Coinbase Exposed (UPDATED 2018): Is it a Safe Place to Buy Bitcoin? | VKOOL

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What is Coinbase?

Coinbase is a popular beginner’s marketplace to buy and sell cryptocurrency with a debit card, credit card, direct bank transfer, or  you can start crypto trading.

They boast serving over 10 million consumers with over $50 billion exchanged in currency to 32 different countries.

 

 

 

Fundamentals of Coinbase

They offer a simple way to trade and store cryptocurrency with a free app and or desktop application.  They specialize in Bitcoin, Litecoin, and Ethereum as of now; they are planning to add more alt coins for sale.

Fees range on numerous factors and there is a reduced cost for direct bank transfers, though it’s not as quick as using a debit or credit card. The higher fee range can range from 3.99% o to 1.49%. They are also unique in that they offer a set price for cryptocurrency that does not fluctuate like a live market.

Using Coinbase to Get Cryptocurrency

The first thing to do is make sure you verify an account.

  1. Create an account and certify your email.

The basic identification is your email, name, state, and a secure password of your choosing.

  1. Select the Account You’d Like

There is an additional 4 part process to purchase, where you can select either an individual account or business account.

  1. Certify your Telephone Number

For added security you will provide your full phone number.

  1. Select your preferred payment method

You can select a credit or debit card, or link a bank account for lower fees but longer days needed for a transfer.

If you decide to use a credit or debit card the transaction will be a lot quicker, but you aren’t able to have as much currency exchanged and you will incur larger fees.  To make sure an account is secure they will process 2 small transactions which must be verified by telling the company how much was exchanged.

  1. Purchase

At this stage you can finally decide on the amount you’re looking to get, and the type of cryptocurrency you’re most interested in.

You will then be given a credit for what you purchased.

Can you rely on Coinbase?

The company has a lot of information available to help users feel secure in their processing of funds.

Secure account handling

They offer the same kind of encryption service to their servers as banks do, and they offer 2-Factor Authentication.  They also highlight some of the things consumers can do to ensure their account is more secure ,as well as mentioning the fact that they do not call consumers. They specify that they would never ask for sensitive information which is what would phishers do.

Every time there is a sign in from a different IP address, the website notifies the user to let them know of new activity. This can make it easier to spot a sudden unexecuted charge that was not authenticated.

Legitimacy

They have been operational for a long time and have built a reputation. They have complied with many government regulations such as the Bank Secrecy Act, and with countries money transfer regulation.

They also abide by all US federal and state laws. Other countries do not have the same kind of financial regulation that the US follows.

Secure Funds

Even in the case of bankruptcy any and all funds would still be secure, and the company would not hold onto any cryptocurrency. They also store the majority of consumer’s sensitive information in cold storage, reducing the risk for hacking. They have deposit boxes stored globally to protect against sudden theft.

There is also FDIC insurance up to $250,000 for US fiat currency.

The company also provides tips to help consumer’s better maximizer their safety.

Consumer Support

They have 24/7 customer service as well as a phone number.

Phone Number: (888) 908-7930

A support page is also offered for chatting with a bot as well as a FAQ to help get a better understanding for common issues.

Are you Eligible for Coinbase?

Residents of the US, UK, Australia, Canada, Singapore, and certain European countries can take advantage of Coinbase. If you’re from Canada or Australia you can only buy but not sell.

Limits to Buying and Selling

The amount you’re able to buy and sell depend on numerous factors such as the status of your account, which can increase in the amount you’re able to transfer if you provide more secure verification. For any and all beginners there is a $5,000 maximum for bank account sanctions, and a maximum $50,000 sell limit.

If your goal is to go beyond this limit then it’s necessary to provide identification to be eligible.

Sending Crypto

If you’d like to set up a transfer of your funds to another wallet, then you’d fist have to hit the ‘Send’ button after logging into your account.

After this you select the wallet then the amount you want to send, and finally enter the wallet address of the location where funds will be sent to.

Receiving Crypto

To begin the receipt transaction you click on the ‘Account’ portion of either the official website or your app, then go on the ‘Receive’ part where it will look similar to this.

