Coinbase Review

Pros Explained

• Easy user interface for crypto and NFT beginners: The interactive exchange makes it easy for users to sign up, explore the platform, and trade. 
• Supports an extensive list of cryptocurrencies: Over 10,000 assets are available for buying or selling, including top choices like Bitcoin, Ethereum, Dogecoin, and Ripple. 
• Features a native NFT marketplace: Coinbase has an in-exchange marketplace where anyone with an account can create, trade, or simply collect digital collectibles. 
• Offers passive earning opportunities on over 100 assets:  Earn an annual interest on any eligible cryptocurrency or gather crypto as rewards by engaging with content in the “Learn” section.

Cons Explained

• Relatively high transaction fees: Coinbase’s transaction fees are higher than the industry average. 
• Poor customer service: Users frequently lament the exchange’s lack of urgency in resolving customer complaints, even with critical issues. 
• Controls users’ private keys: Coinbase holds your private keys (the crypto equivalent of a password), meaning it has full access to your crypto without your permission. Such access can trigger an FTX-like event, where the exchange dips into users’ funds.

Introduction

Coinbase is a cryptocurrency platform where users can sell, buy or store their crypto and, more recently, NFTs. The exchange is in over 100 countries and has a vast user base of 110 million verified users as of Q4 2022. 

With over 10,000 assets to choose from, beginners and advanced traders can use Coinbase to trade popular cryptocurrencies such as Bitcoin and Ethereum and not-so-popular but highly sought-after ones like SUI and MAGIC. The platform has an intuitive and friendly user interface ideal for newbies and features a simple, direct way to convert crypto to cash and vice versa. 

Over the years, Coinbase has evolved, adding and removing coins and rolling out upgrades to create a smoother user experience. In June 2022, the exchange announced that it would sunset Coinbase Pro and replace it with Coinbase Advanced Trade to provide its full suite of advanced crypto investment services on one platform. Six months later, the company moved Coinbase Pro accounts to the "Advanced Trade" platform, which has more flexibility for large-volume traders.

Cryptocurrencies Available on Coinbase

Coinbase maintains an ever-growing assets list that includes thousands of unique crypto assets available for trading on the go. Some of the popular cryptos on Coinbase are:

• Bitcoin (BTC)
• Ethereum (ETH)
• Tether USD (USDT)
• Cardano (ADA)
• Solana (SOL)
• Polkadot (DOT)
• USD Coin (USDC)
• Dogecoin (DOGE)
• Uniswap (UNI)
• Litecoin (LTC)
• Shiba Inu (SHIB)
• Stellar Lumens (XLM)
• Polygon (MATIC)

On February 20, 2023, the Coinbase Wallet stopped supporting BCH, ETC, XLM, and XRP because of low usage. However, users interested in investing in these coins can still trade them on the Coinbase exchange.

Trading Experience

Coinbase has over 30 products for individuals, developers, and businesses. However, each product is for a particular audience and gives a different trading experience. Coinbase (the exchange), Coinbase Wallet, and Advanced Trade best suit individuals who would like to trade with Coinbase.

Coinbase

The main Coinbase exchange presents a simple layout for anyone to navigate and trade their cryptocurrencies in a few steps, even without advanced crypto knowledge. 

You can access Coinbase via its website and the Coinbase exchange app, available on the Apple App and Google Play Store for users who prefer to trade on the go. To start using Coinbase, you have to link your bank account to complete your account setup. This linked account lets you deposit cash into your Coinbase account or withdraw your crypto as cash within a few minutes.

To view your crypto holdings, you have to click on the “Dashboard” tab, and you will see all your crypto assets. 

As a security feature, Coinbase sends periodic emails whenever your assets significantly go up or down in value unless you turn the notifications off. Like other cryptocurrency exchanges, Coinbase operates any time of the day so that you can trade crypto 24/7.

