Table of Contents
- 1 What you need to know about Coinbase?
- 2 How Coinbase works?
- 3 Is Coinbase safe?
- 4 Why does Coinbase have a bad rapport?
- 5 Controversies
- 6 Coinbase Site and Usability Review
- 7 Coinbase – Customer review
- 8 What are the pros and cons of having a Coinbase account?
- 9 Writers take on Coinbase
In this post today, you will get everything you need to know about Coinbase. If you have been wandering in the new interesting world of cryptocurrency, you must have come about Coinbase. This is a company dedicated to but not limited to cryptocurrency.
I will start off by generally describing what it is before doing a Coinbase review. This is a limited company that focuses mainly on the digital asset ventures especially the cryptocurrencies. Coinbase majorly focuses on Bitcoin and its products but has in the recent years started incorporating the other altcoins such as Ethereum and Litecoin. Coinbase acts as a digital broker in the simplest explanation of its services. This company is also backed by the New York Stocks Exchange.
Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam who saw a middleman opportunity after Bitcoin started gaining market since its introduction in 2009. Coinbase first started off by buying and selling Bitcoins through Bank Transfers. It then extended its services to include the vault system for the Bitcoins. Over the years, it has grown in its users to about 7 million at the time of writing this article.
Coinbase has been the place to go especially if you are looking to purchase your first Bitcoin. This is because the company has invested heavily in making better algorithms and designing user-friendly interface that takes care of the extensive technicalities in owning any cryptocurrency. Also, they have partnered with many banks and offer payment services to over 32 countries worldwide.
What you need to know about Coinbase?
As was stated above, Coinbase has partnered with many banks around the world so as to enable the purchasing and selling of Bitcoins in the local currency. Also, people have many payment options ranging from EFT, SWIFT SEPA, and Ach. Also, they have introduced PayPal and Debit and Credit cards. Of course, these are Visa and MasterCard supported.
Coinbase mainly focuses on the purchases and sales of Bitcoins. However, it also performs an auxiliary function of storage. That is, they have wallets that you can rent out like a ware house to store your Bitcoin stash. You also store Ethereum and Litecoin. Your stash is safely kept and is guaranteed as they have purchases an insurance cover for their storage vaults.
How Coinbase works?
The most important thing to know is that Coinbase has a strong backing from the major financial industry movers including The New York Stocks Exchange. This means that the virtual currency business is fast becoming a major profitable activity in the financial industry. The business is licensed by the New York State Department of Financial Services to continue its operations. That plus the major banks that have invested more than the US $100 million into the company should be telling you that they have something here.
Coinbase operates more like a bank than a broker. This is so as the company was the first to receive the virtual currency operation license. This is also because of major integration with the major Banks it is operating with has resulted in the adoption of most Banking laws. For this reason, Coinbase requires one to fill out an extensive personal information and monitor the accounts to prevent money laundering. This should not water down your spirit as their services are secure and guaranteed which is hard to come by in virtual currency.
Is Coinbase safe?
Before venturing into Coinbase, you need to understand its inner working. Is Coinbase safe? This is the first question most people ask me. The answer is yes. Coinbase is very safe. As was mentioned in the above post, the company has invested heavily in insuring their vaults to minimize their losses. Also is the fact that the company is integrated with the major banking industries that also protect their investments.
Having received funds to the tune of US $ 75 million and above over the years since its conception, Coinbase goes, without doubt, one of the most secure virtual currency brokers in the world. This is also factoring in the investment they have received from the Japanese banks and securities exchange. As a rule of thumb, the most secure trader is often the most financed one in the market, and Coinbase is one.
How safe is Coinbase? Very safe. It has been received well in over 30 countries excluding China where it can operate freely without many hiccups. As was stated earlier and this should be in your head by now, Coinbase follows almost similar protocols with the banking industry. For this reason, any operation is well monitored to eliminate the possibilities of losses. This is also the reason why the company has been able to secure credits cards with ease.
Also, the company website has a user-friendly user interface that reduces the chances of making any errors while trading. I repeat again, this is the best place to go especially for the newcomers. The transfer fees are negligible and one can exchange Bitcoins to 159 different fiat currencies. The number of countries in the world. As you see, Coinbase is very safe.
Why does Coinbase have a bad rapport?
If you have been a regular in Bitcoin Forums; you will have seen a lot of negatives regarding Coinbase. Why is this? The answer lies in its operation. As stated earlier, Coinbase acts as a broker and is licensed by the New York Department of Financial services; it has to abide by the state law. The bad rapport comes from various fields which we will look.
To begin with, we will look at the banking laws. Banking laws of most countries if not all are against money laundering, the ones in the United States are no different. Coinbase requires one to fully disclose all personal information before opening an account. This does not sit well with most people. At least not the ones purchasing Bitcoins. Bitcoins came into being to set the standards for anonymity. At least, so that transactions cannot be tracked to the original owner. For what Bitcoin stands for is the decentralization of the Currency.
