Coinbase

Coinbase is rapidly becoming the N.1 BTC exchange on crypto-market since they had add the web wallet and mobile App for iOS and Android for more comfortable use. This company operates from California and It might became dominant exchange platform of the future. It already operates exchanges of BTC, ETH, LTC and other digital assets with fiat currencies in 32 countries, and BTC transactions and storage in 190 countries worldwide.It really is a fantastic service considering how simple the process is.

What’s Coinbase all about?

Coinbase --  co-founded by Brian Armstrong and Fred Ehrsam -- is one of the oldest ‘retail outlets’ for digital currencies. The San Francisco based company has been in the game since 2012. At the time of writing this, it has been six solid years of business.

Over the past two-three years, Coinbase has received an overwhelming number of users.  In 2018 alone, if every user who had a Coinbase account was awarded a single bitcoin, there would not be enough bitcoins in the world for every user, given that Bitcoin is capped at 21 million – so far, 17 million bitcoins have been mined (around 80%).

In 2017, Coinbase had attracted a user-base of more than 13 million; now (Q4, 2018), it has over 25 million users.  According to statistics gathered by Altana Digital Currency Fund, Coinbase is getting an average of 25,000 users per day -- as reported by Alistair Milne.

Fees:

As for Coinbase, the fees payable depend on where you are located, and the payment method you have chosen to use.  For every transaction you will you initiate at Coinbase, you will pay a fee; this fee will depend on how much you are transacting.

Here is how the fees are structured at Coinbase:

1. $0.99 for transactions adding up to $10.99, and below.
2. $1.49 for transactions between $11.00 and $26.49.
3. $1.99 for transactions between $26.59 and $51.99.
4. $2.99 for transactions between $52.00 and $78.05.
5. A flat fee of $2.99 for transaction ranging between $78.05 and $200.

For purchases above the $200 limit, a variable fee of 1.49% kicks in for standard purchase (for bank account or USD wallet). Credit card and debit card purchases will attract a rate of 3.99%.   As if that is not enough, Coinbase slaps U.S. consumers with a fee of 4% for every transaction.

Even so, for American Citizens, ACH transfers are free when depositing funds while bank transfers are $10.  However, if you withdrawal to the bank, the charges are $25.  If you are in Europe, there are zero charges when depositing funds.

Date and place of establishment: 20. June 2012, USA

Country of origin: USA

Verification:

1. After creating an account on Coinbase you will be asked to verify your identity via:
2. Payment verification
3. Address verification
4. Phone number verification
5. ID verification
6. They will demand access to your webcam to face match your ID

Limits:

1. Limits depend on your account level,coinbase account age, your buying history and activity, level of verification and place of your residence.
2. Fully verified US users - up to $50,000 worth of bitcoin daily.
3. Level 2 users - with instant buy are able to instantly buy up to $100 worth of bitcoin per week
4. European customers may have a maximum of €30,000 euro in their account at any time.
5. To increase your limits you will need to verify your bank account, credit/debit card, ID.

History

Coinbase is among the leading crypto Exchanges on the market. It has an impeccable reputation, no wonder many beginners find themselves there.  The platform is more of a retail store for digital currencies as it operates differently from other platforms that follow a forex or stock Exchange model.  In short, you buy cryptocurrencies listed directly from the platform whereas in cases like for Gemini, you trade the digital currencies with other peers.

Coinbase was founded by Brian Armstrong and Fred Ehrsam, back in 2011; the cryptocurrency Exchange is based in San Francisco, California. Just to see where Coinbase is at recently, the Exchange is valued at 8 billion (as of this writing); In contrast, Brian Armstrong, Coinbase founder, is now a billionaire – with a current net worth being 1.3 billion, a notch higher from $900M earlier this year. Although it lacks advanced features that you would find in Exchanges like Coinbase Pro, a sister website to Coinbase, many people love it because they find it beginner-friendly.

Deposit method used

The payment methods accepted at Coinbase differ with your place of residence.  They accept three main methods:

• Deposit via bank account.  This is good for both small and large amounts; the transaction takes 3-5 business days.  If you are in the U.K. or Europe, you have the SEPA transfer option while those in the U.S can use ACH?
• Debit. This approach is instant as long as you have verified your Coinbase account. It is recommended for small investments.
• Via wire transfer.  This method can only be used to deposit and withdrawal money to your Coinbase account; not to buy crypto.

Coinbase Pros

• Great reputation in the industry.
• Tight security measures for funds and user info.
• Various digital coins listed.
• It is beginner friendly.
• Offers wide deposit methods.
• High trading volume.
• Gemini has a higher purchase limit compared to Gemini.
• Insurance of digital coins deposited.

Coinbase Cons

• You have to verify your account.
• Coinbase collects user’s info while monitoring their accounts.
• There are complaints regarding their customer support reliability and slowness.
• Delay of funds at times.

Coinbase customer reputation

When it comes to customer reputation, Coinbase sure gets a mixture of the good and the ugly.  While many customers seem to find a home at Coinbase, some are furious that Coinbase services are no longer satisfactory.  Some customers believe Coinbase is headed to the dogs. I did massive Internet digging on Coinbase, and there are countless negative reviews about this company.  If you go through Coinbase reviews on Trustpilot or platforms like Reddit, they are tons of dissatisfied customers.

