CoinBase Payment Method

Coinbase is the one of the biggest cryptocurrency companies around, supporting 42 countries, with more than 20 million customers around the world. Coinbase has a wide array of services but their main service allows users to buy and sell Bitcoins through a bank account, credit card and debit card. The rates you’ll get on Coinbase are fair in general, however the customer support is terrible.

 

Coinbase Overview

 

you’re new to Coinbase, this is perhaps the one thing you need to take into account before making your decision to buy cryptocurrency through Coinbase. Closed or frozen accounts Account closures are probably the most commonly held grudge against Coinbase. Due to the company’s tight integration with traditional banking laws, such closures are inevitable. For better and / or worse, Coinbase prides itself on its legislative compliance

 

Coinbase Services

 

Coinbase brokerage service

 

The main service Coinbase offers is a brokerage service for buying and selling cryptocurrencies. New cryptocurrency users often find themselves buying their first Bitcoin through Coinbase thanks to the company’s reputation, marketing and relatively friendly user interface. On the downside, one of the main complaints users have towards Coinbase is the lack of control of users over their own funds. When you open a Coinbase account you don’t have direct access to your coins and you don’t get any private key or a seed phrase. Coinbase stores your coins for you – It’s the equivalent of putting your cash at the bank, you don’t own it, the bank does.

 

Coinbase Pro

 

Formerly known as GDAX, Coinbase Pro is a cryptocurrency trading platform. As opposed to the traditional Coinbase brokerage service, which simplifies buying cryptocurrencies at a premium, Coinbase pro is aimed at more experienced users. Coinbase pro allows users to trade several cryptocurrencies including BTC, ETH, LTC, BCH and ZRX. Fees are considerably lower than the brokerage service and there are advanced trading options as well.

 

 

 

 

Coinbase wallet

 

In 2018 Coinbase launched their independant mobile wallet for iOS and Android. The wallet stores the private keys on the user’s device and only they have access to the funds. This brings Coinbase full circle as it started out as a wallet, transitioned to an exchange only (claiming that they are not a wallet) and now they are offering wallet services again.

 

Merchant solutions

 

Coinbase supplies online merchants with the ability to accept cryptocurrencies on their website via a dedicated plugin. The plugin is supported by some of the biggest CMS (content management system) around such as Shopify, Magento and WooCommerce.

 

Additional projects

 

Aside from the above, Coinbase supplies additional services such as:

  • USD Coin (USDC) – A stablecoin built by Coinbase.
  • Coinbase Index – Tracking the financial performance of all Coinbase listed assets.
  • Custodian services – Safeguarding cryptocurrencies for institutional investors.
  • com – A service acquired by Coindesk for filtering out spam emails.
  • Paradex – A platform for trading directly from a user’s wallet.

 

Coinbase Currencies and Payment Methods

 

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Litecoin (LTC)
  • Bitcoin Cash (BCH)
  • EOS (EOS)
  • Stellar Lumens (XLM)
  • Ethereum Classic (ETC)
  • Zcash (ZEC)
  • Augor (REP)
  • Dai (DAI)
  • USD Coin (USDC)
  • 0x (ZRX)
  • Basic Attention Token (BAT)

 

Coinbase accepts the following payment methods:

  • Wire transfer (including ACH in the US and SEPA in the EU)
  • Credit cards (new cards aren’t currently accepted)
  • Debit cards
  • PayPal (withdrawal only)

 

Fees

 

Coinbase’s fee structure is a bit tricky so I’ll try to break it down as much as possible. When you buy Bitcoins from Coinbase the price you pay consists of the following:

 

  • The market price on Coinbase Pro +0.5%
  • Transaction fee – A flat fee for transactions below $200 or a percentage of the transaction (the greater of the two

 

Most transaction fees are 1.49% for standard buy and 3.99% for credit card buys. Depositing money is free via ACH transfer but otherwise costs $10. The full fee structure can be seen here.

 

As you can see, giving a straight answer to how much you will pay in fees is a bit tricky with Coinbase and that’s also one of the main complaints the community has towards the company. Coinbase can also decline your purchase in cases of extreme price shifts, as happened many times in the past. Having said all that, Coinbase still has one of the lowest fee structures around when comparing to other brokerage services like Coinmama and CEX.io. Transactions between Coinbase accounts are free of charge. Outside transactions to your Coinbase account will require 3 confirmations before they will show up in your account.

 

Buying Limits

 

Once your Coinbase account is set up you will be able to buy a small amount of Bitcoins until you raise your limit. For example, US residents who have a credit card on file in their Coinbase account (as backup) will be able to purchase up to $1000 worth of Bitcoins a week.

 

In order to raise your limits you will need to do the following:

 

  • Provide and verify your phone number
  • Provide and verify your personal information
  • Provide and verify your photo id

 

If you are a fully verified US resident you can reach the highest limit which is currently $25K a day. Limits may also be set depending on the payment method you choose to buy the cryptocurrencies. For example, ACH transfer has higher limits than credit card purchases on Coinbase.

