The American market is one of the most important from the financial point of view at world-wide level and within the market of the crypto currencies it was not the exception. Coinbase was born at an early stage of Blockchain technology in order to satisfy the American market and give it a chance to buy crypto coins.
However, Coinbase’s growth since 2012 has been so important that today figures as an international reference Exchange. In TodoIcos we wanted to make a complete analysis, evaluating both the advantages and disadvantages of it.
- 1 What is Coinbase?
- 2 Coinbase Security as Exchange
- 3 Coins offered in Coinbase
- 4 Coinbase Rates
- 5 How is the process to open an account in Coinbase?
- 6 Advantages of Coinbase
- 7 Disadvantages of Coinbase
What is Coinbase?
Based on its own website, Coinbase is a web platform where people and merchants have the possibility to trade crypto coins. Initially you could buy only 3 assets, Bitcoin, Ethereum and Litecoin,
It currently has more than 20 million registered users and more than 200 billion US dollars have been sold on its platform. Together with the web platform, Coinbase offers an application for both Android and iOS.
At the operational level, Coinbase is available in 42 countries. This availability does not mean that users from other countries cannot use the platform, but they cannot buy/sell crypto currencies with Fiat coins. Of the 42 countries available, Australia, Singapore and Canada can buy crypto currencies but have no mechanisms to sell.
As a company, Coinbase has received $217 million as an investment to grow its company. Solid companies such as BBVA, MUFG, USV, SOZO Aventures and IDG Aventures can be seen within the network of investors who have bet on this project.
Coinbase Security as Exchange
In Coinbase’s own words, they take the most optimal security measures to protect crypto coins. First of all it has to be determined that 98% of the funds handled in Coinbase are stored offline. These funds are stored in USB FIPS-140 and paper copies for later storage in safes distributed all over the world.
According to Coinbase, 2% of funds stored on the Internet have an insurance policy to protect funds lost due to a cyber attack or a failure within the platform’s systems.
Regarding the security of users for the use of the platform, Coinbase establishes a mandatory two-step authentication method using a mobile phone. This authentication method will be activated every time you log in or want to make some kind of withdrawal of crypto coins from the account.
Users’ passwords are encrypted and stored in secure databases. All information that could be susceptible to computer theft is stored in databases not connected to the Internet.
The platform also has a “Status portal” where users are reported in real time any type of problem that may exist within the platform. In this portal it is possible to verify how the web portal is found, the application, the crypto currencies that are listed, the identity verification process, the two-step authentication method and the customer service support.
They also have an Error Reward Program in which analysts and security experts keep an eye on the portal to determine if there is any type of error that hackers can take advantage of to violate the platform.
Coins offered in Coinbase
Initially they had Bitcoin, Ether and Litecoin as the only options to buy and sell, but in recent years they have expanded their offer. Currently, in addition to the above mentioned, there are Bitcoin Cash, Ethereum Classic, 0x, Basic Attention Token, Zcash and the stablecoin USD Coin. All these coins can be bought or sold within the platform.
According to Coinbase’s official tariff page, both the use of Wallets and transfers between accounts within Coinbase are completely free of charge and do not charge any fees, the only thing they do charge are the mining fees charged by the Blockchain network of the specific cryptomoneda.
Now, when it comes to buying and selling crypto currencies with fiat currency, the platform establishes a surcharge of 0.50% on the price of the asset to be bought. Along with this surcharge apply a conversion fee that is not fixed but varies according to each country and the method you are using to buy virtual currencies. For currency conversions within the platform, Coinbase sets Spreads rates of 1% on asset prices.
How is the process to open an account in Coinbase?
The platform is quite intuitive and does not require more computer knowledge to open an account. Registration is completely free and you will initially ask us for our personal data. It is important that true and verifiable information is placed since the account must be verified before it can be used.
Account verification process in Coinbase
In the event that we want to use our account here to purchase cryptomedas in exchange for Fiat currency, we will need to have it fully verified. To do this, we need to follow a series of steps.
- Specify a payment method and provide the respective details of that chosen method.
- Provide a mobile phone number for the verification process explained above.
- We must verify our identity through a KYC process that will require photos of documents and personal photos to verify the data with official documents.
This verification process is resolved within 48 hours. In the event that everything goes correctly, our account will be verified and we will be able to use it fully.
Within our Coinbase account
When we are inside our account we will have several options inside the trading panel.
- Buy/sell. As the name implies, the first option will be to buy/sell crypto coins within the platform.
- Send/Request. We stated earlier that sending money between users of the platform is possible. This is the option to perform this operation.
- Accounts. If we have invested in several crypto currencies within the portal, we will be able to observe here all the balances of our investments.
- Tools. Here we will be able to check the transactions we have made, the addresses for sending crypto coins and other operations.
- Configuration. If we want to make any changes to our account, this is the button. Here we will be able to finish placing the personal information in the case that we have not concluded it when opening the account and we will also be able to configure everything related to the verification method in 2 steps.
Advantages of Coinbase
Platform to operate legally
Coinbase has sought to remain legally within the United States, being one of the Exchanges with greater compliance of rules and regulations within the financial world of crypto currencies. This has enabled Coinbase to attract traditional investors who tend to place their money in spaces regulated by the financial authorities, which has also been very positive for crypto currencies in general.
In addition, these legal obligations provide confidence to users since they are protected by American laws in the event that there is some mishandling of funds or other problems with the Exchange.
Security in the management of assets
While Coinbase’s online security is not the best on the market, it does meet the necessary requirements to ensure good fund management. In addition, the fact that they keep 98% of the funds off the network makes it impossible for hackers to access these funds.
All this work that Coinbase has done in the area of security together with the insurance policy they have established for the funds, provide a very optimal level of security for users on the funds they hold on this platform.
Disadvantages of Coinbase
Just as it is advantageous for Coinbase to operate hand in hand with the US authorities, certain disadvantages can also be seen. Just remember how Coinbase had to provide the U.S. government with data on U.S. users operating within its platform. It is still considered today that this was a very important intrusion by a government into the freedom that crypto coins bring.
For the most idealistic of the world of crypto coins, Coinbase is an Exchange that violates the meaning of crypto coins by establishing a level of user vigilance similar to that which banks have with their customers. If you believe in privacy and non-government control, Coinbase may not be the best Exchange.
Limited Coin Offer
Although they have expanded their portfolio of options, Coinbase remains an Exchange with a very small supply of currencies. Important currencies such as NEO, Ripple, Stellar, Dash or EOS are being left out and this implies a major constraint for users who want to diversify their investments within Coinbase.