Coinbase is reputed to be the world’s largest Bitcoin broker, currently serving a total of 32 countries (although this may soon drop to 31 as Vogogo, their Canadian payment service, shuts down). In addition to direct sales of Bitcoin at, or close to, the current average market rate (plus 1.5% fee), Coinbase facilitates low fee (0.25% for takers) trading of both Bitcoin and Ethereum on its exchange platform.
Coinbase offers the following additional services and benefits: Instant purchase of up to $1000 worth of BTC per week for verified credit card holders. A wide variety of fiat deposit and withdrawal options. Instant transfers between Coinbase users. A well-documented API for developers. Well-designed and intuitive user experience. Insured Bitcoin deposits. A debit card from Shift Payments linked to your Coinbase balance.
Online and mobile wallet services, with multi-signature security option to prevent unauthorised movement of funds. Coinbase is often recommended to newcomers as one of the easiest ways to acquire their first bitcoins. The company has invested a lot of time and money into making their user experience smooth and painless. Their extensive banking partnerships allow transactions to be made via EFT payment, ACH / SWIFT / SEPA transfer and, as a recent introduction, major credit cards and PayPal.
If Coinbase is so successful, why does it have such a bad rep? It’s no secret that Coinbase attracts a lot of animosity, if not outright hostility. A “Coinbase” search query on Reddit’s r/bitcoin soon reveals endless user complaints, interspersed with relevant news. In response to either such post, no shortage of anti-Coinbase vitriol will be detected from the commentariat. The situation is similar on the BitcoinTalk forum and other discussion venues; mention Coinbase to Bitcoiners in person or on IRC, Twitter or Slack and you’re about equally likely to hear criticism as praise.
Now, a lot of people love Bitcoin for offering sanctuary from the grand and petty tyrannies of the banks and corporate payment services. Any company which re-introduces such “user experiences” will inevitably encounter heavy flak. In short, Coinbase is punished for often behaving like the most sinister of banks. Such views must be tempered by the fact that, for years, Coinbase has served the market more reliably and faithfully than many (ex-)exchanges, failed or as-yet-unfailed, which could be mentioned. However, Coinbase has also pulled its share of questionable moves over its lifetime.
Bottom Line: Should You Use Coinbase?
At times, it appears that Coinbase is more in the business of attracting investors than servicing clients or wisely developing Bitcoin. Given the foregoing, it’s impossible to recommend Coinbase without some caveats: You should never rely on Coinbase to act as your wallet. This applies equally to every other exchange and third-party service offering to store your coins.
The oft-repeated maxim is: if you don’t hold the private keys, you don’t own the bitcoins. While Coinbase’s multi-sig Vault offers some extra security, as get to retain at least one of the keys, it’s still nowhere near as secure as storing your bitcoins personally. If you’re uncertain as to how to properly store your bitcoins in a cold wallet, consider the purchase of a suitable hardware wallet.
Don’t use Coinbase if you intend to use your bitcoins for anything “naughty.” To avoid future legal entanglements, your best option a decentralised exchange, such as LocalBitcoins or Mycelium Local Trader. Finally, if you’re a Bitcoin holder or believer, before using Coinbase you should consider whether their actions, affiliations and incentives are properly aligned with the cure principles of Bitcoin, such as openness, decentralisation and fungibility.
While Coinbase may be a cheap, popular and convenient option, they’ve demonstrated a disturbing lack of regard for those unique properties which ultimately give Bitcoin its value. Coinbase is not for Bitcoiners It’s an admitted simplification to say that Coinbase isn’t for Bitcoiners but instead for cryptocurrency newcomers, Ethereum enthusiasts, venture capitalists and those with an abiding sentimental attachment to the reassuringly blue corporate colour schemes and wealth-peacocking of traditional banks.
A lot of people feel more comfortable entrusting their money to a service which makes Bitcoin appear more conventional and familiar. This is justifiable given that the surplus of investment in Coinbase (supplemented at the time of writing by a $10.5 million injection from the Bank of Tokyo Mitsubishi UFJ) implies that the company is well-capitalized; a rich exchange tends to be a sound exchange. If you’re wary of leaving substantial sums of fiat or crypto on an exchange, Coinbase is probably one of the more secure options, although a thorough audit is the only way to prove that for a fact.
Coinbase Exchange Pros
- Easy to understand
- Great UI for beginners
- Relatively low fees
Coinbase Exchange Cons
- You don’t control your private keys
- Accounts are monitored
- Poor support
- Funds can be delayed for up to 72 hours
Reviewed : 99bitcoins.com
Published : 99bitcoins.com
Source : Digital Asset