Coinbase is one of the most important and famous platforms for investors in Bitcoins or Altcoins like Ripple, Litecoin or Ethereum.
CoinBase is an exchange, in other words, it is an intermediary that allows you to trade in many of the cryptocurrencies in circulation, thanks to its widespread use: Coinbase is present in over 30 countries, with over 12 million users. A solid basis that has been synonymous with security and reliability since 2012.
Coinbase does not just offer the opportunity to tradein cryptocurrency,it also acts as a digitalwallet, that is an electronic wallet where you can make and receive payments in virtual currencies.
From its captivating and user-friendly interface, this exchange is also suitable for novices and the less-experienced trader in the cryptocurrency sector, who can make transactions, buy and sell digital coins and deposit their Bitcoin, Litecoin, Ethereum and similar in just a few simple steps.
What it is and how it works
To access the services of Coinbase, you must first register; this takes just a few minutes, and to complete this process, you need to submit a scanned imageof your ID (a passport or similar) to confirm your identity.
For ease of use, Coinbase is divided into three sections:
- Sellers who accept payment in cryptocurrencies;
- Operators and financial professionals, through GDAX;
- Developers, which can integrate Coinbase into their platforms.
Once all documents have been submitted, you then define the payment method, choosing between a credit card or bank account. In the case of payment by bank transfer, please note that it may take up to two or three days for the transaction to take place. Only sellers can you set up an account using Paypal. Personal information is not mandatory if you only intend to send and receive money, while it is obligatory for each purchase and sales transaction. We also highlight that data verification has the advantage of preventing fraud, while transactions remain anonymous because no banks are involved.
The commissions applied by the exchanges are probably not the cheapest on the Internet, but in terms of security and insurance (which we will discuss later), they are still advantageous. For standard purchases or sales, Coinbase applies 1.49%, for purchases by credit or debit card (Visa/Mastercard) 3.99%, while incoming or outgoing bank transfers cost €0.15.
Buying and selling cryptocurrencies with CoinBase
Purchasing cryptocurrencies is an easy and intuitive process: from your panel, simply select the Buy/Sell section and click on Buy, inserting the amount in euros (or dollars) that you want to invest in purchasing Bitcoins or Altcoins. Please note: your investment amounts are limited, which can be expanded through the Increase limits option.
It is also necessary to insert the reference number of the transaction that will constitute the reason for crediting the cryptocurrency purchased on your account. In any event, you will receive an email from Coinbase confirming the accreditation to your wallet. On the Buy screen, you will also find your balance and the order history.
To sell, you must select that option and enter the amount to be converted (BTC EUR); after the conversion, simply confirm and at this point, you see your portfolio in dollars, euros or pounds among others in the wallet. To cash in on trading, just click on transfer euro to your current account in Withdraw.
As mentioned at the beginning, Coinbase can be considered as 99% secure. Notwithstanding the fact that since its inception there have been no episodes of theft or leaks, we must always keep in mind that it is still a virtual service, and like any digital tool, it is prone to vulnerabilities.
Besides the basic necessary attention, Coinbase provides its users with options to increase their level of security. Firstly the password can be longer than 100 characters, while others exchanges have an average limit of 20; secondly, the platform is enabled for 2-factor authentication (2FA), i.e. via app Authenticator or text messages you can monitor the most recent accesses and the last operations regarding time, IP and the device used.
Do not underestimate that 98% of the funds are stored offline, therefore they are safe from attempts at online hacking, and traffic has encrypted SSL protection.
Lastly, Coinbase has always stated it carries out strict controls on the criminal records of their employees, and it makes them operate with very complex software and passwords, so as to protect their users’ capital.
Sending and receiving cryptocurrencies
Cryptocurrencies can be sent very quickly to anyone in the world, and this means of paying and receiving money is more secure than credit cards.
Also, in this case, Coinbase’s interface makes transactions simple and affordable for everyone: from the top menu, just select Send or Receive and choose the address where you want to send digital currencies to or where you want to receive them from respectively.
These options are particularly advantageous for sellers, who have the opportunity to enlarge their client base and guarantee refunds through the API service of Coinbase.
Coinbase Vault and Multisig
Coinbase has recently added two interesting features. The first is the Vault, i.e. the possibility of sharing an account with other people. Through this, security is given by the fact that for every operation the approval of all account holders is necessary, so if you were to suffer a theft of the key this would not entail any loss of money.
In order to maintain control of one’s portfolio, thereis Multisig, a triple key that keeps capital secure even in the event of a crash or site malfunction. A key is entrusted to the user, one to Coinbase and then there is a third shared one. Each transaction requires two out of the three existing keys, and then in the case (unlikely, but to be taken into account) of closing the platform, it is always possible to recover your funds.
One of Coinbase’s greatest conveniences is that it allows operations from anywhere; there is an app version for both Android and iOS, which guarantees making and receiving payments, as well as trading on cryptocurrencies at any time of the day. Therefore, it is possible to monitor the price of Bitcoins and take advantage of rises and falls to sell or buy.
As mentioned, Coinbase’s service is very rapid, and operations take place practically in real time. The only waiting times are those needed for crediting euro, after converting from virtual currency to your current account, but these are normal banking times that do not exceed three days. In any case, these extemporaneousness operations are particularly important when trading: inherent volatility in cryptocurrencies makes speed necessary so as to earn even on minimal variations.
Lastly, as promised at the beginning of this review, Coinbase offers a 100% insurance of the digital money it holds. For the user, this is a very important plus point because if the platform were to be robbed you would be reimbursed for any possible losses.
Their insurance covers derivative fraud, for example, from an any unlawful behaviour committed by an employee, from a transfer by hackers or from the platform’s security breach. Instead, Coinbase does not cover theft due to unauthorised access. The user has the task of choosing a highly complex passwordand to protect their access keys, which we recommend to keep on an offline external device such as a hard drive or a flash drive.