Supported Countries

 

Coinbase offers its services in 103 countries: Angola, Benin, Botswana, Cameroon, Ghana , Kenya, Mauritius, Namibia, Rwanda, South Africa, Tunisia, Uganda, Zambia, Armenia, Bahrain, Brunei Darussalam, Hong Kong, India, Indonesia, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyzstan, Macao, Maldives, Mongolia, Nepal, Oman, Philippines, Singapore, Taiwan, Uzbekistan, Australia, New Zealand, Andorra, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, Aruba, Bahamas, Barbados, Bermuda, Canada, Cayman Islands, Costa Rica, Curaçao, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Trinidad and Tobago, United States, British Virgin Islands ,Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay .

 

Coinbase Customer Support and Public Opinion

 

Coinbase has a very extensive knowledge base. Most standard requests will probably find an answer there. If you are submitting a support ticket via email, expect a response within 48-72 hours (from personal experience). Coinbase is also operating a phone support line, although from reader feedback we got, it seems it’s hard to get someone to solve your problem there.

As for the quality of the support, the overall impression is negative. Most of the time the support team won’t dig deep into your issue on their first response, and it is quite common to receive “canned responses” that don’t really address the problem. Many people in the community complain that Coinbase isn’t really very support oriented and that many times issues aren’t explained to the customer.

 

Furthermore, BBB rates Coinbase “F” with a failure to respond to hundreds of complaints. To sum it up, there has been a lot of controversy over Coinbase within the Bitcoin community. If you’re new to Coinbase, this is perhaps the one thing you need to take into account before making your decision to buy cryptocurrency through Coinbase.

 

Closed or frozen accounts

 

Account closures are probably the most commonly held grudge against Coinbase. Due to the company’s tight integration with traditional banking laws, such closures are inevitable. For better and / or worse, Coinbase prides itself on its legislative compliance.

 

 

Coinbase was first to receive US regulatory approval. As a result, Coinbase has AML (Anti-Money Laundering) and KYC (Know Your Customer) practices much like any bank. Expect Coinbase to track how you spend “their” coins and to summarily shut your account for the following activities:

 

  • Transactions related to adult services.
  • Bitcoin gambling, including skill-based gaming. Sale or purchase of contraband through darknet markets.
  • Resale of coins on other exchanges, particularly those without AML / KYC.
  • Other arbitrary reasons which rub their algorithm the wrong way.

 

As you can see, you can get your Coinbase account shut down rather easily. While you will almost certainly get your money back, it will likely prove to be an inconvenient, frustrating and potentially costly experience.

 

Additional criticism

 

Aside from the above, Coinbase has been the focus to additional criticism including: Affiliate reward abuse – Coinbase offers a referral program however doesn’t always pay its partners according to what is stated (based on my personal experience).

 

Taking a stand in Bitcoin debates – There are many “internal debates” within the Bitcoin community that Coinbase voiced its opinion on. Usually it’s expected from a service to remain neutral in these debates and follow the natural market movements.

 

Patenting blockchain – Coinbase has 9 patent filings for cryptocurrency-related “innovations” including “Bitcoin exchange”, “hot wallet for holding Bitcoin” and “tips button”.

 

Such patents are obviously not Coinbase innovations and obviously clash with the open source nature and the philosophy of Bitcoin. Coinbase expects people to trust them, and to refrain from using any such patents to block competition. Frankly, no company, agency or entity can or should be trusted with legal authority over any aspect of the Bitcoin ecosystem. Bitcoin was designed to obviate the need for such trusted parties.

 

Coinbase vs. Other Exchanges

 

In the following section I will compare Coinbase and its trading platform (i.e. Coinbase Pro) to other trading platforms around. PreviousCoinbase ProFees:0.25%Availability:103 CountriesRead reviewVisit exchangeGeminiFees:0.25%Availability:Multiple locationsRead reviewVisit exchangeBinanceFees:0.1%Availability:WorldwideRead reviewVisit exchangeRobinhoodFees:0%Availability:25 US statesTo be reviewedVisit exchangeCoinbaseFees:3.99%Availability:33 CountriesRead reviewVisit exchangeCoinbase ProFees:0.25%Availability:103 CountriesRead reviewVisit exchangeGeminiFees:0.25%Availability:Multiple locationsRead reviewVisit exchangeBinanceFees:0.1%Availability:WorldwideRead reviewVisit exchangeRobinhoodFees:0%Availability:25 US statesTo be reviewedVisit exchangeCoinbaseFees:3.99%Availability:33 CountriesRead reviewVisit exchangeCoinbase ProFees:0.25%Availability:103 CountriesRead reviewVisit exchangeGeminiFees:0.25%Availability:Multiple locationsRead reviewVisit exchangeBinanceFees:0.1%Availability:WorldwideRead reviewVisit exchangeNext

 

Coinbase vs. Coinbase Pro

 

If you’re new to crypto then it will probably be easier for you to use Coinbase (i.e. the brokerage service) than Coinbase Pro (formerly GDAX). As the name suggests, Coinbase Pro is for more experienced users that know how to handle advanced trading methods. However, if you are an experienced trader, Coinbase Pro offers a much cheaper solution with 0.25% fee at max, which is one fifth of what you would pay for the brokerage service (and in some cases even less). You can read our complete Coinbase Pro review here.

