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Coinbase Review: Pros, Cons (free bitcoin for new users)

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The Bottom Line: Coinbase is one of the largest cryptocurrency trading sites, and newbie-friendly platforms available. Its debut was in 2012, making it a crypto trading pioneer that has gained the trust of its users.

coinbase logo

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Best Crypto Exchange

AT A GLANCE

  • Most reputable crypto exchange
  • Secure crypto storage
  • Protected by insurance
  • Over 56 million verified users

Overall Rating


Must trusted crypto exchange

Pros & Cons

Pros

  • Coinbase is simple to use when registering a new account.
  • It’s an established presence and has earned the trust of the community.
  • It's security rating is great and keeping users’ funds on cold storage makes it impossible for hackers to steal much during a hack.
  • By offering users built-in crypto wallets, part of the difficulty many newcomers face when dealing with crypto disappears, as Coinbase takes control of the process.
  • Transactions within the site are instant. All purchase prices are locked on a purchase, even if funds take days to clear.

Cons

  • Coinbase offers few ways to deposit money or cash out in general. Depending on your area, you might be down to only one method that works.
  • While you can spend your crypto from Coinbase’s wallet, the site tracks what you spend it on – and can suspend your account if they don’t like it, regardless of legality. Anonymity is nonexistent.

An important detail about Coinbase is that it works as a broker – that is, it doesn’t buy and sell cryptocurrencies, but instead, it works as trade facilitators. 

When you buy or sell crypto on Coinbase, you are using a platform that is credible and liquid.

However, unlike other brokers, its system is straightforward enough that you can buy cryptocurrencies in minutes, as you need it.

This is why it has become the first stop for many newcomers to crypto trading.

Some people swear by it because of its safety, however, since most crypto stored on Coinbase is kept offline, and therefore impossible to steal via a hack.

However, concerns have been raised about the company monitoring how people spend crypto.

Coinbase is even known for acting as a bitcoin police and closing accounts if users spend crypto for transactions deemed unwholesome, regardless of legality.

Coinbase logo

Quick Summary

Account Minimum: $0

Fees: 1.49% per trade

Promotion: Offers $10 free bitcoin to new users

Who are the people behind Coinbase?

Coinbase Team

Origins and leadership

Coinbase is based in San Francisco, USA, and was founded back in 2012 by Brian Armstrong and Fred Ehrsam.

It's current CEO is Brian Armstrong, with Fred Ehrsam serving as part of the board of directors. 

Armstrong started working as a developer for IBM and Deloitte, both companies are leaders in their fields.

He was also a software engineer at Airbnb during 2011-2012, where he was exposed to global payment systems that would end up becoming the base for his future project. 

He’s responsible for Coinbase’s retail and institutional arms and has been a leading face for cryptocurrency development worldwide.

Armstrong was chosen #1 on Fortune’s 40 under 40 in 2017.

Operational spread and strength

Although originating from San Francisco, where Coinbase’s HQ is sited, the company has expanded. It currently has offices in New York, Portland, Tokyo, and London.

These strategic locations of the company help it operate round the clock, independently of the day or time.

While Coinbase is one of the strongest cryptocurrency exchanges, its lack of support for countries outside North America and Europe heavily hurts its overall strength.

While other sites serve people from almost every country, Coinbase only supports 103 – and only a handful of those can buy or sell crypto, with most being locked to crypto-to-crypto transactions.

Payment Methods & Fees

Coinbase is often criticized for its lack of support for many payment methods.

In fact, depending on where you live, it might be extremely difficult for you to put money on Coinbase other than cryptocurrencies. 

Still, that hasn’t kept it from growing, although most of its growth springs from markets it supports fully.

Payment Method

Region

Funds Available

Currency

Fees*

Bank Transfer

USA

5-7 days

USD

1.49%

Credit / Debit Card

USA

instant

EUR

3.99%

Credit / Debit Card

Canada

instant

CAD

3.99%

SEPA Transfer

Europe

1-3 days

EUR

1.49%

Credit / Debit Card

Europe

instant

EUR

3.99%

Credit / Debit Card

UK

instant

GBP

3.99%

Xfers Transfer

Singapore

instant

SGD

1.49%

Credit / Debit Card

Australia

instant

AUD

3.99%

* Deposit of money to your Coinbase account is actually free. Coinbase then charges 1.49% in order fee.

Rates to expect for withdrawals and deposits

Rather than flat fees that apply to the whole world, Coinbase charges different rates depending on where you’re from and what your preferred deposit or payout method is.

If you’re using a credit or debit card for deposits or purchases, you’ll face a 4% fee regardless of where you’re from.

Other methods sit at about 1.5%, except for wire transfers which cost $10 for incoming transfers and $25 for outgoing transfers.

Rates for buy/sell transactions

When buying or selling crypto using funds already in your account, the fees vary. First, Coinbase charges about 0.5% of the transaction as a spread.

On top of this, the transaction fees apply, which are calculated based on a flat fee OR a percentage of the transaction value, whichever is higher.

