Are you a gig worker or an Uber driver looking for the right platforms to jump on the cryptocurrency bandwagon? In that case, Coinbase is one of the simplest exchanges with a bright user interface and provides the latest updates on all the different cryptocurrencies.
However, is Coinbase safe and legit? Moreover, does its fee structure support gig workers who might not earn a lot?
If you have come across Coinbase many times but are not sure of its performance and legitimacy, we have got you covered. Read this article to explore all the nitty-gritties of Coinbase and find out if it’s perfect for you.
What Is Coinbase?
Founded in 2012, Coinbase is a product of Fred Ehrsam and Brian Armstrong. This exchange was launched three years after the birth of Bitcoin, and since then, Coinbase has captured around 56 million users.
Moreover, it also serves 8000 institutions and has around 134,000 partners from around the world.
This San-Francisco-based platform also became public recently and now has a value of worth $50 billion.
Interestingly, Covid-19 increased the demand for cryptocurrencies, thanks to quarantine and stimulus dollars. The worth of Bitcoin was only around $5000 before Covid-19 hit America. However, one year later, its value increased to $50,000.
This shift in value was seen as an opportunity for Instacart drivers, gig workers, and even people in business to earn some passive income. So, most of them chose Coinbase because it has a sleek design and easy-to-navigate tools that make buying and selling cryptocurrency quite comfortable.
However, one of the biggest downsides of Coinbase is its high fees, which we will discuss later in this article.
Currently, you can buy and sell some major cryptocurrencies from Coinbase, and a few of them are:
- Bitcoin Cash
- Internet Computer
How Does Coinbase Work?
Coinbase allows you to buy, sell and even spend your cryptocurrency. Moreover, it features many cryptocurrency wallets where you can store your currency safely.
What’s more, unlike some other exchanges, Coinbase is entirely a custodian and exchange. As a result, you won’t find options or stocks here.
However, Coinbase is filled with all kinds of educational resources that might help you become a good cryptocurrency trader in a short time.
Creating an Account on Coinbase
Creating an account on this platform is quite easy and quick.
- Fill in your name, password, and email address in the sign-up box given.
- Once done, simply click Create Account or Sign Up to proceed further.
- Coinbase will send you an email to verify your email address.
- You will then be asked to add your personal information and verify your identity.
- Finally, you will have to link to an appropriate payment method to seal the deal.
Once Coinbase approves your account, you can explore the platform and learn about different ways to buy and sell cryptocurrencies with ease.
Investing with Coinbase
There are many ways to invest with Coinbase. Read about them below.
Coinbase Brokerage Account
If this is your first time dealing with a cryptocurrency exchange and you also do not have enough funds to invest, you can opt for the standard trading account on Coinbase. Designed for individuals like you, this account requires a minimum fee of $2 to get started. In addition, it also allows you to trade as many as 80 cryptocurrencies.
Besides, suppose you are busy with your full-time job and do not have enough time to trade currency. In that case, this account offers you many other interesting products to experience and easily earn some currency.
For instance, the Coinbase Earn feature guides you about various cryptocurrency topics and further helps you earn beneficial cryptocurrency assets.
This feature asks you to watch different videos on cryptocurrencies and then requests you to take a quiz after completing a lesson. After ending the quiz, Coinbase transfers some crypto to your wallet.
Moreover, this feature is a great way to earn some passive income without getting into the complications of trading.
What’s more, Coinbase has a USD Coin. USD dollars entirely support this cryptocurrency.
Also referred to as stablecoins, a USD Coin is a redeemable currency and quite nonvolatile. Moreover, Coinbase allows customers with USD coins to benefit from many rewards.
Other than these features, Coinbase also offers many storage and custody options. You can download the Coinbase Wallet app and keep all your NFTs and crypto safely in one place.
In addition, this wallet allows you to protect every digital asset through top-notch security. One of the best features of this wallet is that it is entirely user-controlled. For example, you get a 12-word secret code that even Coinbase can’t access.
Coinbase Card is another exciting feature for individuals like you. This card is available in all states of America except Hawaii and allows you to spend your US dollars or cryptocurrency to earn some rewards in return.
As a struggling individual, you also might face emergencies where you may require cash to pay for car repairs or medical bills. In that case, you can use Bitcoin as your collateral and borrow an amount up to $1,000,000.
You simply have to pay 8% APR without any credit check to benefit from this feature.
Coinbase Pro Account
Designed for advanced traders, the Coinbase Pro Account offers many facilities such as charting tools, trading history, and order books. Additionally, the Webstock Feed makes it easy for you to access any market data, and the trading API provides an opportunity to develop trading bots.
This account also offers you FDIC insurance protection of a maximum amount of $250,000.The fee structure of this account comprises makers and takers fees.
So, for instance, if your account balance is below $10,000, a 0.50% taker fee might be compulsory to pay. But if your account has more than $500 million, your taker fee will only be 0.04%.
But why do you have to pay a taker fee in the first place? According to Coinbase, a taker fee is applied when your order placed at market price is immediately filled.
