately.

Coinbase Fees

As with deposit and withdrawal methods, Coinbase fees are convoluted, complex and vary by country. Using Coinbase wallet services incurs no fees, and there are no additional fees outside of standard network fees when transferring cryptocurrency in and out of Coinbase wallets.

It makes it extremely easy to purchase a cryptocurrency and calculates exchange rates as determined by the GDAX exchange platform with an additional spread of 25 to 100 depending on the size of your order and a number of other factors.

Many guides present a simple breakdown of Coinbase fees but fail to explain the specifics of how Coinbase fees work. We’ll now proceed to break down the Coinbase debit card fee, the Coinbase Credit card fee, and the Coinbase wire transfer fee for each country the platform supports:

It charges two different sets of fees. The first set of fees are referred to as “Method 1”, and are applied to transactions below $200 in value. The second set of fees are referred to as “Method 2”, and are applied to transactions over $200 in value.

coinbase fee method 1
For transactions under $200 in value

US-based Users:

Note that all transactions for US users are subject to a 4% base rate fee in Method 1 in addition to the following fees:

  • Bank account transfers for purchase: 1.49% with a $0.15 minimum
  • ACH Transfer deposits: Free
  • Cryptocurrency purchases or sales made with USD from the Coinbase USD wallet: 1.49%
  • Instant credit or debit card purchases: 3.99%
  • Paypal sells: 3.99%
  • Wire transfer deposit: $10
  • Wire transfer withdrawal: $25

Europe-based and UK-based Users:

  • Standard buying or selling: 1.49%
  • Instant buys via credit or debit card: 3.99%
  • SEPA Bank deposits: Free
  • SEPA Bank withdrawals: €0.15

Australia-based and Canada-based Users

  • Debit and credit card instant purchases: 3.99%

Singapore-based Users:

  • Standard buying or selling: 1.49%
  • Debit and credit card instant purchases: 3.99%
Coinbase Fee Method 2
For transactions over $200 in value

Transactions over $200 in value are subject to the Coinbase “Method 2” fee structure, which is a 1% variable fee. This fee has a minimum of $1 and a maximum of $50 and is almost identical to the Method 1 structure.

This method can be somewhat deceptive, however, as virtually all transactions are subject to a “variable fee”— of between $1 and $50— in addition to a fixed fee of 2.49%.

All debit card or credit card transactions made in any country on Coinbase are charged both the variable fee and the fixed fee.

US-based Users:

As with the previous “Method 1” fee structure. all transactions for US users are subject to a 4% base rate fee.

  • Bank account transfers for purchase: Variable fee
  • ACH Transfer deposits: Free
  • Cryptocurrency purchases or sales made with USD from the Coinbase USD wallet: Variable fee
  • Instant credit or debit card purchases: Variable fee and fixed fee
  • Paypal sells: Fixed Fee
  • Wire transfer deposit: $10
  • Wire transfer withdrawal: $25

Europe-based and UK-based Users:

  • Standard buying or selling: Variable Fee
  • Instant buys via credit or debit card: Variable Fee and Fixed Fee
  • SEPA Bank deposits: Free
  • SEPA Bank withdrawals: €0.15

Australia-based and Canada-based Users

  • Debit and credit card instant purchases: Variable Fee and Fixed Fee

Singapore-based Users:

  • Standard buying or selling: Variable fee
  • Debit and credit card instant purchases: Variable Fee and Fixed Fee

Coinbase Limits

Coinbase buy limits aren’t clearly defined on the website itself, but vary depending on a number of different factors. Coinbase limits are largely defined by the amount of cryptocurrency a user has purchased, the age of their account, and payment methods used.

The Coinbase instant buy limit is heavily influenced by KYC and AML laws and is generally set at $250 worth of purchases daily. In order to increase your Coinbase credit card limit, you’ll need to verify your identity, confirm your phone number, and establish a long purchase history. Coinbase withdrawal limits are managed in the same manner.

coinbase limits
Coinbase limit management with limit increase instructions

It also makes it possible to apply directly for an increase in account limits, but state specifically on their website that limits are calculated automatically and cannot be changed manually by the Coinbase team.

Coinbase Security

Is Coinbase safe? In the world of cryptocurrency, security is one of the most important factors to consider. With high-profile hacks such as the Mt. Gox disaster resulting in the loss of millions of dollars worth of user capital, it’s important to understand how a cryptocurrency platform handles your funds.

coinbase security

With “Is Coinbase safe 2018” one of the most-searched terms of the year, it’s clear that users are keenly interested in how secure the platform is. Is Coinbase a wallet? The answer is yes— a “hot” wallet. Cryptocurrency wallets consist of a private and a public key— any platform that manages your private keys for you is considered a hot wallet, as opposed to a secure, offline cold wallet.