The flat fee is calculated as follows:

  • Transactions under $10 incur a flat fee of $0.99.
  • Transactions between $10 and $25 incur a flat fee of $1.49.
  • Transactions between $25 and $50 incur a flat fee of $1.99.
  • Transactions between $50 and $200 incur a flat fee of $2.99.

Methods of deposit

The methods available for you to deposit money into your Coinbase account will vary depending on your location. Cryptocurrency deposits are available everywhere.

Fiat deposits, as of June 2019, are accepted as follows:

USA customers can deposit using bank accounts and wire transfers. Additionally, they can purchase crypto using bank accounts or debit card. Deposits via debit card are not an option.

European (non-UK) customers can deposit using SEPA transfers and Ideal/Sofort. They can also purchase crypto directly using 3D secure cards.

UK customers can deposit using GBP bank transfers and EUR bank transfers, the latter via SEPA. As for instant purchases, they are available via 3D secure cards only.

Canadian, Australian, and Singaporean customers can only perform instant purchases using debit cards. Deposits are not supported at this time.

All other countries can only deposit cryptocurrencies into their Coinbase accounts.

Methods of withdrawal

All supported countries can withdraw their crypto from the Coinbase wallet to their personal crypto wallets.

Fiat transactions, however, are more complex – since they are only accepted in a few countries, and with select methods.

The methods are as follows:

USA customers can withdraw via bank account or wire transfer.

European customers, including the UK, can withdraw via SEPA transfers in EUR. Additionally, UK customers can withdraw in GBP via UK banks.

Canadian customers can withdraw fiat via PayPal.

Withdrawal of fiat currencies isn’t supported anywhere else.

Transaction completion periods

As is usual with mercantile transactions, there’s usually a period of time you have to wait between the moment you approve the transaction and when it completes.

Waiting times vary depending on specific transaction and funding or withdrawal method used, along with the location of the user.

US and European customers

All purchases made using funds already in your Coinbase account are instant.

US and European customers can buy crypto via debit card instantly. For payments using bank accounts from the US, however, the ACH bank transfer system is used.

Transactions using this system take three to five business days to clear. So, it can on occasion take over a week for your funds to appear. Do note that withdrawal via debit card isn’t possible, so any withdraws within the US will take several days.

For European and UK customers, purchases made via 3D secure cards are instant. Bank transfers via SEPA can take one to three business days for deposits and up to two business days for withdrawals.

Withdrawals to UK bank accounts usually take one business day.

Withdrawals via PayPal, where available, complete instantly.

Other Customers

For other countries, since fiat purchases are only available via debit card, transactions are instant.

Canadian customers who have the option of depositing via EFT or Interact will see varying times.

EFT takes three to four business days, while Interact is instantaneous. For withdraws, both take one to two business days.

Withdrawals via PayPal, where available, complete instantly.

Transaction Turnaround Times

Since all purchases must be made either via debit card or existing funds in your account, all transactions happen instantly inside the system.

While it might take you days to be able to buy cryptocurrencies in Coinbase, the delay is due to the time it takes to add funds to your account.

This is important to mention because it means that, when selling, you’ll be credited your fiat instantly. If a buyer has to wait several days for funds to clear, they won’t be able to buy any crypto until that happens.

Moreover, since Coinbase internally warehouses all crypto used in transactions, crypto-to-crypto payments happen instantaneously.

Operations & Dashboard

The user interface you’re met with when you log into Coinbase will depend on the area you log into. Coinbase is divided into two areas: Coinbase and Coinbase Pro.

While Coinbase Pro offers more features, its interface is also much more complex.

Coinbase Dashboard

Still, Coinbase’s dashboard is clean and direct in a way that makes it really easy for new users to purchase cryptocurrencies. This is in part thanks to its design, but also thanks to the way it works.

By not requiring users to have their own crypto wallets – instead of relying on Coinbase’s own system – a good portion of the starting difficulty can be skipped.

Cross-platform availability

Coinbase App

Besides the website, Coinbase has a mobile app available for Android and iOS. From this app, users can buy and sell cryptocurrencies.

They can also perform operations with their owned crypto from their mobile device, giving the app all the most important features of the website.

Online Wallets

Coinbase operates on a particular system where all crypto held by its users are warehoused in Coinbase’s own wallets.

This makes it possible for new users to not bother about a crypto wallet nor worry about keeping their crypto safe. It’s this feature that has made Coinbase one of the easier places for crypto investors to flock to.

Coinbase Wallet

While leaving your crypto at any exchange can be ill-advised, for many people, Coinbase is the safest place to store theirs.

This is because Coinbase’s wallets, and its crypto, are actually stored offline – meaning there’s no way to hack into them. 

This not only makes Coinbase safe but the best bet for any newbie who might not know much about safety practices on the internet.

Security & Customer Insurance

As mentioned above, your actual savings are kept offline by Coinbase, making them impossible to steal by hacking the website.

However, it is always possible for somebody to access your account and use or steal your funds, as would be in any online systems.

Coinbase’s policies regarding customer insurance are simple. If your crypto is lost as a result of a server hack, you’ll be refunded for the whole amount.

Since 98% of Coinbase’s holdings are in cold storage, however, the chances of this happening are slim to none. The company itself is insured, making it so that a situation where Coinbase couldn’t refund you would be extremely unlikely.