Coinbase Wallet

Coinbase also has a wallet that is an ideal alternative for users who prefer a more interactive, on-the-go platform. Unlike the website, the wallet is non-custodial, so you have to keep your login details safe, or else you could permanently lose your assets. Also, Coinbase.com is unavailable in some regions, so the Coinbase Wallet is an alternative for people who still want to use Coinbase services.

Advanced Trade

Advanced Trade is a native trading platform by Coinbase that provides advanced users with more tools and security for their trades and allows them to access real-time order books. It's a huge leap from Coinbase Pro, Coinbase's former advanced platform for traders. Compared to the old Pro platform, Advanced Trade has more market pairs, a TradingView integration, and better staking rewards.

Fees

Coinbase’s entire fee schedule is not available on a single page but instead available on different pages within their Help Section. You pay less as a maker than you do as a taker. While makers pay 0.00% to 0.40% of their transactions as fees, takers pay a higher percentage, which could range from  0.05% to 0.60%. These fees can be reduced according to your tier and the amount you transact. 

Coinbase operates a tier-based system for its maker and taker fees, allowing users transacting with larger volumes to pay less in fees.

The tier-based maker and taker fees on Coinbase.com are as follows:

Additionally, you must pay other fees besides the network and fixed crypto trading fees. For example, if you want to withdraw your crypto, you must convert it to cash for a 1.0% charge before proceeding.

Payment Methods for U.S. Customers

To have enough money for your transaction, it’s essential to estimate all the fees you will pay on a particular transaction beforehand. 

In summary, your total fees depend on:

• Your payment method
• The particular blockchain you're transacting on 
• Trading fees and spreads

Security

Coinbase uses various methods to keep your account safe. One of these helpful security features is a compulsory 2-factor authentication (2FA) system. Notwithstanding, you still need to do your due diligence and take steps to guard against any unauthorized access that could compromise your account.

The exchange employs two critical security measures to secure customer assets: cold storage and multiparty computation (MPC). While most customer assets are stored in secure, offline locations, the remaining assets online are protected from attackers with MPC. 

With MPC, cryptographic keys are generated for any on-chain transaction. Keys are generated in different parts, making it almost impossible for any attacker to steal your crypto by combining all required keys. 

Despite Coinbase’s “bank-grade” security, users have lost their assets using the exchange. In March 2023, a Coinbase user sued the exchange after losing 90% of his life savings, about $96,000, to a hacker after his phone was hacked and his account accessed. Another user lost $2 million worth of cryptocurrency after his account was compromised and he could not get any meaningful help from customer support when the incident occurred.

Opening a Coinbase Account

Opening a Coinbase account is an easy process, similar to opening a new bank account. You’ll need to submit personal details such as your name, email address, and proof of residence, among other things, to confirm you're human and to meet know your customer (KYC) regulations. 

Additionally, you have to submit a picture of your government-issued ID. While some cryptocurrency exchanges allow you to be anonymous, Coinbase is not one of these exchanges. You have to be verified and link your bank details to match your present identity before you start transacting.

These are security measures put in place to protect Coinbase users.

Customer Service

Many Coinbase customers have issues with the exchange’s customer service, with non-human communication and slow response times as some of the most recurring themes. The customer service options are a live chat function, a social media help platform, and a ticketing system, which are all more self-service than interactive.

Customer Satisfaction

Coinbase has scored good points on user experience and ease of -use, but security and customer satisfaction need improvement. Generally, users with account issues like hacks and locked accounts find it challenging to resolve them. 

On Trustpilot, Coinbase has poor customer reviews, scoring 1.8 out of 5 stars from 9,300+ reviews, signaling a major problem with users accessing and operating their accounts. 

Rating sites aside, Coinbase also has a bad reputation with consumer regulatory bodies. Thousands of grievances were brought to the Consumer Financial Protection Bureau by Coinbase users. Also, the Commodity Futures Trading Commission fined Coinbase more than $6 million in civil penalties.

