Coinbase has become one of the largest exchanges in the world. Based in the US and operating since 2011, the exchange is often the first place many people go to buy their first ever Bitcoin.
Coinbase provides many benefits such as simplicity of use, but it has also received criticism from Bitcoiners as well as many of its customers. Let’s take a look at four things you should know about Coinbase.
Ease of use
One of the key benefits of using Coinbase is that it has a simple user interface that is ideal for people who have very little knowledge of the cryptocurrency scene. You can buy and store four of the major cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
The signup process follows traditional financial technologies and includes a fairly stringent know your customer (KYC) process. While many traditional Bitcoiners feel uncomfortable handing over their personal details, it is the price of having a regulated exchange.
Coinbase is based in the US and is fully regulated. This provides a sense of security for its users. The exchange also holds 2% of cryptocurrency storage online with the rest stored in offline wallets for additional safety. It is insured for any losses to the cryptocurrencies stored online.
Coinbase is available in 107 countries throughout the world. However, there are limitations depending on the regulations of the specific country.
Payment methods can also vary depending on your location. For those based in the UK, you can top up your Coinbase account with Sterling via debit or credit card, UK bank transfer, or SEPA. The ability to buy cryptocurrency with a variety of payment methods is one of the most attractive aspects of using Coinbase.
Many other exchanges, especially those that provide the possibility of converting Bitcoin into altcoins, do not provide such a service. Therefore, if a user would like to trade in altcoins, they often buy Bitcoin from Coinbase first and transfer it over to the necessary exchange.
One of the major issues that customers have complained about when using Coinbase is its customer support. On the review site Trustpilot, Coinbase has a 1-star rating. There is a general trend from the reviews left on the site. The first major issue is that the customer support is slow to respond to queries. This is especially problematic when Coinbase can be holding large amounts of a customer’s cryptocurrency, causing distress to the customer.
Another issue highlighted by customers of Coinbase is the scripted nature of its customer support. Users have accused Coinbase of making its customer support robotic, making people think the exchange doesn’t care about their issues.
The third issue that often appears on reviews for Coinbase is criticism of its referral program. By introducing friends to the service, you can be rewarded with better fees or coins. Yet many people have claimed on Trustpilot that they didn’t receive their rewards for doing so.
It should be noted though that as with all reviews, the trend shows that unhappy customers are always more likely to leave a review than happy customers.
Another one of the major criticisms of Coinbase is that it charges high fees for its service. There are numerous exchanges that provide a similar service to Coinbase but with cheaper fees. However, thanks to its reputation as one of the largest and easiest exchanges to use, it appears that customers are non-plussed regarding the expensive fees on Coinbase.
Despite the high fees, the fact that Coinbase is insured for online losses and has never been hacked (as of the time of writing) means that the high fees might be worth it for many. To be as secure as possible though, you should always keep your Bitcoin in a hardware wallet rather than trusting a third party online.
Despite some criticism, Coinbase still remains the main site for new investors to buy Bitcoin. Thanks to its first-mover advantage in the market, the variety of payments possible, and its ease of use, the exchange has marketed itself as the go-to exchange in the space. However, there certainly seems to be room for improvement on the customer support side of the operation judging by the reviews on Trustpilot.
But for many who have experience in cryptocurrencies, they will have likely moved on to other exchanges that provide more altcoins and offer much lower fees.