Specifically, the major issues seem to revolve around freezing of accounts, disabling withdrawals,  privacy long wait-times for various deposit and withdraw methods, and of course, the terrible customer support. 

A number of customers have had their funds put on hold by Coinbase after the deposit had been processed.  Others report to have lost money in Coinbase, and when they eventually reached out to Coinbase, the Support kept taking them in circles.  For those who lodged complaints about loss of cash, it took Coinbase like forever to find/return the ‘lost’ funds. 

All in all, Coinbase still commands a massive following.  Perhaps that’s why its customer service is dragging behind but that should be no excuse. Despite the unsatisfied comments, Coinbase is the number one place to exchange fiat money with crypto.

On a scale of 1-5, I would give Coinbase a solid 4.0 stars.  That’s because the company needs to improve in some critical areas. Still, do not shy away from trying out Coinbase because your experience can totally be different from mine’s or another person. You could start off with a small balance.

Who should use Coinbase and why?

Coinbase is best suited for the early crypto adopter. When most users want to get a hold of digital currencies for the first time, a majority of them turn to Coinbase.  When it comes to buying crypto with fiat money, the options are limited. Beginners seem to like Coinbase because - once you have verified your Identity, buying cryptocurrencies using fiat currency is straightforward.  Still, that does not mean that the average or experienced trader will shy away from Coinbase. If you are a veteran, you may like the premium service offered on Coinbase Pro - you get to view advanced trading features like depth charts, candlestick charts, and market data feeds.

Coinbase security

Although Coinbase is a centralized exchange, governed by KYC/AML laws, it seems strict with matters related to account and funds security.  The Exchange has rolled out strict security measures to keep your funds, and the information you provide secure. Having been a victim of numerous account hacks, and following the fate that befell MtGox Exchange in 2014, Coinbase is sure not taking any chances.

Let’s look at some of the security measures Coinbase has established:

• Coinbase holds customers’ funds in offline cold storages.
• You get to set 2-factor authentication for your account as an additional security layer.
• Coinbase does not hold sensitive data on online servers.
• The Exchange encrypts data with AES-256 algorithm; furthermore, this data is “copied to FIPS-140 USB drives and paper backups. Just like funds are stored at geographically distributed locations in vaults and safe deposit boxes, the same is done to the drives and paper backups.
• All website traffic passes through an encrypted SSL protocol (https).
• Coinbase uses AES-256 encryption to secure wallets and private keys.
• All employees are made to undergo a criminal background check when being hired.
• For every device and service, Coinbases employees use a separate password and two-step verification.
• As a rule, every employee has to use a strong password combination, they have to encrypt their hard drive, and enable a screen lock.
• To prevent CSRF attacks on its site and application, Coinbase uses SQL injection filters “to verify the authenticity of POST, PUT, and DELETE requests”. Also, to monitor the variety of actions happening on the site, including limiting actions lie login attempts, and so on.
• Still on applications, Coinbase whitelists attributes for all models – this helps “prevent mass-assignment vulnerabilities.
• All passwords stored on their database are hashed. They use hashing application known as bcrypt with a Key Factor of 12.
• They check whether passwords used by users are strong.
• Coinbase keeps application credentials separate from their database and code base.

Apart from the above security measures, Coinbase now provides insurance cover for all digital coins held in their online wallets.  If somehow Coinbase was to lose funds due to a security breach, the insurance policy would cover for any funds stolen.  Remember: only 2% of customer funds are held on their online storage.

When it comes to fiat balances, your funds are eligible for an FDIC insurance cover if they are held at a Coinbase USD wallet.  You get an insurance cover of up to $250,000 if you are a U.S. customer.  Furthermore, all fiat currency held is stored in segregated custodial bank accounts or in U.S. Treasuries for American citizens – this means, even if Coinbase was to go under, you would still get your money back.  And have you heard about Coinbase Bug Bounty program?  This is a program that specifically rewards anyone who identifies a security vulnerability related to software at Coinbase.  This measure enhances the security of customer info and funds (both digital and fiat balances).  The Bounty figure ranges between $1,000 and $11,000.  So far according to statistics gathered (as of this writing), 398 reports have been resolved, 283 hackers thanked, and Coinbase has already spent $290, 381 on this program. You can learn more about the Bounty program on this page.

Coinbase Privacy concern

Coinbase complies with AML and KYC regulations. So, they will ask you to give them your personal information, and sometimes they will go hunting for it from third parties. Given the amount of information they collect from their customers, you don’t get any privacy or anonymity when you use Coinbase.  They monitor each and every action you take when using their services.

Here is the kind of information Coinbase collets:

• Private ID information such as: your name, place of birth, nationality, your photo, gender, etc.
• Your residential information: drivers license, ID number, Passport number, SSN, and visa info.
• Your employment information.
• Your financial information.
• Your transaction information in their platform
• Coinbase also tracks your online IP address, the type of browser you use and so on.