How Coinbase Compares to Other Cryptocurrency Companies

With more than 500 crypto exchanges, users have many alternatives to Coinbase. Users who prefer to stay anonymous can go for decentralized exchanges. Those who are okay with being known can go for other centralized exchanges like Binance, Kraken, or Gemini if they feel Coinbase isn't a good fit.

You don't need to stick to one exchange. You can use Coinbase in combination with other exchanges for an enhanced experience. For example, another centralized exchange might be good for frequent purchases, while Coinbase securely stores your crypto.

Gemini is one exchange that closely mirrors Coinbase in functionality. Here's how it compares to Coinbase:

• Gemini has a better fee schedule and is more cost-effective than Coinbase.
• Both exchanges are compliant in the U.S.
• Gemini, in addition to its regular exchange, also has a pro trading platform called ActiveTrader that offers similar functionality to Coinbase’s Active Trade.
• Both Coinbase offer users an opportunity to earn interest on their crypto—up to 9%.

If you would like to switch to Gemini instead or run it simultaneously with Coinbase, check out our Gemini Review first so you’ll learn how to optimize your use of the exchange.

Final Verdict

Coinbase is a popular cryptocurrency exchange where anyone can buy, sell, or store cryptocurrencies. It saves users from navigating through the technicality typical of many other exchanges and cuts down on the steps needed to invest in cryptocurrency. The exchange supports over 10,000 assets, allowing users to explore and enjoy a buffet of digital currencies.

Remember to safeguard your devices while using any crypto exchange, including Coinbase. If you look past its poor customer service and pricey fee schedule, Coinbase is a powerful tool that can help ease your journey into crypto investing.

Frequently Asked Questions

What Is Coinbase?

Coinbase is a cryptocurrency brokerage that simplifies the process of trading and storing cryptocurrencies, ideal for beginners with little crypto knowledge and advanced users needing something less complicated. With this exchange, users can trade crypto 24/7 and deposit and withdraw fiat through a variety of methods such as SWIFT and ACH transfers.

Is Coinbase Safe?

Coinbase has several security measures in place to protect customer funds, which makes it a relatively safe place to store your crypto assets. However, it is not entirely safe, and you still need to do your part to protect your assets. You can use Coinbase to trade crypto, but ensure you keep all login information private and never share your verification codes with anyone.

Is Coinbase Good for Beginners?

Yes. Coinbase is a good choice for beginners as it requires little technical knowledge. Anyone operating an internet-enabled device can easily navigate Coinbase’s interface and trade crypto. 

Should I Give My SSN to Coinbase?

Giving your Social Security number (SSN) to Coinbase is generally safe. It is one of the most well-known cryptocurrency trading platforms, using leading security practices to protect users' accounts. However, it's not entirely without risk of hacking, and only you can decide if you wish to proceed.

Is Coinbase FDIC Insured?

No, Coinbase is not FDIC insured. Instead, the company offers crime insurance, which covers some of the digital currencies within its system, offering protection against theft and cybersecurity breaches. Note that the insurance does not cover unauthorized access to user accounts, such as if someone obtains your login credentials.

Does Coinbase Report to the IRS?

Coinbase does report to the IRS. The exchange only reports Form 1099-MISC. Multiple types of taxable income can be generated from activities on Coinbase, including capital gains from buying and selling crypto and interest income from things such as staking. U.S. customers should visit Coinbase Taxes to get everything they need to report taxable income from Coinbase.

Methodology

Investopedia is dedicated to helping those interested in cryptocurrency investing make informed and safe decisions. We are committed to providing our readers with unbiased reviews of the top cryptocurrency exchanges for investors of all levels.

Exchanges were reviewed on points including security, fees, number of cryptocurrencies available, and more. We also considered if the exchange is regulated by a proper agency or entirely decentralized. Our full cryptocurrency exchange methodology, including the review process and weighted data points, is available for review.