Coinbase is the well known brand when it comes to the cryptocurrencies space, and the topmost in terms of the Bitcoin/cryptocurrency exchanges. It has been celebrated and covered by the most famed newspapers and magazines like The Wall Street Journal, Bloomberg, The New York Times, and Time.
It is claimed to be the world’s most popular way to buy and sell digital currencies like Bitcoin, Litecoin, and Ethereum. Coinbase was founded by Brian Armstrong and Fred Ehsram in 2012. It is headquartered in San Francisco, California.
Coinbase is the largest Bitcoin exchange in the world. Coinbase has 10.6 million customers with more than $20 billion in digital currencies exchanged. It has approximately daily Bitcoin volume of $40,000,000. It supports 32 countries across the world. It exchanges Bitcoin and other cryptocurrencies like Ethereum and Litecoin.
Coinbase created GDAX i.e. the Global Digital Asset Exchange in 2014. GDAX was specifically developed for the professionals who are having high volumes of trading of cryptocurrencies.
Coinbase offers the following services and facilities:
- Digital currency wallet, after you sign up as a user. It allows you to store digital currency securely.
- Connecting your credit card, debit card, or bank account. It facilitate you to exchange digital currency into and out of your local currency. It speeds up your transactions.
- Mobile Wallet which works on your iPhone or Android.
- Insurance protection for the digital currency stored on the Coinbase servers.
- Instant exchange of digital currencies which you can send and receive and get it instantly changed to your local currency.
- Secure offline storage is used to store the huge amount of the digital currencies.
- Multi-signature vault is offered to you so that you can have full control of your private keys.
- Scheduling is provided for your buys on weekly or monthly basis for spreading your investments in digital currencies over a period of time to average out the cost.
- Coinbase Merchants facility allows you to accept payments from anywhere in the world. You also have to pay low transaction fees.
- Charting facility for graphical presentation and analysis of the price movements of the cryptocurrencies.
- A streamlined user interface which is very good for use by new traders.
- Fast trades for cryptocurrency exchange transactions.
- Support to several fiat currencies such as US Dollars, Euros, Canadian Dollars, Australian Dollars, Singapore Dollars and British Pounds.
- Low fee for transactions.
Many of these services and facilities are not offered by the other cryptocurrency exchanges.
The various advantages and disadvantages or pros and cons of the Coinbase are as given below:
- High liquidity for the users.
- Easy process to buy Bitcoin, Ethereum, and Litecoin.
- Instant purchase available with your credit card as backup.
- Integrated debit and credit cards.
- Newbie friendly.
- It is well integrated into the US banking system.
- Robust security features like two-factor authentication, customized daily transaction limits, encrypted passwords, email encryption, over 97 percent of coins kept in cold storage, the private keys used for authorization of cold storage transactions held in fragments between offline hard drives and paper in different locations, etc.
- Easier to use than Kraken.
- Limited payment methods as compared to other cryptocurrency exchanges.
- Possibilities of manipulation, as Coinbase may track how you spend or use Bitcoin, Ethereum, and Litecoin.
- Verification causes delay and hassles, which are against the spirit of cryptocurrencies, e.g., ease of transactions and anonymity.
- Incidents of malfunctioning of Coinbase system/platform.
- It supports only a few currencies like USD, CAD, EUR, GBP, SGD, and AUD.
- Limits imposed on transactions like daily limits, payment method limits, etc.
- Coinbase does not offer margin trading, futures and derivatives trading, or short selling.
- The personal data collected by Coinbase, may be misused. There have been allegation of major privacy violations against Coinbase in the past.
- Some of the users complain of glitches in the website.
- IRS may be looking into Coinbase users’ activities.
All said and done, Coinbase faces the issues related to cryptocurrencies in general like legal issues, regulatory compliance, lack of government recognition, etc. Any systemic issue affecting cryptocurrencies would equally affect Coinbase also. The specter of government clamp down still looms large on the cryptocurrencies including Coinbase.
Yet, Coinbase remains one of the best cryptocurrency exchanges with many advantages over its peers. It is good for users on the basis of various criteria.