Is Coinbase Safe? That is the question we will answer for you in this tutorial with great insights to help you choose the right Crypto Exchange in 2022.
As a cryptocurrency investor, there are some important factors you need to consider when choosing an exchange for your investments.
Such factors may include the user interface, method of payment, multiple coin support, fee structure, etc.
If you’re looking for a crypto exchange with these features, then Coinbase is one of your best options.
Aside from these factors, one of the major concerns of crypto investors about crypto exchanges is security.
So, if you are re considering trading on Coinbase, you may be wondering, “Is Coinbase safe?” In this article, you’ll learn all you need to know about Coinbase and how safe it is for your crypto investment.
Table of Contents
Is Coinbase Safe | What is Coinbase ?
Coinbase is an online Exchange platform where you can buy, sell, store, or transfer cryptocurrencies.
It was founded in 2012 in San Francisco by Brian Armstrong and Fred Ehrsam, starting as a brokerage service for selling Bitcoin to customers.
The platform has since then diversified its services to become a full-blown crypto exchange with services like payment plugin for merchants, coinbase index, etc. With more than 56 million users across over 100 countries, Coinbase is one of the biggest online crypto exchanges in the world. It is also the largest Bitcoin broker and exchange in the world.
Services Offered by Coinbase
There are a variety of services that the Coinbase platform offers to its users. What you can do on Coinbase includes:
- Buying and Selling of various coins such as Bitcoin, Ethereum, LTC, etc.
- Coinbase Wallet: enables users to store and have access to their crypto funds.
- Coinbase Merchant Solution: Through a dedicated plugin, the platform enables merchants to accept payments in cryptocurrencies on their websites. This plugin is supported by renowned CMS such as WooCommerce, Magento, and Shopify.
- Coinbase Index tracks the performance of all the assets listed on Coinbase.
- Coinbase Custodian Services: stores and safeguards crypto for institutions.
- USDC (USD Coin): Coinbase stable coin to mirror the USD currency.
Features of Coinbase
Coinbase features many facilities and capabilities that make it rank as one of the best exchanges in the crypto market. Hears are the top features of Coinbase.
Coinbase has a very user-friendly interface that lets you navigate the platform with ease. The website is mobile-responsive with the home page featuring handy information about the website and ready buttons to get you started in no time. This is part of the reasons why Coinbase is a popular choice among beginner crypto investors.
Although Coinbase started as a broker for just Bitcoin, it has extended its services to support a host of other popular coins. Today, Coinbase supports over 50 coins in its exchange and 500 tokens in total including NFTs (Non-Fungible Tokens).
Below is a list of some of the popular coins that Coinbase supports.
The availability and processing fees for each of the supported coins depend on factors such as country and payment method.
You can find a full list of Coinbase supported cryptocurrencies and their availability on the Coinbase Pro Help desk.
Crypto-to-crypto trading lets you maximize the fluctuations of a coin compared to another to make a profit.
For instance, you can trade BTC against ETH; if you sell BTC/ETH, you’re predicting that its price as against ETH will fall.
If the market goes in favor of your predictions, you make profit, and vice versa.
This method of trading is one of the fastest ways to make profit in crypto.
In Coinbase, you have access to more than 40 coins you can trade for BTC, about 11 coins for USDC, and about 7 coins for ETH. In total, Coinbase lets you trade up to 60 pairs for crypto-to-crypto trades.
On Coinbase, the USDC is stable with its price always equivalent to $1. So, you can easily know the fiat worth of your coins by first buying USDC and then using it to buy other coins. Note that crypto-to-crypto trading is available on Coinbase Pro.
There are different payment options available in Coinbase to suit your location and transaction needs.
Fees for transactions using any of these methods may vary.
The accepted payment methods include wire transfer, credit cards, debit cards, PayPal (for withdrawals only), and crypto deposit and withdrawal.
Deposits and Withdrawal Transaction Limits
The transaction limits on Coinbase depend on the payment method, type, and level of account you’re using.
Your account level depends on the level of verification you’ve done so far.
If you fully verify your account as a US resident, you can deposit up to $25,000 a day via ACH.
If you’re a European user, you may have up to €30,000 in your account per time.
For withdrawals, Coinbase generally does not restrict the amount you can withdraw to your fiat account.
However, the time you get your money may depend on the method of payment you use.
For instance, ACH transfers may take up to 5 business days before you can withdraw.
This is a Pro version of Coinbase with some advanced features for advanced crypto users. With the Coinbase Pro, you have access to advanced trading options such as margin order, stop order, and limit order.
The system for fees for Coinbase Pro is also different; the higher your balance, the lesser the fees.
This is a special program through which Coinbase lets users learn about crypto and earn at the same time.
On Coinbase Earn, you’ll be required to watch some educational videos about cryptos and crypto trading.
The videos are usually an average of 4 minutes long.
At the end of each class, the program requires you to write a test to qualify for the earnings. You get your reward deposited in your wallet after each quiz.
