Coinbase cryptocurrency platform
Coinbase is one of the most popular cryptocurrency exchanges in the world, and it is often seen as a platform to start investing in cryptocurrency trading.
But nowadays, there are dozens of cryptocurrency exchanges in the market, such as Binance, which are gaining popularity among advanced cryptocurrency traders. Through today’s article, we will learn about the advantages, pros, cons, and fees of the Coinbase trading platform.
Coinbase platform
Coinbase is a trading platform where you can buy and sell digital currencies. It is an online broker, but you are trading cryptocurrencies instead of securities. You can link your bank account and credit cards so you can make purchases or deposit your balances.
Coinbase has been recognized as an excellent platform for beginners because it has tools that can teach you how to invest in cryptocurrencies and how to mitigate risks. Additionally, the platform has a straightforward interface that is easy to use for beginners.
When it was launched in 2012, Coinbase was the first platform created for bitcoin trading. It was the first cryptocurrency trading platform to be licensed, regulated, and listed on the American Stock Exchange.
Coinbase has been a huge success. There are more than 43 million users from more than 100 different countries, with accounts worth more than $90 billion.
If you are considering using the Coinbase platform, you must understand the risks of investing in cryptocurrencies. The latter is a highly volatile asset, which means that prices can swing dramatically in just a matter of hours or minutes.
Like other high-risk investments, you may want to hold cryptocurrency for the “top of the pyramid”. In other words, it should only make up a small portion of your overall investment portfolio. You will achieve more reliable returns by investing in stocks or gold.
Features of the Coinbase cryptocurrency platform
The Coinbase trading platform has the following features:
- Coinbase Trading Platform: It is first and foremost a trading platform that enables you to buy or sell digital currencies. You can access the platform from your web browser or through the mobile app for Android or iOS.
- Crypto Wallet: Cryptocurrency wallets are used to store the private keys you need to access your digital currency on the blockchain. Coinbase offers its own built-in crypto wallet, but you can also choose to store your private keys in an external wallet.
- Learning Tools: Coinbase offers video tutorials and a library of resources so you can educate yourself on a variety of cryptocurrency topics. This is why Coinbase is a great launching pad if you are new to beginner crypto.
- Coinbase Pro: This is a service that provides additional tools for advanced traders and also charges lower fees. This service is valuable if you are going to be doing a significant amount of trading or if you are ready to take the next step as a cryptocurrency investor.
- Coinbase Rewards: Coinbase currently offers one of the best rewards cards on the market, with a 4% crypto bonus for daily spending, rotating crypto bonuses and no annual fee.
- Customer Service: Coinbase has limited customer service options, but they do offer email support.
Security is essential for any crypto platform due to the public nature of the blockchain and the platform’s online functionality.
Coinbase is known for its strong security features. The platform allows two-factor authentication when logging in, and you can also enable fingerprint logins.
To store your private keys, Coinbase uses both cold storage and hot storage. 98% of your crypto funds are kept in cold storage (Coinbase uses offline “cryptocurrency vaults”), while only 2% of your funds are kept in hot storage.
Hot storage is generally less secure than cold storage, but Coinbase covers the 2% held in hot storage. If there is a security breach on Coinbase’s end — such as an employee theft or a cyberattack — Coinbase will cover all lost hot storage funds.
However, Coinbase will not cover security breaches that are the user’s responsibility. If you accidentally disclose your private keys or fail to secure your devices, any security breach caused by Coinbase will not be covered.
Although Coinbase’s built-in cryptocurrency wallet is convenient and well-protected, advanced cryptocurrency investors may still choose to take control of their own security. Coinbase is compatible with many hardware wallets so you can manage your keys outside of the platform.
Coinbase Pros
Coinbase benefits include:
- A variety of digital currencies.
- low minimum.
- Easy to use app and user interface.
- You can earn free digital coins.
- Ease of depositing and sending currencies.
1. A variety of digital currencies
Coinbase has a large variety of cryptocurrencies that you can trade. There are 56 currencies available for investing and trading. You’ll get more options if you’re using Coinbase Pro, and there are other coins available that you can just send.
Some cryptocurrency enthusiasts might point out that Binance offers more than 500 cryptocurrencies – but that is only international issuance. The US version of Binance is more limited. In fact, Coinbase has more cryptocurrencies available than Binance.
Below are a number of coins supported by Coinbase.
- Aave (AAVE)
- Cardano (ADA)
- Algorand (ALGO)
- Cosmos (ATOM)
- Basic Attention Token (BAT)
- Bitcoin Cash (BCH)
- Bitcoin (BTC)
- Compound (COMP)
- Cartesi (CTSI)
- Dash (DASH)
- Dogecoin (DOGE)
- Ethereum Classic (ETC)
- Ethereum (ETH)
- Litecoin (LTC)
- Decentraland (MANA)
- Enzyme (MLN)
- NuCypher (NU)
- Origin Protocol (OGN)
- Orchid (OXT)
- SushiSwap (SUSHI)
- Shiba Inu (SHIB)
- Synthetix (SNX)
- Solana (SOL)
- Storj (STORJ)
- Tellor (TRB)
- USD Coin (USDC)
- Tether (USDT)
- Wrapped Bitcoin (WBTC)
- Stellar Lumens (XLM)
- Zcash (ZEC)
- 0x (ZRX)
Coinbase may add additional coins in the future.
