Having trouble finding the best exchange for bitcoin trading? Are you in search of complete details regarding the best way to buy bitcoin before actually signing up? If that is the case, then you have landed on the right site. In this article, we will give you a complete on one of the biggest bitcoin exchanges; Coinbase.
It does not matter if you are a novice user or skillful trader, Coinbase offers the best interface along with advanced tools for all kind of users. Coinbase is easily available on any devices along with its wallet accessible from anywhere. Coinbase is the world’s largest Bitcoin exchange/trading platform with more than 15 million users along with a total of 20 billion dollars in exchanged cryptocurrencies. This shows the prominence of Bitcoins in today’s world.
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Background on Coinbase
Coinbase was established in the year 2012 in San Francisco, California as a part of Ycombinator. It is one of the oldest and largest exchanges existing today across the globe. Currently, it operates over 32 countries serving more than 15 million users with 28.7 million wallets and 46k merchants. Coinbase consists of various payment options out of which one of them is the credit card. Not all the exchanges allow credit card for payment. It allows a user to trade at a fixed price (already set) that is based on the market value, which is not same with other exchanges where users have to trade on market. This feature boosts up transaction rate to be faster.
Working of Coinbase
Coinbase is the largest exchange of cryptocurrencies in the world. It has an intuitive interface which is helpful for all newbies. Coinbase is easily available on any computer, Android, and iOS device. Transfers are instant as soon as the verification is completed. In order to carry out any transactions, your bank account must be linked to your Coinbase account. Setting up a Coinbase account is easy as well, the steps are.
Signing up – your name, email address and a password are required to sign up.
Account type – there is an option to create either a business account or an individual account. You will be asked to confirm your email address and then to select the account type.
Verify your phone number – verifying your phone is necessary to enable two-factor authentication as a part of the security process.
Choose a payment method – you will have to choose a method to make a payment between bank transfer and credit card. However, Coinbase will set up small transfers to and from your account to bank account for verification purpose. A screenshot of credit card is necessary for credit card transactions to be enabled. Credit card transactions are instant for most of the countries.
Buy cryptocurrency – after setting up all the above steps, you can buy cryptocurrencies once you have funds in your account.
How safe is Coinbase?
Coinbase is one of the most secured platforms existing today. It has incorporated all possible security measures to safeguard user’s data. AES-256 is enabled in bank level on all the servers to store routing and account numbers. Coinbase employees are restricted from accessing any data, which is regulated by frequent background checks on them. Third-parties are cut down by enabling SSL technology, that prevents third-parties from wiretapping on a Coinbase user. A third-party known as Plaid Technologies Inc. receives your bank credentials that are required for verification. No credentials are shared with Coinbase. You can also restrict your bank details from sharing it to Coinbase by opting ‘Other Bank’ when linking your bank account. Coinbase uses FIPS-140 USB drives which consist of transaction and account details, which is then printed and distributed to deposit boxes worldwide. 98% of the user’s data is stored offline.
Furthermore, Coinbase consists of a multi-signature (multisig) vault additional 3-key security for your Coinbase accounts and wallets. There are three keys (Coinbase key, shared key, user key) to protect your money and transactions. Adding to all these security measures, Coinbase also comes with an insurance provided by Lloyd’s of London, which covers all losses that are a result of any violation of Coinbase’s cyber or physical security.
Identity verification is vital to identify Coinbase’s customers which can be done through website or smartphone. Coinbase recommends using Google Chrome to complete your identity verification process. ID verification involves IDs or driver license. High volume customers of Coinbase are required to verify their physical address. A verification postcard is sent with a code in it to the user’s address, which should be entered on the address verification page to resume the functionality of the account. The code sent to the user is valid only for 14 days.
Wallets introduced by Coinbase comes free of cost. However, a network transaction fee is applied on the transfers to other platform address. There are exchange rates on buying and selling of cryptocurrencies, completely based on the market rate at the GDAX platform, applied at the moment of the exchange, with a spread consisting of up to 50 basis points.
Transaction fee mainly depends on the payment method, location and other situations, which is calculated as the greater of minimum fee and percentage fee. The minimum fee is a flat fee applied to the transactions over $200, which added at the time of execution. The percentage fee is not steady, it varies with the payment method and location of the user.
