Among the first crypto exchanges in the world, Coinbase became recognized when it started publicly trading at over $380, offering the cryptocurrency space a market cap of $99.6 billion on a diluted basis. Is the word Coinbase new to you? Are you confused about what it does? Here’s a simple explanation.
An exchange platform, Coinbase lets users buy and sell cryptocurrencies like Ethereum, Bitcoin, and Litecoin. The app also allows you to convert a cryptocurrency to another. Coinbase also shows you the analysis of trends and prices of different cryptocurrencies like other stock exchange platforms.
Coinbase was founded in 2012 as part of the Ycombinator. It started as a platform to send bitcoin but has continued to bring in more services. To date, the company has raised over $550M from investors.
Offered by Coinbase:
Brokerage Services
As stated earlier, Coinbase offers an opportunity for users to buy and sell significant cryptocurrencies. The company’s reputation, user-friendly interface, and marketing strategies make it the go-to alternative for newbies and gurus in the crypto world.
However, users don’t have complete control of their funds. Once you create an account, Coinbase will store the coins for you, equivalent to keeping your money in a bank.
Coinbase Wallet
Coinbase introduced a mobile wallet compatible with android and IOS devices. This wallet stores your private keys, which gives you access to your funds. The exchange started as a wallet, then as an exchange platform only, and now offers wallet services once more.
Coinbase Pro
Coinbase Pro is a trading platform. However, unlike the Coinbase brokerage services where you can buy or sell crypto at a premium, this program targets more experienced users. It allows you to trade several cryptocurrencies like Bitcoin, Litecoin, and Ethereum at a relatively lower fee than the brokerage services. You can also get to enjoy other advanced trading options.
Your trading volume determines how much fees you make, and it’s calculated in dollars. The taker fees are deducted once you make a trade. The maker fees are applicable once you make an order, but it’s not removed immediately. If you wait for another user to match your order (someone who wants to buy crypto at the price you’re selling), you’ll pay the maker fee.
It’s straightforward to have part of your order as a taker and the rest as a maker, depending on how much your order can move one time.
You can also buy bitcoin in Singapore using Coinbase Pro’s app.
Coinbase Pro Fees: For a trading volume of up to $10000, the maker and trader fee is 0.50%. From 10000 to 50000, you will incur 0.35% maker and trader fees. On the other hand, if your trading volume is more than $5, you will incur no maker fees and a relatively low taker fee.
Merchant Solutions
Online merchants can use Coinbase to accept payment of goods and services through a dedicated plugin. The plugin is supported by robust computer management systems like WooCommerce and Shopify.
Other Coinbase Programs and Projects:
- USDC-a stable Coinbase cryptocurrency
- Custodian programs- protecting cryptocurrencies for institutions
- Coinbase Index is a unique way to track the performance of assets listed on the platform.
- Paradex-a space to trade directly from your wallet
- Earn.com is a unique way to earn as you learn. This program offers several classes and exams to know about cryptocurrency. Users can make cryptocurrencies worth $115.
Coinbase Payment Methods
You can make payments with either of the following methods.
- Credit cards
- Debit cards
- Paypal. However, you can only use this method for withdrawals.
- Direct deposit or withdrawal of cryptocurrencies
- Wire transfer
Coinbase Costs
The fee structure is a bit confusing, but we’re going to break it down. If you’re trading on Bitcoin, the final price is determined by:
- The fee on Coinbase Pro amount to +0.5%.
- Transaction fees are the greater of fixed-rate transaction fees below $200 or a portion of your transaction.
Once you log in to the Coinbase platform and purchase crypto worth $100, Coinbase uses the exchange rate on Coinbase Pro to determine how much crypto you’re going to get. A fee of 0.5% is added to Coinbase Pro transactions, for American buyers, the transaction charges are as follows:
- Transactions up to $10 are charged $0.99
- The transaction fees for transactions between $10-$25 is $1.49
- Transactions between $25 and 50 are charged $1.99
- Transaction between $50-200, the transaction fee is $2.99
For transactions exceeding $200, the fee structure is percentage-based and depends on the payment5 method you use. Transactions from U.s bank accounts incur 1.49%, whereas transactions or deposits from PayPal or debit cards incur 3.99% transaction fees.
