Coinbase is the world’s largest Bitcoin currency exchange and is probably the most widely used of the crypto currency exchanges. It has quite a solid reputation having been founded five years ago so there is quite a lot of experience behind the outfit. Several investors have sung its praises although it has come up for some criticism of late due to the fact that it was down for hours when there were huge spikes in Bitcoin transactions especially on 29 November 2017 when the Bitcoin price spiked to record levels only to crash spectacularly by about 20% just a few hours later.
Is Coinbase safe?
Coinbase is the world’s largest Bitcoin exchange, so this is a common question.
Yes, Coinbase is a Bitcoin company based in San Francisco, and backed by trusted investors.
Coinbase is the world’s largest Bitcoin broker, and also offers an exchange, wallet, and developer API.
In this article we will review Coinbase and its brokerage, exchange, as well as its wallet.
How Does Coinbase Work?
Coinbase’s simple interface aims to make it easy for first-time buyers to purchase bitcoins.
The most popular payment methods for Coinbase customers are buying with a credit card or debit card, and also using a bank transfer.
What Payment Methods Can You Use on Coinbase? What About Fees?
Coinbase supports 30+ countries. The payment methods available depend on your country.
Actual deposit of currencies into your Coinbase account is free. Coinbase then charges a 1.49% fee per purchase.
U.S. customers may add a Visa or Mastercard credit card as a backup payment method. If a backup credit card is available, Coinbase “instant buy” will be enabled for up to $1,000 worth of bitcoin per week.
Does Coinbase Support Your Country?
Coinbase offers its brokerage services in the United States, United Kingdom, Canada, Singapore.
Coinbase also supports the following European countries:
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland.
Your Coinbase “wallet” can be accessed on the web, or with the Coinbase apps for iOS and Coinbase App for Android.
Coinbase controls all private keys, and acts more like a bank than a true Bitcoin wallet.
Coinbase should only be used to buy or sell bitcoin, and not to store funds (unless you use the Multisignature Vault).
Coinbase Bitcoin Wallet Security
Users may create three types of wallets with Coinbase: wallet, vault, and multisig vault.
Coinbase Bitcoin Wallet
With the Coinbase wallet, the company controls your bitcoins and you must trust that they keep your coins secure.
You must also keep your Coinbase login and account password safe.
Coinbase is a VC backed company with over $100 million in funding and likely has a very strong security setup. The point of Bitcoin, however, is that users have the ability to control their own money. So, move your bitcoins into a wallet you control after you buy.
Also note that Coinbase can shut down your account and block access to your funds at any time.
Coinbase Vault
Coinbase offers a unique solution for securing larger amounts of bitcoin.
Bitcoin stored in a Vault account can be protected by multiple approvers. If a user adds two approvers to his vault, both must confirm that the withdrawal is valid before it processes.
All withdrawals from Vaults take 48-hours to process. The time delay provides a safety net:
If you see a withdrawal was requested that you did not make, the withdrawal may be cancelled.
Like the regular Coinbase wallet, you must trust Coinbase to secure vault funds. Vault accounts can also be shut down by Coinbase at any time.
Multisig Vault
Coinbase understands that many users want complete control over their funds.
Its multi-sig vault is a 2 of 3 wallet, where Coinbase has one key, one key is shared, and the third key is held by the account holder.
Any two of the three keys allows spending of funds. If Coinbase goes down, you still have both the shared key and your own key. Funds cannot be held because the shared key is encrypted with your password.
Privacy
Your name, phone number, email, and a number of other personal details are required. Coinbase knows your addresses and balance at all times and can connect this with your identity and IP address. You must trust Coinbase’s nodes to verify transaction data.
Because Coinbase has buy/sell features, it must follow all KYC laws. There have been reports that it tracks how its users spend bitcoin.
Each payment request uses a new address, which helps prevent other users from connecting Bitcoin addresses together.
Coinbase received a score of 11 out of 100 from the Open Bitcoin Privacy Project’s Spring 2015 report.
Coinbase USD Wallets
A Coinbase USD wallet will let you store dollars in your Coinbase account. There are a few advantages to using a Coinbase USD wallet:
You can store dollars in your account so that when you do want to purchase bitcoins you don’t have to wait five days for a bank transfer to process.
You can spend bitcoins online without exposing yourself to Bitcoin’s volatility.
Coinbase Debit Card
Shift Payments released a debit card that connects to your Coinbase account. It uses your Coinbase balance as the debit card’s source of funds, allowing you to spend bitcoins at any merchant accepting Visa.