The other fact is that Coinbase monitors and controls your stash. After purchasing the Bitcoins, Coinbase keeps the Private Keys while you get the public keys. This means that your purchases are monitored keenly by the company and any wrong move results in the freezing and closure of the account. At least, your money is returned to your bank account. Although your money is returned to the bank account, the company fails to obey the rule of decentralization. That it, no institution should have full control of money. By having your private keys, Coinbase can devalue your Bitcoin especially when you purchase anything deemed illegal or adult themed material or services.
Also, there is the case of the company founders to have a one sided position when it comes to Bitcoin debate instead of being neutral. This has not gone well with the majority of the Bitcoin owners in the company. This is especially so with the marketing of Ethereum, the major Bitcoin competitor that resulted in a heated debate on the future of the company. Also considering the fact that their Canada branch has closed, it is raising more questions than answers. Could the company be doomed for failure? From the official channels, Vogogo, the Canadian payment service provider is set to close due to inability to generate enough revenue or in financial terms, to break even. Could the company be losing traction in the country? We don’t know.
Coinbase Site and Usability Review
Bitcoin transactions are peer-to-peer, unlike other monetary transactions.
When you open Coinbase on your web browser; it looks something like this:
If you are already a member or have a Coinbase account; the page looks something like this after you are signed in:
(Of course, the currency and Bitcoin value would be different)
In order to buy or sell you bitcoin or any other cryptocurrency (Ethereum or Litecoin), all you need to do is:
- From your Dashboard, navigate to Buy/ Sell.
- Now, enter the amount in USD and it shows up, how much worth of Bitcoin you can buy, right below.
- You can switch your payment methods: from your bank account to Coinbase USD balance or vice versa.
From the above screenshots it is quite clear; that the Coinbase site is pretty neat and the user interface is pretty straight forward. No hassle in navigating around the website. The same is the case with buying your bitcoin. The same is the case with selling bitcoin. Just navigate to Sell Bitcoin tab and follow same procedure.
Coinbase – Customer review
After reading many online platforms, I have found it prudent to list some reviews here.
There have been customers whose accounts were erroneously debited and that took some time before the account was reconciled. This is after much complaining and waste of time. They take their time to reply your email.
There have also been customers whose accounts were frozen and written off for trading large sums of money. This was also after trying to exchange Bitcoins for Fiat after they gained value on LocalBitcoins (LBC). The reason for this is that they consider such individuals high risk.
What are the pros and cons of having a Coinbase account?
Now that you have gone through the information scoured from all the relevant sources and have a fairly good grasp on what is Coinbase, the final thing would be to look at the pros and cons to make the decision whether you are better off with or without a Coinbase account.
The company has many advantages over the other brokers. The following are the most definitive.
- Coinbase is very secure with your money. This is due to its impressive security measures and algorithms. There is also the fact that they have insured all the Bitcoins in their safes so that takes care of any hacking and eventual loss of virtual currency.
- Coinbase is spread all over the globe; with over 30 countries supporting the Bitcoin payment services and transaction. Also one can exchange their Bitcoins to 159 different fiat currencies.
- Coinbase is backed by major Banks in the world and also with the New York Securities Exchange which makes it ultra-secure when it comes to money as their partners involved.
- There is also the fact that the company is adequately financed and licensed. This makes it one of the best brokers of virtual currencies in the world.
- By incorporating credit cards, the transaction is instantaneous in the purchasing of Bitcoins.
Like any other company dealing with virtual currency, it has some major weaknesses and most of it all have come short of expectations.
- The company monitors your trading activities and has the liberty to freeze and close your account without notice when you do anything illegal.
- When you trade on large sums daily, you will be viewed as high risk; and your account can be closely monitored or eventually be closed.
- By purchasing the Bitcoins, you do not essentially own them as the company owns the private keys. Your role is simply to tell them who and when to give the Bitcoins. However remote, there can be a loss of a lot of money when the company officials decide to run away with the cash.
- Using fiat money; it takes a minimum of a week for your Bitcoin orders to be processed.
- One is required to give personal information which goes against everything cryptocurrency.
Writers take on Coinbase
Coinbase is a wonderful company. A pioneer in the world of payment of virtual currency, in this case, majorly Bitcoin. It is secure and adequately financed to ensure the operations go smoothly. I would advise any beginner in Bitcoin trading to first try out Coinbase. This will give you the knowledge of how the virtual trading works. The company also has introduced a new service, Global Digital Asset Exchange(GDAX) an application that enables people to exchange Bitcoins.
However, I would not advise the regulars to get into this. What with the monitoring your transactions and the information you need to give before you get an active account? This goes against the decentralization concept that Bitcoin is trying to enforce. Actually, the information you give is just short of blood type or your DNA. There is also the fact that your account can be closed at will; and that you don’t have the freedom to buy whatever you want when using their Bitcoins.