For example, users can only get $97 worth of cr5yptiocurrency for a $100 deposit. That fee may seem not much today, but it has an adverse impact after some time. Suppose you decide to deposit $100 every month to your Coinbase account for 20 years. If your crypto returns around 10% every year, you’ll have $66,700 after the Coinbase fees. Without the fees, you’ll end up with $68,700, about 4.6% of your returns.
Hopefully, these fees are likely to decline as the market becomes more saturated. Lowering costs is not a new phenomenon, stock trading is there, and the cryptocurrency space will soon get there. Probably Coinbase competitors might offer low transaction fees to win more customers. That might lead to a price decrease, and users might probably be able to trade crypto for free.
Coinbase Pro’s pricing structure is a bit more straightforward than the Coinbase platform. The fee structure is based on your asset liquidity and trading monthly. However, with Coinbase Pro, users can only make deposits via bank account and wire transfer.
Other Features of Coinbase
User-Friendliness
Coinbase is easy to use- even those without knowledge in tech can operate the site using standard end devices. Signing up is straightforward and doesn’t take much of your time. The sign-up process involves uploading a state-issued card (this is important, particularly if you intend to use Coinbase Pro).
Users can link their bank accounts to minimize trading costs. The interface is designed with the user in mind. The search feature helps you sift different cryptocurrencies available. Users can also set to recur purchases as many times as they want. Users investing in unpopular cryptocurrencies are not left. For example, it’s now possible to convert Eth to Augur.
Security
Coinbase is among the most secure online crypto exchanges. 98% of the user’s funds are stored offline in various locations across the globe, which gives traders peace of mind and a sense of security for their crypto assets.
Your assets are stored in a free wallet. However, if you want to feel more secure, you can keep them in third-party wallets. Signing in requires you to finish a two-factor authentication. The system also has AES-256 and biometric fingerprint encryption on your private keys.
While typical exchange platforms aren’t insured with a deposit corporation, all funds held by Coinbase are insured. The company understands that the insurance covers losses related to employee theft and Coinbase cybersecurity but does not cover losses resulting from data breaches to Coinbase accounts.
Coinbase was the first exchange to receive approval in the U.S. It has Anti-money laundering and knows your customer practices like other banks. Coinbase can track your account and can close your account if you violate the standard operating procedures.
Buying Limits
Once you sign up with Coinbase, you can buy small amounts of cryptocurrencies as you progress. You will need to confirm your account with your personal information, phone number, and photo id.
The highest amount you can transact in a day as a verified U.S resident is $25,000. The limits to transact can also depend on the payment method. For instance, credit card purchases have low buy limits than ACH transfers.
Cryptocurrencies Offered on Coinbase
Users in the USA can choose to trade with 56 cryptocurrencies on the platform. That number is more significant than any other offered in other exchange platforms.
These cryptocurrencies include Bitcoin (BTC). Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Stellar Lumens (XLM), Ethereum Classic (ETC), Zcash (ZEC), Augur (REP), Dai (DAI), USD Coin (USDC), 0x (ZRX), Basic Attention Token (BAT), and Algorand (Algo).
Customer Support
The platform has a dedicated team of customer agents. You should expect to receive feedback 48-72 hours once you submit a ticket via email. The support will address your issue in the first response.
Final Words
With strict adherence to security protocols, an easy-to-use interface, and a straightforward sign-up process, Coinbase is the way to go for most crypto investors. Although the fees are slightly higher, users have a cheaper alternative; the Coinbase Pro platform.
With the information on this article at your disposal, you have all it takes to understand the aspects of the Coinbase platform and Coinbase fees. The crypto space is highly volatile. Therefore, avoid investing all your eggs in one basket and invest only what you can afford to lose.