As it is fully licensed in the US and across the world it works closely with regulatory bodies and is thus subject to frequent audits of its financial operations and reserve management practices. To date, it has never been hacked, although individual Coinbase users have been caught by phishing scams.

Coinbase holds less than 2% of all user capital online at any given point in time. The remaining 98% is held offline in highly secure multi-signature offline cold wallets. This capital is distributed internationally and is extremely resistant to any kind of cyber attack.

One of the most compelling security features offered by Coinbase is that all online funds are covered by insurance. If Coinbase were to be compromised, any online capital lost would be covered by an insurance policy that would pay out any users that lost money.

Note that this insurance policy covers only breaches of physical security, cyber security, or by employee theft. Individuals that experience the loss of capital due to their accounts becoming compromised are not covered by this policy. US-based users benefit from Coinbase FDIC insured wallets that cover them up to a maximum of $250,000.

Is Coinbase secure? The 2-step verification that adds a layer of extra security on all accounts makes Coinbase accounts extremely secure. When performing account actions, users are required to enter a one-time code from their mobile phone, which makes it harder for malicious individuals to gain access to Coinbase accounts.

2 factor authentication

In addition to comprehensive insurance and several security layers, Coinbase also maintains the following practices to keep user capital safe:

  • SSL encrypted web traffic
  • Wallets and private keys stored with AES-256 encryption
  • Exhaustive employee background checks
  • SQL injection filters and CSRF protection
  • Site action observation and limitation
  • Bcrypt hashed password storage
  • Strong password requirement on account generation
  • Data segregation— code base is kept separate from database and application data

Is Coinbase trustworthy? Most definitely so. While it’s impossible to guarantee that any hot wallet solution is absolutely hacker-proof, Coinbase is likely one of the safest online crypto platforms. For those interested in determining whether Coinbase is legit about their security practices, it’s possible to participate in the HackerOne Coinbase Bug Bounty program, which has paid out more than $200,000 to white hat hackers helping to penetration test the platform.

Coinbase Features

Coinbase offers newer investors the easiest way to purchase cryptocurrency quickly and easily, but also offers a range of other features. The Coinbase app is a secure mobile Bitcoin wallet available for both Android and iOS that delivers virtually all of the functions available on the full Coinbase website.

ios app
The Coinbase iOS app

The Coinbase iOS app A convenient feature offered by the Coinbase mobile app is the ability to quickly send currency to other wallets or merchants that accept cryptocurrency via QR codes. Merchants are able to use Coinbase to accept payment in Bitcoin— a solution already in use by Expedia. The most interesting feature that Coinbase offers, however, is the Shift Card.

The Coinbase Shift Card is a cryptocurrency debit card available exclusively to US-based Coinbase account holders. The Shift Card hasn’t yet cleared all of the regulatory hurdles required to be issued in all states but is available to account holders that residue in the US states listed here.

A Shift Card works just like any other Visa debit card and allows users to spend cryptocurrency instantly, converting BTC into fiat currency anywhere in the world that accepts Visa. The card is accompanied by a smartphone app that helps users manage spending, view transactions, and add funds to the card.

The Shift Card daily limit is currently set at $1,000, but it is possible to increase this limit by contacting Coinbase directly. Shift Card ATM withdrawals limits are $200 daily. The Shift Card is extremely competitively priced, at just $10 for issuance or replacement.

Domestic transactions in the US are free with a 0% BTC conversion fee, but international transactions are charged at 3%. Domestic ATM withdrawals incur a fee of $2.50. International ATM withdrawals are set at a competitive flat rate of $3.50.

Customer Support

Coinbase offers a high level of customer support when compared to most cryptocurrency platforms like Binance, delivering assistance via an email ticketing system, Twitter updates, and even 24/7 phone support. Despite offering multiple support channels, the platform still experiences high delays due to the sheer volume of new users that have established accounts in the last year.

While Coinbase does offer phone support, Coinbase phone support agents are only able to assist with general inquiries regarding the platform and cannot assist users with account-specific questions. Coinbase has a dedicated support Twitter that provides general updates regarding site status, but recent user reports show that email response times are still in excess of 7 days.

