Coinbase Exchange: what is and how it works
Published: 30 March 2021 by Andrew
If the name of Coinbase tells you something… you are certainly not wrong! It is in fact the best known cryptocurrency exchange, with which you can buy and sell Bitcoin and other digital currencies.
But is it really worth using this exchange to trade digital currencies?
In this Coinbase guide you will find:
- What it is and how it works
- What are its conditions
- What are the best alternatives
What we ask ourselves, in fact, is whether it is better to turn to quality brokers such as eToro, ForexTB and Trade.com.
We wanted to review everything you should know about this exchange and we have drawn the consequences: let’s find out together what they are!
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
What is Coinbase
Let’s start with the ABC. Coinbase is the largest Bitcoin exchange in the world. It is available to users in over 30 countries, and has an excellent market share in some of the more attractive countries, such as the United States and the United Kingdom. Currently, it has more than 4 million customers around the world.
Founded in 2012 as part of Ycombinator, Coinbase is therefore one of the oldest crypto trading platforms in circulation.
The exchange was launched as a broker (selling Bitcoin directly to customers) and only in May 2016 did Coinbase also start operating as a GDAX. It is therefore a real Bitcoin exchange, where investors can exchange cryptocurrencies with each other through the platform made available by the operator.
To date, Coinbase allows its customers to buy and sell, among many others, some of the most popular digital currencies in the world, such as:
- Bitcoin BTC
- Ethereum ETH
- Litecoin LTC
- Bitcoin Cash BCH
- Ethereum Classic ETC
Is Coinbase a scam?
While we believe Coinbase is certainly not the best way to buy and sell Bitcoin, one thing is certain: Coinbase is definitely not a scam.
However, this does not mean that it is the most informed choice for our readers who wish to trade in Bitcoin and other cryptocurrencies.
Although it is a legitimate operator, Coinbase has certainly encountered numerous technical difficulties in its life and has not particularly appreciated customer support.
If we add to the above that the platform charges its customers with certainly not low costs, it follows that our conclusion is soon formulated.
Those who want to make investments in cryptocurrencies certainly do not have Coinbase as a fundamental point of reference. Much better, however, to resort to the trading activities of the best online brokers such as eToro, ForexTB and IQ Option.
Is Coinbase safe?
However, in order to provide an answer, at least concise, we must understand what is meant by security.
As we have already stated, Coinbase is not a scam. It is an authorized operator to provide its services such as Exmo, Coinmama, CEX and Bittrex. The exchange invests huge resources to protect the assets of its customers and the platforms through which it allows them to operate.
The problem is, if anything, linked to the safety of the operation at the base of all exchanges.
Coinbase, like many other operators belonging to the same sector, has had to face several hacker attacks and although it has certainly defended itself better than what has happened to other exchanges, we feel we advise against keeping your digital currencies on the platform.
However, being a regulated operator, this exchange separates client funds from the company’s operating funds. In turn, client funds are held in top tier bank accounts, which Coinbase does not use to manage and finance its business.
As a result, even if Coinbase were to become insolvent, funds held in bank accounts could not be claimed by Coinbase or its creditors, but would be returned to customers.
Coinbase also claims that 98% of customers’ cryptocurrency funds are held in cold, offline wallets. Hence, it is a measure that should protect customer funds from loss or theft by hackers. However, past experience with other exchanges teaches us that you are never 100% sure you are immune from losses …
In any case, we can say that this is not a scam. It is important to make this observation because there are so many Bitcoin scams (just think of what happened with the Bitcoin System that scammed tens of thousands of Europeans).
Does Coinbase exchange worth it?
Let’s try to understand how it is possible to obtain cryptocurrency and trade on Coinbase.
The first thing to do is to open an account. After entering the first basic data, you will have to select whether to open an “Individual” or “Business” account.
A further identification phase will follow, in which Coinbase will send you an SMS containing a unique code, to verify that you are the legitimate owner of the device.
Then, as you will be asked to deposit funds, you will need to set up a payment method. You will also be asked to enter the billing address linked to your preferred payment method.
After completing the KYC (Know Your Customer) procedure, uploading a copy of your valid identity document, such as a passport, driving license or national identity card, you will need to verify the payment method chosen.
Now you can finally click on the digital currency you want to buy: enter the total amount in euros (or the equivalent in local currency) you want to buy and pay for the transaction with your verified payment method.
The purchase will be completed in a short time and the digital coins will be deposited in your Coinbase account. You will therefore have the opportunity to withdraw them in a private wallet, send them to another cryptocurrency exchange or simply leave them in your Coinbase account to sell them at a later time.