On the other hand, a maker fee is applied on orders that take time to match with any existing orders. According to Coinbase, this fee applies to cases where an investor’s order matches yours. A maker fee can be anywhere between 0% and 0.5%.
Not applicable in your case, but Coinbase also has many investment options available for institutions and businesses. Features such as Asset Hub, many storage options, and commerce platforms help new and old ventures to benefit from Coinbase.
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As mentioned earlier, Coinbase has a complex fee structure that might discourage new investors. But in this review, we will help you understand it to some extent.
Every sale and buy transitions have a two-part fee structure. This includes a transaction fee and a Coinbase’s spread. Coinbase spread refers to a markup of around 0.5% on the exchange price.
This information might look simple, but it gets complicated from here. The platform also charges a fee equal to the higher amount of transaction fee.
Below we have explained the flat fee structure that you can follow:
- For a transaction amount between $10 or less, the Coinbase fee is around $0.99.
- A transaction between $10 and $25 has a Coinbase fee of $1.49.
- Also, there is a Coinbase fee of $1.99 for transactions between $25 and $50.
- Finally, for transitions above $50, there is a Coinbase fee of $2.99.
Factors such as payment method and geographic location can have an impact on the variable fee. So, for instance, if you live in the USA, the Coinbase fee on the USA bank account is 1.49%.
Similarly, there is a 3.99% of Coinbase fee on Debit cards.
If you have purchased Bitcoins worth $500 and have used your bank account to transfer the funds, you will have to pay a flat fee of $2.99. In addition, there will also be a percentage-based fee of around $7.45.
Is Coinbase Safe?
While Coinbase is a great platform when it comes to exchanging cryptocurrency, is it reliable? Can you trust the process and ensure that your crypto assets are in the right hands?
If you didn’t know already, Better Business Bureau (BBB) has given Coinbase an F rating.
BBB considers many factors such as the history of customer complaints, type of business, government actions, and licensing.
While the rating for Coinbase is F, which is pretty low, the organization also mentions that these ratings don’t guarantee that a company is trustworthy.
According to BBB, Coinbase has a low rating because it hasn’t answered 1500 customer complaints yet. So, it is imperative that you do your analysis and homework before making an account.
That said, Coinbase is a legitimate platform. That’s because its location is highly-regulated, and it has many high-profile investors in its customer portfolio.
Moreover, according to past experiences, Coinbase is famous for blocking customers’ accounts that seem suspicious.
What’s more, Coinbase maintains an insurance policy on all the stored assets. In addition, there have never been any incidents of cryptocurrency thefts from this platform.
Take a look at the positives of Coinbase:
- Ease of Use: The signing process is quite easy and simple. Moreover, the interface is quite bright and convenient to navigate.
- Security: Coinbase is a secure and safe platform to buy and sell cryptocurrencies. Moreover, no one other than the user can access the wallet with a security code.
- Expansion: You can find close to 100 cryptocurrencies on this platform.
- Coinbase Earn: This feature allows you to earn while watching and learning through different educational videos on Coinbase.
- Insurance: In the event of theft or any mishandling, all the cryptocurrency on Coinbase is insured.
- Many Features: Coinbase comes with many different features to make trading convenient for all types of users. Features such as wallet and card help to trade cryptocurrency with convenience.
In addition, Coinbase also offers its users the facility to borrow cash through Bitcoin, which is quite a rare aspect in cryptocurrency exchanges.
Here are some downsides of Coinbase:
- Fees: The fee structure on Coinbase is quite complicated. Moreover, compared to other cryptocurrency exchanges, the fees at Coinbase are quite high.
- Complaints on Poor Responses: According to BBB, Coinbase has failed to reply and cater to issues faced by 1500 users.
Who Is Coinbase For?
Coinbase is a perfect cryptocurrency exchange for traders looking for an easy-to-navigate platform. In addition, it is also ideal for gig workers and Uber drivers who do not have time to understand the complexities of cryptocurrency and are looking for convenience.
What’s more, Coinbase is also a great learning platform for people who want to increase their knowledge of cryptocurrency. It helps businesses and institutional services to exchange one cryptocurrency for another.
Who Is Coinbase Not For?
Unfortunately, Coinbase is not for people under the age of 18. Moreover, since it isn’t available in Hawaii, Coinbase is not for people living in that area.
But most importantly, Coinbase is not for users who can’t deal with high transactional fees. The fee structure of this platform is quite complicated, and for anyone who can’t understand it, Coinbase might not serve you well.
The Bottom Line
It is safe to say that Coinbase is an easy getaway for individuals and businesses to trade cryptocurrencies. Thanks to its good reputation, easy-to-use features, and quick sign-up process, Coinbase has become quite popular in such a short time.
Moreover, unlike most other exchanges, Coinbase is an ideal platform for people who want to earn through educational videos and learn a thing or two about cryptocurrencies before getting started.
The only downside of this exchange is that its transactional fees are high and complicated. If you can’t deal with high expenses, you might find it hard to trade on Coinbase. But if you can, it is smart to move to Coinbase’s Pro version as soon as possible.
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