There are also 60 cryptocurrency trading pairs. This means that you can exchange one currency for a proportional amount of another currency, without having to buy or sell.
2. Low minimum
The basic version of Coinbase only requires a minimum account of $2, which is great considering the volatility of the cryptocurrency. The application does not force you to invest a lot of money in your cryptocurrency investments. In fact, Coinbase allows you to buy up to $25 worth of coins.
As of June 2021, one Bitcoin is worth about $40,000, but Coinbase allows you to buy a fraction of the currency, so you don’t have to put a lot of money into it. Although cryptocurrency is a risky investment, Coinbase allows you to play it safe.
3. The Coinbase app is easy to use and has a user interface
Coinbase is designed with a simple interface so that it is not too confusing for novice investors. The user interface is as simple as they come. There are clearly marked buttons for buying, selling, sending and receiving cryptocurrencies, and you don’t have to search hard to find other trading options.
Upon login, you will be shown your portfolio balance and portfolio performance across specific timeframes (1 hour, 24 hours, 1 week, 1 month). This information will not help you with advanced trading, but it is useful for novice investors.
The trading process itself is geared towards a novice investor and guides you through every step required to place an order. Plus, you can create an account in minutes.
Coinbase is available on your browser, but many investors use the Android or iOS app. Both are highly rated and easier to use.
4. Earn free digital coins
Coinbase provides educational videos that you can watch to learn more about investing in cryptocurrencies, and rewards you with cryptocurrencies for watching.
The content provided by Coinbase is an excellent way for beginning investors to learn all about the cryptocurrency market. The videos discuss different aspects of currency trading and delve into the 12 cryptocurrencies offered on the platform.
You can earn more than $115 in cryptocurrencies just by watching our educational content. In addition, Coinbase offers a library of educational resources covering various topics, from crypto taxation to blockchain.
You also get a Coinbase Visa Card, which you can use anywhere Visa is accepted. The card offers a reward of up to 4% of the cryptocurrency back in your wallet for everyday purchases.
5. Easy deposits
Coinbase is a trading exchange, which means you can buy and sell most coins very quickly and very easily. Since cryptocurrencies are highly volatile, you need to be able to fill orders quickly so that you can respond to market fluctuations in real time.
Cons of Coinbase cryptocurrency trading platform
Here are the main disadvantages of Coinbase:
- Users do not control their wallet keys.
- Coinbase is expensive if you are doing small transactions.
- Complex fee structure.
1. Users do not control their own wallet keys
Coinbase’s built-in wallet is convenient, but it doesn’t give you control over your private keys. The best crypto wallets allow you to customize your private keys using custom phrases or symbols. You cannot do this with the Coinbase wallet. Your keys are generated by Coinbase and are vulnerable to any platform security breaches.
However, Coinbase is compatible with many different hardware wallets, many of which allow you to customize your private keys.
2. Expensive for small transactions
Coinbase is known for its high transaction fees, which are higher than most other cryptocurrency exchanges in the market.
Due to the high trading fees, the basic version of Coinbase is not ideal for anyone who wants to actively trade cryptocurrencies. On the other hand, Coinbase Pro is more suitable for traders.
3. Complex fee structure
Coinbase fees vary by country, so we will focus only on US fees.
Coinbase fees are broken down as follows:
- Payment by bank account: 1.49%
- Coinbase USD Wallet: 1.49%
- Debit/Credit Card: 3.99%
- ACH Transfer: Free
- Wire Transfer: $10 for deposit, $25 for each withdrawal
- Encoding conversion: 2%
Most of these prices are considered “high” for cryptocurrency exchanges.
What is Coinbase Pro?
Coinbase Pro is a service that offers more powerful trading options for advanced investors. Pro allows you to place market, limit and stop orders, and you can also do margin trading. There are also lower commission fees.
Coinbase Pro provides you with additional tools that you can use to track the performance of your portfolio and the coins you monitor. For example, there are a variety of charts and overlays that help you track moving averages and make forecasts.
Even if you are a novice investor, Coinbase Pro is a service that you can easily transition to once you get to know the basic features of the platform.
Coinbase Pro platform fees
Coinbase Pro fees are much less expensive and complex than the fee structure of the basic version.
Coinbase Pro uses a “Maker-Taker” fee structure. Basically, the fee depends on the monthly trading volume and the liquidity of the digital currency at the time of the trade.
This fee structure is more transparent than the basic version. The only drawback is that all deposits and withdrawals must be made through a bank account. No credit or debit card purchases are allowed.
How to open an account on Coinbase
You can open a Coinbase account in just a few steps. Get started by accessing the platform on your web browser, or by downloading the mobile app.
First, you will enter your name, email address, and create a password to log in. Then you will be asked to verify your email and phone number.
Next, you have to provide state identification, such as a driver’s license or state ID, you just take a picture of your ID and upload it to the platform.
When your identity is verified, you can add your bank account and credit card information, and you’re ready to start trading cryptocurrency!
Remember: cryptocurrency is a high-risk investment. Be safe and diversify your investment portfolio with low risk and medium risk investments. If you want to invest in other types of securities, you might consider checking out an investment app like Robinhood. These applications allow you to trade both securities and cryptocurrencies.