Ease of Use

Coinbase provides an elegant, clean user interface that makes it easy for new investors and traders to get started quickly. The platform is free from the complex trading views that are present on other exchanges, and instead delivers a streamlined overview of wallet holdings and current market rates.

dashboard
The Coinbase Dashboard

The Coinbase Dashboard The Coinbase dashboard provides a quick breakdown of the current market status of the four cryptocurrencies that the platform currently supports, along with a simple chart view. Users are able to quickly switch to the Buy/Sell screen, which provides a selection of different payment options.

Wallet management with Coinbase is extremely simple. Wallets are presented in a streamlined fashion on the left side of the account management page, with a list of transactions on the right. Clicking any given transaction will provide a full breakdown of the transaction addresses, fees, and status. Sending or receiving cryptocurrency via this interface is similarly intuitive, and can be setup with two-factor authentication to enhance security.

coinbase wallets

Overall, Coinbase is arguably the easiest cryptocurrency platform for any investor to get started with, and offers an extremely forgiving user interface.

Getting Started With Coinbase

In this section, we’ll present a step-by-step explanation of how to open a Coinbase account.

1. Account Registration

Opening an account with Coinbase is relatively straightforward and simple. In order to create an account, new users must register with a first and last name, email address, and password. This is all that is needed to register, but ID verification is needed at a later stage of the registration process.

Coinbase users must be 18 years of age or older, must agree to the User Agreement and Privacy Policy, then confirm that they are not a robot with a reCAPTCHA. Soon after registration, users will receive a verification email in order to complete their registration.

2. Profile Details

After registering an account and activating via verification email, users will gain access to their Coinbase account. From here, it’s necessary to provide more information and identity data to access more services. The more identity information provided, the more services are available.

Verified accounts are able to purchase Bitcoin and other cryptocurrencies directly with a credit or debit card. At this point, Coinbase asks for a mobile phone number that can be used for SMS verification, as well as identity documents such as passport or driver’s license for identification purposes. At the final step of this section, users will select the payment method they wish to use.

3. Fund Your Account

Depositing funds into a Coinbase account can be performed via any of the methods outlined previously in this guide. If you’re eager to get started with investing in cryptocurrency and don’t want to wait that long, it’s possible to use a credit or debit card to purchase cryptocurrency on Coinbase.

Once your account has funds, you’re ready to get started with buying and selling crypto!

Buying Cryptocurrency on Coinbase

You can purchase Bitcoin on Coinbase with a linked bank account, a SEPA transfer, or quickly and efficiently with a credit or debit card. We’ll proceed to explain how to use a credit or debit card to purchase cryptocurrency on Coinbase over the following step-by-step guide:

1. Navigate to Settings

Once you’ve created an account and verified your identity by uploading photo ID, you’ll need to navigate to the “settings” link in the navigation menu. Under settings, click “Payment Methods” to bring up payment method options.

2. Add Credit/Debit Card

In the “Payment Methods” section, you’ll be able to add a credit or debit card. Click on “Add Payment Method” and select “Credit/Debit Card”. From here, fill out the specific details of your chosen card. You’ll need to run through a short card verification process.

3. Buy Bitcoin

In order to purchase Bitcoin, you’ll need to visit the “Buy/Sell” page. On this page, you’ll see a widget that allows you to purchase Bitcoin. Simply select the amount you wish to purchase and click “Buy Bitcoin Instantly”. At this point, you’ve purchased your Bitcoin!

4. Withdraw Your Cryptocurrency

Coinbase has a strong security record, but if you’ve invested a significant amount of capital in cryptocurrency or want to ensure that your crypto is truly safe, it’s best to withdraw it to a cold wallet solution.

Navigate to the accounts page and click the “Send” button under your BTC wallet. You’ll need to enter a valid address— if it’s a valid address, you’ll see a green notification in the address bar. Enter the amount of BTC you’d like to send and click “continue”, following the prompts until your transaction is complete.

If you’d like to ensure that your Bitcoin is completely secure, hardware wallets such as the Trezor or Ledger Nano S are completely impervious to hacking attempts and are relatively simple to set up and use.

Trezor

Final Thoughts

In this Coinbase review, we have discovered that overall, Coinbase is the best place for new cryptocurrency traders and investors to get started with. The streamlined, simple interface and no-nonsense approach the platform offers is ideal for new cryptocurrency buyers. If you’re looking for a place to get started in the crypto market, Coinbase is the right choice.

Additional Resources