Here emerges the main limitation of the exchange: waiting. All you can do is wait for your cryptocurrencies to increase in value, because:
- On exchanges you can only invest upwards
- The commissions would affect too much if you opened and closed a large number of positions
So goodbye to the advantages linked to the volatility of the sector. How then to take advantage of it?
Coinbase: the best alternatives
Investing in CFDs is arguably the best choice for cryptocurrency trading. Can:
- Use a simpler trading platform with which you can practice with complete peace of mind using the demo versions;
- Invest up and down, opening long and short positions with the same ease. In other words, with CFDs it is not necessary that the market is necessarily bullish but only that you are able to correctly predict its evolution;
- Negotiate these instruments without any commission, considering that brokers do not charge any fees for opening or closing the position (their only source of remuneration is almost always represented by the spread).
Let’s find out what are the best platforms to invest with this tool.
eToro is the first choice for those who want to invest in the trend of cryptocurrencies, also thanks to the possibility of using an automatic trading tool to invest in a safe and verified way.
In fact, Copy Trading allows you to get the same profits as a professional even if you are only a beginner. To take advantage of it, just register on the official website, access the Top Traders section and identify the users with the best returns in the cryptocurrency sector.
The most is done: from that moment on you will only have to choose how much you want to invest in them and start copying. Whatever they do, it will be replicated on your account, as will their results.Invest like a cryptocurrency pro with eToro's Copy Trading
ForexTB is perfect for beginners who want to take the time to train. With a simple free registration, in fact, it is possible to download what is unanimously recognized as the best cryptocurrency trading course available online today.
We are talking about a free course, strongly oriented to practice and which in its pages explains to you in detail how to invest in the most effective way.Download the ForexTB course for free and learn how to invest in crypto
Furthermore, considering the volatility of this market, it is useful to be able to take advantage of a service that notifies you of all changes in the price of the assets you are keeping an eye on.
Trading Signals allow you to always know when a crypto reaches a certain price or undergoes a certain variation, so as not to miss even an opportunity to invest. The service is totally free for all subscribers.Register on ForexTB and take advantage of the Trading Signals for your investments
IQ Option is the broker recommended for those who want to enter the world of cryptocurrencies but do not have large capital available.
To start trading on your platform, in fact, a minimum deposit of € 10 is sufficient and the single operation can be opened with € 1. In the face of these figures, it is clear that there are more advantages than disadvantages, since any loss would be rather limited, while the earning potential remains intact.
Despite these low thresholds, on IQ Option you can also register with a free demo account to familiarize yourself with its functions and with its advanced highly customizable proprietary platform.Register for free on IQ Option and invest in crypto with only € 10
Coinbase allows its users to buy cryptocurrencies through the most popular payment methods, such as credit card or debit card.
On the exchange, customers can buy and sell Bitcoins with a linked bank account, a SEPA transfer, a Paypal account (but only for sale, you cannot buy Bitcoin with Paypal using Coinbase) and many other payment methods.
But be careful: carrying out these operations is certainly not free.
Coinbase commissions are in fact quite competitive when compared with those that are received by other exchanges, but incredibly salty if instead we compare them with what is applied by CFD brokers, with which it is possible to trade cryptocurrencies for free.
Coinbase reviews and opinions
Among the main points of merit for which Coinbase is famous … there is certainly not good customer service. Response times are quite long and often not particularly satisfactory responses are obtained.
This adds another sticking point to Coinbase. In fact, we would like to remind you how the customer support of the brokers that we have had the pleasure of reviewing in our guides is always qualitatively very positive.
In addition to the above we have already summarized, we cannot fail to dwell at least briefly on the numerous reports on the problems manifested with Coinbase. Many users complain of problems in using the platform, and other difficulties in managing cryptocurrency wallets.
In this sense, remember that with the Coinbase wallet, your cryptocurrency wallet, your Bitcoins are actually “controlled” by the company itself. You will therefore always have to trust that they keep your currencies safe, and you will also have to keep your login and password safe if you do not want to encounter unwelcome surprises.
Now that we have provided you with the information you need to analyze Coinbase … we recommend that you move on, and instead experience how easier and more convenient it is to invest in cryptocurrencies with the best brokers we have chosen for you.
So take a look at the eToro, ForexTB and IQ Option sites, open a free demo account with them and find out how convenient it is to trade Bitcoin & co. CFDs!
If this is your first time making or want to make an investment in cryptocurrencies, take a look at what they have to offer you. Register for free on:
Its headquarters are located in San Francisco, California.
Its foundation dates back to June 20, 2012.
Despite its great popularity, this Exchange does not have official licenses to operate.
Yes, cryptocurrency CFD brokers, regulated and with the possibility of short selling.