Percentage fee for different regions are mentioned below
The fee applied to buy bitcoins with credit/debit cards is 3.99% for the users in Australia. Users from Canada will be charged a fee of 3.99% as well for using credit/debit cards to buy bitcoins. European users will be charged a flat fee of 1.49% along with a fee of 3.99% on credit/debit cards when you buy bitcoins. Bank transfers (SEPA) involving deposits for European users is free of cost, whereas a fee of EUR 0.15 is applied on withdrawals. The fee applied to UK users is same as that of the European users. The users from Singapore will have to pay a flat fee of 1.49% to buy/sell bitcoins along with a fee of 3.99% applied on credit/debit cards. For the users from the US, 4% base rate is applied to all the transactions. US bank account for buying (1.40%+$0.15minimum fee), selling (1.40%+$0.15minimum fee); Coinbase USD wallet buying(1.49%), selling (1.49%); credit/debit cards involve 3.99% fee. Deposits are free of cost for US users.
Certain amount of fee is applied to merchant tools as well
If payment with bitcoin is accepted from your side as a merchant and if you store the funds in Bitcoin itself, then no fee will be imposed on the transactions. However, exchange of bitcoins into your local currency will cost you 1% fee (varies with the volume). Coinbase does not charge for deposit and withdrawals, but your bank might charge an additional fee to process.
Limits on Buying and Selling
The buy/sell limits are different for each individual. You can view the limits on the verification page. The buy/sell limit per week along with buy/sell limit on credit/debit card will be displayed on the page. The limits applied purely depends on three factors – the age of your Coinbase account, your activity and buying history and the level of verification of your account.
Coinbase has a Knowledge Base and FAQs page, where you can find answers to many queries. If the queries are not resolved then you can contact Coinbase via email or submit a ticket or ask the support bot Ada for help through live chat. However, due to increasing demand, the support system might require 24-72 hours to resolve your issue.
Coinbase provides its services to the following countries:
Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States.
Coinbase Shift Card
Coinbase has this new feature called Shift Card which is provided by VISA to Coinbase customers based in the USA. Shift Card is supported in certain states and territories in USA through which you can spend the Bitcoins present in your account in the places where VISA is accepted. Shift Card comes with an initial cost of $10, but it does not involve any fee on domestic transactions or any fee in exchange for Bitcoin to USD.
Coinbase consists of two types of interfaces. A simple user-friendly platform for novice users and a complex trading platform for professional traders. You can use the same Coinbase account and credentials to log in to the GDAX platform. Advanced users use this platform to process pending orders along with entry stop and entry limits with other types of orders. It involves 2 level pricing and a depth of a book, which will guide traders to explore prices and available liquidity more closely.
Coinbase Bitcoin Wallet
Coinbase wallet for your account is available easily and can be accessed either from the web, Android smartphone or even by iPhone or iPad. Rather than acting as a pure Bitcoin wallet, Coinbase acts more like a bank by controlling all the private keys.
Security of wallet
Wallet, with a multisig vault, is a great addition to Coinbase. The company controls the bitcoins in your wallet and you will only have to safeguard your Coinbase account login and password. Coinbase offers advanced security setup. Adding to the security level, a vault is introduced as a solution for storing bitcoins in bulk. This is an essential feature involving a business transaction with multiple users. Vault requires multiple approvers. For example, if a vault consists of two users, both of them should approve for a transaction to proceed for withdrawal. If you are not satisfied with any withdrawal request made by another user, the withdrawal will be canceled. All withdrawals from vault require 48 hours to process. Coinbase can suspend your vault accounts at any time.
Multisig vault has been introduced as an additional security measure. It involves three keys out of which one key is held by the user or account holder. Any of the two keys are involved in spending the funds. The shared key will be encrypted with your password which avoids funds to be held by another user.
Privacy of Coinbase wallet involves user’s personal details along with email address and phone number as a part of verification. It abides by all the KYC/AML laws. Two-factor authentication is carried out via SMS or email address. The payment address keeps on changing each time and cannot be accessed by others.
Coinbase is the most recommended and highly reliable bitcoin exchange platform. The simple and sleek interface of Coinbase makes it goof-proof for all the novice users. Advanced traders use the GDAX platform, which consists of advanced tools and a slight complex interface. The users can trade directly on the market with GDAX platform. Various option methods are offered by Coinbase to its users. Coinbase has extended itself to a greater length in terms of security setup. Multisig vault is introduced as an additional security measure. 98% of transaction data is stored offline on a hard wallet or a paper wallet. Coinbase presently provides its services for around 32 countries.
A controversy stating user’s account to be monitored had taken place. Customer support should be improved, but this is the same for all Bitcoin exchanges.
You might have procured all the details regarding Coinbase after reading this pretty long review. If you are a novice user then Coinbase is perfect for you to step into this booming world of cryptocurrencies. Coinbase is highly reliable and trusted by many users across the world. The exchange rates are quite low compared to other sites with a facility of making credit card payments. Coinbase wallet and the Shift card is helpful for many users to carry out transactions smoothly.
Hektor E J
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