There is going to be a result to provide the wallet address where funds can be transmitted which will appear similar to this:

Consumer Warning

There are limitations to Coinbase as they try and ensure that consumers all follow legal guidelines, not using their crypto for illicit means. Their tracking ensures a banning of users who either use their crypto to gamble, purchase things on the dark net, or transferring to Local Bitcoins.

This will result in a closed account, which is why it’s best to start a wallet where you are the sole person who operates your funds.

Coinbase vs GDAX

They are owned by the same company but with Coinbase it’s more for the average consumer, with GDAX there is more analytics. GDAX is intended more for seasoned users who have an experience with trading. There’s also  the option for margin orders, limit orders, market orders, and stop orders in case your currency drops to a price where you’d like an automatic sale.

Coinbase vs Kraken

These are giants in the old of market exchange, with Kraken there is the possibility for many different kinds of currency exchange. You can also use fiat currency to trade and fees vary depending on the amount and kind of purchase.  There’s the option of many kinds of coin including Dogecoin, Dash, Monero, Bitcoin Cash, Ripple, Litecoin and a few others.

Coinbase vs Gemini

With Gemini you get the option to trade using fait currency. They work only with Ethereum and Bitcoin, and have different fee structures depending on what the person is looking for. Much like Coinbase you can store your crypto on their site, but it’s often advised not to do so for added safety.

The company has businesses in both the UK, and Canada.

Coinbase vs BitPay

Bitpay is in the running for the largest processor of Bitcoin transactions. They also only focus on Bitcoin, and unlike Coinbase, model themselves after single cryptocurrency. This makes it more specialized and catered to certain customers. They have a major distribution and have partnership deals with major corporations.

Their pay structure is also much different with different models depending on if the user is part of a business, or a single entity.

Coinbase vs Bittrex

A key difference between these 2 is that with Bittrex, there is more of a learning curve, but you also get numerous more currencies. With Coinbase you’re limited to only the 3 major crypto offerings, Bitcoin, Ethereum and Litecoin.

Fees are also lower on Bittrex and their there is much more analytics provided to help analyze market data.

Coinbase FAQ

  1. Is Coinbase safe?
    They have been around for some time and though there is the occasional frozen account, most people said there weren’t any issues with safety.  Like any other online account, keeping keys and personal information hidden is advised.
  2. What are the Coinbase fees?
    This depends on a lot of different factors such as what country you are based out of and what method of payment is used. Check their support section to learn more.
  3. What’s the Coinbase exchange?
    They have a full exchange process for people to send and receive either via their mobile app or on a desktop.
  4. What are common Coinbase reviews?
    People often said it was simple and easy to setup, and that it’s an easier marketplace for getting crypto.
  5. Where is the Coinbase login?
    It’s on the right hand side of the front of their website.
  6. Can I use Coinbase in Canada?
    Unfortunately they no longer offer Canadian EFT transfers. But they do offer credit and debit card charges.
  7. Is Coinbase active in the UK?
    They have limitations to UK users in terms of payment methods and there were some customers who said they were unable to withdraw.
  8. What are common Coinbase wallet reviews?
    Typically people will advise to store your crypto on different places from where it is purchased from, and reviews for their wallet were mixed.
  9. Is Coinbase safe to link to a bank account?
    They have a good reputation online and judging from customer input, it appears to be a reliable source.
  10. Is Coinbase anonymous?
    With added effort multiple accounts can be set up from different names. It is not fully anonymous on its own.
  11. Why does Coinbase need my ID?
    This is to protect against fraudulent claims and to increase the amount of purchases and trade amounts.
  12. What happened to the Coinbase security breach?
    They have an insurance policy and do not appear to have had a security breach.
  13. Is Coinbase legit?
    They are a popular marketplace and have many users which attest to its quality.
  14. Does Coinbase have Ethereum?
    They offer Ethereum and have a detailed graph to show its progression in terms of profit.
  15. Is Coinbase down?
    Looking at the website there does not appear to be any delays or issues related to exchanging.

Summary

For its ease of use and streamlined apps, Coinbase is considered a simple marketplace for crypto. You should do your research and look at the website to determine if the amount you’re looking for and payment method is satisfactory, since the fees are somewhat higher than other marketplaces. They do offer a user friendly experience however.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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