 

Coinbase vs. Gemini

 

Gemini is a crypto exchange founded by the Winklevoss brothers. Gemini’s fee structure is even more complex than Coinbase’s, and overall fees are higher. The starting point for Gemini is 1% whereas Coinbase Pro charges 0.25%. In order to beat that, Gemini users will need to trade over $50K in a 30 day period. Having said that, you should always check the market exchange rate on both exchange since there can be some differences. While most of the time they are more or less the same, in some cases price differences can occur and then the overall price you pay may be cheaper on Gemini (since the lower price compensates for the higher fee). Click here to read our complete Gemini review.

 

Coinbase vs. Binanace

 

Binanace is a strictly crypto to crypto exchange. However recently the exchange started accepting credit cards for cryptocurrency purchases. These purchases have a very high fee of over 5%. When looking strictly at crypto to crypto exchanges Binance wins the competition with an extremely low fee of 0.1% as opposed to Coinbase Pro’s 0.25%. Also Binance offers a wider variety of cryptocurrencies. Click here to read our Binanace review.

 

 

 

Coinbase vs. Robinhood

 

US investors can also use the Robinhood trading app to invest in Cryptocurrencies. However, unlike Coinbase or Coinbase Pro, they will not have direct access to their coins. This means that they cannot withdraw Bitcoins or other cryptocurrencies from the app. This solution is good only if you’re looking to trade and not to hold cryptocurrencies. Robinhood is available in 25 US states and claims to have 0% trading fees, which is very competitive, even when compared to Coinbase Pro. In addition to trading cryptocurrencies, Robinhood also allows you to trade traditional stocks.

 

Is Coinbase FDIC Insured?

 

According to Coinbase’s support page all digital currency that Coinbase holds online is insured. Coinbase holds less than 2% of customer funds online. The rest is held in cold storage. note that the insurance policy covers any losses resulting from a breach of Coinbase’s physical security, cyber security, or by employee theft. This insurance policy does not cover any losses resulting from the compromise of your individual Coinbase account.

 

Digital currency is not legal tender, is not backed by the government, and digital currency accounts and value balances on Coinbase are not subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protections. For US customers, Coinbase stores all customer fiat currency (government-issued currency) in, custodial bank accounts, or in U.S. Treasuries. If you are a United States resident, your Coinbase USD Wallet is covered by FDIC insurance, up to a maximum of $250,000.

 

How do I Get My Money Out of Coinbase?

 

If you want to withdraw money from Coinbase you can do so with the following options:

 

  • To your bank account
  • To your PayPal account
  • To your cryptocurrency wallet (if you’re withdrawing cryptocurrencies)

 

There is no option to withdraw fiat currencies to your credit/debit card.

 

 

 

 

How Long does it Take to Withdraw from Coinabse?

 

Usually withdrawal are instant from Coinbase however it may take up to 3 days for your bank to process the transfer. Cryptocurrency withdrawals should arrive within the hour (depending on how long it takes the next block to be confirmed). Coinbase may delay digital currency transactions sent from your Coinbase account if they suspect that you did not authorize the transaction. In this case you can either:

  • Wait 72 hours and the transaction will go through automatically
  • Accelerate the withdrawal by verifying your identity again

 

Is it Safe to Buy on Coinbase?

 

In general, Coinbase is considered a very safe place to buy cryptocurrencies.

 

Can I Keep my Bitcoins on Coinbase?

 

Yes, you can keep your Bitcoins on Coinbase, however I wouldn’t recommend it. It’s always best to keep your Bitcoins on a non-custodial wallet (i.e. a wallet where only you hold the private keys). Keeping your Bitcoins on Coinbase is like keeping your money in a bank. It’s very secure, but you don’t have control over it – the bank does.

 

Conclusion – Is Coinbase safe to use?

 

Coinbase is simple and easy to use. The company has invested a lot of time and money into making their user experience smooth and painless. However you are not in control of your coins and your transactions are being tracked. I think Coinbase is currently focused on growth and less on satisfying its existing customer base which can be seen by the amount of negative reviews they receive and that’s a shame. However, if you don’t encounter any issues then the price is fairly competitive. My personal opinion is this – if possible, use Coinbase to buy cryptocurrencies, the service is solid. However, once you buy your coins get them the hell out of there to a wallet that you completely control, like a hardware wallet.