Coinbase – Is it worth it?

What is Coinbase?

Founded in 2012, Coinbase is a reputable and the world’s biggest Bitcoin broker. The company is based in San Francisco and offers an exchange, developer API, and a wallet. They currently serve 32 countries including the United State, Canada, Singapore, United Kingdom and other European countries.

How does it work?

Although Coinbase started on its own as a broker that sells Bitcoins directly to customers, in 2016, the company began operating GDAX. GDAX is a Bitcoin exchange platform where users can easily trade and exchange Bitcoins with each other.

Today, Coinbase and GDAX share the same back-end. This means that whenever you’re buying bitcoins on GDAX, you’re buying from the same source as Coinbase. However, the GDAX bitcoin purchasing process is a bit less user-friendly.

Here is how you can get your Coinbase and GDAX account up and running:

  1. Sign up and complete the verification process with Coinbase – To open an account with Coinbase, you only have to supply them with your full name, your email address and then accept the company’s user agreement.
  2. Link your bank account with Coinbase – For you to buy Bitcoins, you will be required to link your bank account to Coinbase to allow for transfers. Every Coinbase account has a wallet that is used for sending and receiving bitcoins. Then you can deposit money into your Coinbase account.
  3. Sign up and then complete the verification process with GDAX – Again sign up with GDAX. Now you can transfer the money you deposited on Coinbase to GDAX instantly. This is because they share the same back-end.
  4. Make a trade on GDAX – Coinbase’s GDAX allows you to calculate the digital currency market rates. Once you have funds on your GDAX dashboard, go to the left-hand side of your screen and place/make a market order as you may wish. Here you will buy the bitcoins at the market rates. Coinbase charges a fee of 0.3 % for market orders.

Coinbase prices and fee: How much does it cost?

Although nobody would like any cryptocurrency exchange fees, it’s important to note that these are profit-making businesses, and they aren’t charities. They require money to function normally. They have standard exchange fees across all industries.

But how much does it cost? Coinbase platform charges are about 3.75-4% for both credit card and bank fee. Their exchange rates attract a lot of new customers although getting your money into the cryptocurrency may be a bit expensive.

The multi-million dollar company earns huge amounts of money since they’re newbie-friendly and very convenient. For instance, if you buy $200 of Bitcoin, you have to pay a fee of $8(roughly).

Coinbase controversy

I bet you probably know this! However, for those who are new to Coinbase you need to know that Coinbase has had a lot of controversy as a member of the Bitcoin community. You need to consider this before deciding to buy Bitcoins on Coinbase.

Below are some of the points of controversy. Read on to find out more.

  • Affiliate reward abuse – Formally Coinbase offered one of the most generous affiliate programs. However, without warning, they went back on this deal.
  • Tracking how users spend Bitcoins – Coinbase tracks how you spend on their Bitcoins. Also, they can freeze or close your account if you start selling other things on the darknet, gambling, adult service and any other suspicious businesses.

Is Coinbase safe and Reliable?

Although Coinbase has received multiple complaints from their users in the recent past, I believe they have heard these complaints and tremendously improved their customer support.

According to one of Coinbase’s worker-Dan Romero, their services have never been hacked. This is because Coinbase follows strict security practices since it’s a financial as well as a technological company. Some of these practices include wallets being stored under AES-256 encryption, all traffic being run over encrypted HTTPS, a simple 2-step verification method and 98% of the available funds being stored offline.

This sounds pretty safe, but it can’t guarantee you 100% security because there are security hackers as well. However, it’s one of the most reliable sites to use.

Pros

  • Easy for newbies to buy bitcoins
  • High buying and liquidity limits
  • Availability of instant buying

Cons

  • Track how users spend coins
  • Limited payment method