Over 90% of the world’s population of internet users surf the net with mobile phones.
So, the Coinbase mobile app helps ensure that the exchange is visible and accessible to mobile phone users around the world.
The Coinbase mobile is available for download at the app marketplaces; Play Store for Android users and App Store for iOS users.
As noted on their website, Coinbase does not charge customers for wallet services.
That means you don’t need to pay a dime for storing your crypt with Coinbase.
You do not also need to pay to transfer assets from one Coinbase wallet to another within the platform.
However, you incur some charges when you transfer crypto from Coinbase to a wallet outside the platform.
This kind of charge varies with different transactions and is disclosed at the time of your transaction.
For every time you buy or sell cryptocurrencies on Coinbase, the platform charges you a spread of about 0.5%.
Note that the spread may actually be higher or lower because of the fluctuation in market price between the quoted time and the transaction execution time.
Asides from the spread, you’ll also pay a Coinbase fee which is the greater of either a flat fee or a variable percentage fee.
The flat fee ranges from $0.99 to $2.99 depending on the transaction amount as illustrated here.
The variable percentage fee may be influenced by the payment type, region, or product feature involved.
Is Coinbase Safe To Link Your Bank Account ?
For many crypto traders and investors, knowing that Coinbase is secure enough for then to link their bank account is a big deal.
Because of the high amount of capital and value that crypto platforms hold, they are often the target for hacking attacks.
So, ensuring that an exchange is secure before investing is a top priority for most crypto geeks.
Coinbase employs different security techniques to ensure the maximum security of assets on the platform.
First, the exchange notes that 98% of the funds they hold are stored offline. This means it is out of reach for hackers looking for accounts to devour.
Again, Coinbase ensures that all users enforce the 2-step verification security feature on their accounts.
This means that beyond your username and password, you will have an extra means of proving that you’re the owner of an account before you’re granted access.
Also, the Coinbase website is hosted on a secured SQL (https) and user wallets are encrypted with the AES-256 encryption system.
To help keep user accounts more secure, the platform checks for password strength when during sign up or password reset.
Very importantly, all crypto funds held by Coinbase are covered by insurance.
However, the insurance policy does not cover losses due to individual account errors from the user, such as compromise of password.
How to Get Started With Coinbase
If you’ve chosen Coinbase as your crypto exchange, getting started is easy with just a few steps. You can follow these guidelines to set up your account.
- Download the Coinbase app for your device
- Open the app, enter your email to create an account, and click Start
- You will receive a verification message in your email. Click the link to verify your email.
- Enter your phone number, and a code will be texted to your number as you continue. Verify your phone number by filling in the code.
- Fill in other required details such as name, date of birth, Social Security Number, etc.
- Select your mode of usage e.g investing, online purchases, etc.
- Enter your income source and click on “Let’s Go”
- Follow the next set of prompts to link your bank account to your Coinbase account.
- Viola! You’re good to go on Coinbase.
The Coinbase app is relatively easy to navigate and use. So, you can buy, sell, or withdraw your crypto in few easy steps. Let’s consider some general guidelines for making transactions on the platform.
How to Buy a Cryptocurrency on Coinbase
- Log in to the Coinbase app and click on Get Started
- Select the crypto asset you want to buy from the list of available assets. Assume you select BTC for instance
- Input how much you want to buy. Coinbase lets you buy fractions of assets. So, you just input the amount in USD and the fraction worth of the asset is calculated. Note that the minimum amount is $1.99
- Preview the buy order. Coinbase takes a certain percentage of the order amount, so notice this charge.
- Click on Buy Now to confirm the purchase.
How to Withdraw Your Crypto on Coinbase
You can sell your crypto assets directly into your Coinbase fiat wallet from where you can withdraw into your linked bank account. Follow these simple guidelines.
- On the mobile app, select the Buy/Sell button.
- Click on Sell
- Enter the amount you want to withdraw
- Preview the withdrawal and confirm when you’re ready.
- Select the account you want to withdraw into and proceed.
However, note that your Coinbase withdrawal takes between 1 to 2 days to arrive in your account. Also, there’s no limit to the amount you can withdraw.
- User-friendly interface
- Wide variety of available cryptocurrencies
- Wide range of crypto trading and investment services.
- Low transaction minimum to encourage investments at every level
- High security and Insurance
- Relatively high transaction fees.
Alternatives to Coinbase
Coinbase is a popular choice among crypto investors, both for beginners and advanced users.
However, you can look up other platforms that offer similar services to compare and figure out which is most suitable for your investment. Such platforms include:
As one of the leading exchanges for cryptocurrencies, Coinbase has been trusted by millions of users worldwide.
The security and insurance system it has makes it one of the most reliable platforms for crypto investment and trading.
Nonetheless, the answer to the popular “Is Coinbase safe?” ultimately depends on your opinion of the platform.
You can learn more about crypto investments and what you need to know to become a profitable investor on Successful Tradings.
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