The policy is different when it comes to personal account hacks. Any money you might lose to unauthorized access to your account is considered your loss unless the said access can be proven to have happened via a hack to the system. 

It is your responsibility to use strong passwords and not share your credentials with anyone.

Coinbase Vs. Coinbase Pro

The main area of the platform is where most newcomers to crypto will spend their time. That area allows them to buy and sell crypto instantly, while also presenting a friendly, easy to use interface.

It is Coinbase’s main feature, and the one most of its users go for.

Coinbase Pro

Coinbase Pro, however, does have its advantages. Presenting itself as a cryptocurrency exchange for advanced users, this side of the website offers much more information than the basic area – starting with information on price fluctuations.

More importantly, it works as a more advanced broker, offering the user options to create market orders, limit orders, and stop orders.

This in contrast to the basic Coinbase system, where you can only buy or sell at ongoing prices. Fees are also much lower in Coinbase Pro, at times being as low as 0.1% for takers.

The one caveat, besides the service is for advanced users who know their way around the market, is that Coinbase Pro is available in fewer territories than Coinbase.

Since Coinbase itself isn’t available in more than half the world, that might be problematic for new users, particularly those located outside North America and Europe.

How a typical transaction works

Making a deposit

The option to deposit money into your account is limited to only certain areas. To do this, you first need to verify your account. Once that’s done, you’ll be allowed to enter your banking information.

There’s an extra step there, where you must check your bank account’s transactions for two pending charges, containing a code.

You should use the last two digits of those codes to verify that you own the bank account in question with Coinbase.

Once that’s done you can deposit funds or purchase crypto on Coinbase.

Purchasing or selling crypto

To purchase or sell crypto on Coinbase, you just click on the “Buy/Sell” option on the dashboard menu after having verified your account.

Once you do that, you’ll be shown the tokens you can trade, the current going prices, the payment methods you have on account, and you’ll be allowed to choose how much you want to buy or sell.

All transactions with existing funds or debit cards are instantaneous. If you’re funding from your bank account, it can take several days to clear – however, prices are locked when you click buy.

If the crypto value changes, you’ll be held to the price when you bought, for better or worse.

Making a withdrawal

Withdrawing fiat currencies is only supported in some areas.

As long as you have a supported withdrawal method on file, you can withdraw by selecting the respective wallet on your dashboard, then clicking on the “withdraw” tab.

Customer Support

Every now and then, you might need customer support. While Coinbase has an extensive knowledge base, its contents and explanations can feel cryptic at best, at times leading you to look for tutorials for some procedures.

Some of the internal links in the knowledge base are broken, leading to further confusion. If even tutorials won’t work, your best bet will be contacting Customer Support.

However, Coinbase’s customer support is known for not being great – it’s one of the exchange’s main failures. While the CS will answer you, but it will take time – and it might not be very helpful.

At the moment, Coinbase offers customer support via email and phone.

How to Open an Account

Opening an account with Coinbase is a straightforward process. It begins by going to the website.

Once there, click on the “Sign up” button. This will display the sign-up form – or an error screen if you’re located in a territory where the service isn’t available.

Setting up Coinbase Account

The sign-up form will ask for your name, email, and a password. Make sure to enter your real name as it appears in your ID documents, or else you might have difficulty verifying your account later.

As for the password, make sure to use a unique password that’s considered “secure.”

Coinbase Profile

For the other steps:

  • Check the reCaptcha box and the user agreement and privacy policies boxes. Reading through them isn’t a bad idea, either.
  • Press the “Create Account” button.
  • Wait until you receive a confirmation email, then open it and click the link in it.
  • Congratulations, you have opened an account with Coinbase!

Coinbase vs. Competitors

best FOR Security

eTorox logo
  • Fees: .12% - .24%
  • Account Minimum: $0
  • Promotion: No current promos

BEST FOR ALTCOINS

binance logo
  • Fees: .1% per trade
  • Account Minimum: $0
  • Promotion: No current promos

BEST FOR RELIABILITY

Coinmama logo
  • Fees: 5.50% per transaction
  • Account Minimum Investment: $0
  • Promotion: No deposit or withdrawal fees

Should You Use Coinbase?

Coinbase isn’t going anywhere. It’s one of the major players in the cryptocurrency world, and it is constantly striving to reach more people. 

Having an in-house own token, even if it’s a stable token, puts it in the game for the long run.

For newcomers, there are few places that could be considered better than Coinbase.

Being so easy to use and having the community’s backing, people looking into crypto are often sent there – meaning they have an ever-growing user base.

For people interested in investing in crypto, as long as they are only interested in the main tokens, Coinbase is the place to be.

The exchange doesn’t offer everything, nor is it for everyone, but it has earned a place in the market and barring a disaster, the company should remain in business for the foreseeable future.

As such, investments made using Coinbase should be safe.

Coinbase

A secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.

Coinbase logo
  • Editor Rating
  • Rated 4.5 stars
  • 80%

  • Coinbase
  • Reviewed by:
  • Published on:
  • Last modified: June 25, 2021


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