As the crypto currencies grow and evolve, more options will be needed to switch from Fiat to cryptoactives. Coinmama is one of the options for this in today’s market, and it has worked so effectively that it has caught the attention of many within the Blokcchain space.
In TodoIcos we have decided to take a look at it so we can give you our opinion on how Coinmama works to buy crypto coins with Fiat coins and what are its main features as Exchange. Let’s get started!
- 1 What is Coinmama?
- 2 Coinmama Security as Exchange
- 3 Coins we can buy in Coinmama
- 4 How to buy crypto coins in Coinmama?
- 5 Coinmama Fees
- 6 Advantages of Coinmama
- 7 Disadvantages of Coinmama
- 8 Conclusion
What is Coinmama?
According to the information we can find on Coinmama’s official website, the platform is owned by the company “New Bit Ventures Ltd”, an Israeli company, and is managed by the company “NBV International s.r.o.”, a company that is also owned by New Bit Ventures Ltd but the latter is located in Bratislava, Slovakia.
The company began operations in 2013, offering the opportunity to buy Bitcoin and Ethereum with Fiat currency. Today it has perceived an important growth in its operations, extending its services to more countries and expanding its offer to other crypto currencies.
It is also important to note that Coinmama works as a platform to buy crypto coins, they do NOT have an option to sell them. Also, the operations of purchase of crypto coins are made directly between the user and Coinmama, the portal leaves no room for a P2P market between users.
Another fundamental aspect that we must include in the definition of Coinmama is that the portal does NOT provide any type of wallet or space for the storage of the crypto coins purchased in its portal. At the time of purchase of the crypto coins, users must already have a wallet and provide the public address of the purse to which they want the acquired crypto coins to be sent.
Coinmama Security as Exchange
Thanks to the fact that Coinmama does not protect any type of cryptoactive within its platform, we can say that the demands are lower compared to the security maintained by other exchanges.
The only information that could be “sensitive” or susceptible to theft, would be the credit or debit card information that customers use to buy their crypto currencies within the portal, however, the developers ensure that this financial information is not stored on any online server of the portal.
As far as Coinmama security incidents are concerned, it should be mentioned that one suffered very recently. According to a statement issued from the platform itself, the platform was informed that a total of 450,000 email addresses of users and their passwords to access the portal were published in a record of the Deep Web. This information was from users who had registered before August 15, 2017 within the platform.
So far, Coinmama claims that the perpetrators of the data theft have not done anything with this information. However, the portal has begun a procedure of resetting passwords and notifying affected users to inform them of what happened and that they can take action.
Coins we can buy in Coinmama
The offer to buy cryptomedas in Coinmama is quite limited, we can only buy Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, Qtum, Ethereum Classic and Cardano. Similarly, developers say they are looking to include more crypto coins in their purchase offer for the near future.
How to buy crypto coins in Coinmama?
To proceed to purchase on this platform, it is first necessary to register as users within the portal. Registration is very easy and we will only ask for an email, a password, our name and surname and the country in which we reside. It is important that we provide REAL information about our identity as Coinmama has a KYC procedure that must be followed in order to purchase with them.
Coinmama verification process
The verification process will depend on the level you want to reach as a user. If you want to stay in the first level that only allows a maximum purchase of 15 thousand dollars or its equivalent in other currencies, you must provide only a photo of an official identification that matches the data provided above.
In the event that you want to reach level 2 verification to operate with up to 50 thousand dollars or its equivalent, you must provide 2 official identifications as well as a personal photo of the user holding the identification.
The last level is the third and it allows the user to manage up to 1 million dollars within Coinmama. To reach this level you will need to complete an interview with Coinmama staff, in addition to completing the steps established in level 2.
Once we have completed the verification process within the platform, we can proceed to purchase the crypto currencies within Coinmama. To be able to buy within the platform, we are allowed to put the amount either in the crypto currencies we want to buy or in the dollars/euros we want to spend.
Once we establish this, we are going to go to another page where the portal is going to ask us to indicate the address of the wallet we want the crypto coins to reach. We must remember again that Coinmama does not offer the virtual wallet service within its portal.
Upon completion of these steps, you will be redirected to the page where you must enter the respective financial information to make payment for the transaction. Although transactions are reflected in dollars and euros, Coinmama accepts payments from 188 countries and their local currencies through currency conversion services offered by banks and credit/debit cards. This must be taken into account to remember that banks charge a commission for currency exchange and that the same will be charged on the operation.
Once the payment process is completed, the crypto coins will be sent to the wallet provided by the user. The length of time this last step may take will not depend on Coinmama since it will depend on how congested the Blockchain network of the specific cryptomoneda is.
Coinmama’s commission to buy crypto coins is one of the highest in the market, compared to other offers that exist to buy such as Coinbase or Binance. The flat rate that apply for all purchases is located at 5.90% and includes it directly on the price of the crypto currency you want to purchase.
Also, they notify that when you want to buy with a debit or credit card the payment processor recharges an additional 5% on the total amount of the transaction.
The developers also warn that before proceeding to purchase in Coinmama contact the bank that issued the card or where the transfer comes from as there may be additional charges for the operation.
Advantages of Coinmama
Very easy to use
The platform is ideal for those users who are just starting out in the world of crypto coins as it is very intuitive and easy to use. The platform is built to enable anyone to understand the entire process of buying cryptoactives. In addition, its operational level generates security for those users who do not know about cybersecurity.
Accepts coins from a large number of countries
The fact that they accept payments from almost 188 countries puts this platform ahead of their international competition and enters directly into competition with exchanges that operate locally. Even with this supply mechanism, Coinmama is presented in many countries as the only option to exchange their Fiat coins for crypto coins.
Disadvantages of Coinmama
Very high commissions
A total of 10.6% in commissions for the purchase of crypto currencies is excessively high compared to other offers on the market. In comparison mode we can see that Coinbase’s rate for buying crypto coins with debit/credit cards is between 4.50% to 5% while Binance’s rate is 3.5%. This point generates a clear disadvantage for Coinmama.
No service to sell crypto coins
While Coinbase is presenting options to withdraw money even with PayPal and is researching to expand its offer, Coinmama remains stuck on not offering options to customers to convert their crypto coins into Fiat currency.
This lack of offers seriously affects the credibility of the user on the cryptomoney market in general since he wants to know the whole “mechanism”, both the purchase of the cryptomoney and the sale of it. Since Coinmama focuses primarily on first-time or novice users in the market, this feature can be drastically affected.
Personally, I believe that Coinmama is one of the fastest and safest options for buying crypto coins with Fiat coins. They have been running without any shock and thousands of users can testify that it is a safe place to make purchase operations.
However, their high commissions cause many to start evaluating other options to buy their crypto currencies. A 10.6% can generate significant costs and, despite the fact that crypto currencies show considerable increases over time, such a high commission within this market is very unattractive.