Coinbase Review: Is Coinbase a Safe Way to Buy Cryptocurrency?

As Ethereum and Bitcoin, continue to increase in popularity, many newcomers are looking for a safe method to buy these cryptocurrencies.  In this Coinbase Review, we’ll show you why we’ve chosen Coinbase as our highest rated cryptocurrency buying method.  We’ll also show you the steps required to use Coinbase to buy Ethereum and Bitcoin.

You can jump to any portion of this Coinbase review, by clicking the following links:

Coinbase Review: Key Information

Coinbase has served over 8 million customers, since launching in 2012, and currently operates in 32 different countries.  The company is based out of San Francisco, California and is a licensed and regulated financial service provider.

Unlike cryptocurrency exchanges, where users have to trade on the exchanges to obtain cryptocurrencies, Coinbase offers simple buying and selling options.  When you buy Ethereum or Bitcoin on Coinbase, you’re purchasing the cryptocurrency directly from the company.  Coinbase also allows users to purchase cryptocurrencies using credit and debit cards, unlike most of its competitors.  You can see the process of buying cryptocurrency on Coinbase, in this section of the review.

Key Information
Rating 4.8
Site Type Easy Buy and Sell Methods
Beginner Friendly?
Business Location San Francisco, California, USA
Company Launch 2012
Available Cryptocurrencies Ethereum, Bitcoin, Litecoin
Buy Methods Credit/Debit Card, Bank Transfer
Sell Methods PayPal, Bank Transfer
Trustworthiness Excellent
Security Excellent
Customer Support Good
Bonus $10 Worth of Free Bitcoin When

Buy $100 or More in Cryptocurrency

Site Visit Coinbase

Is Coinbase Safe?

For many of you reading this Coinbase review, this is probably the most important question you’re looking to answer.  The short answer is, Coinbase is one of the safest methods of buying cryptocurrencies.  For a more in depth look at this question, we’ve split the answer into three sections.

  • Licensed and Regulated Financial Service
  • Safe Keeping and Use of Funds
  • Account Security Measures

Licensed and Regulated Financial Service

Of the 32 countries currently served by Coinbase, only the United States requires licenses to operate a cryptocurrency business.  For every jurisdiction within the United States, where Coinbase operates, they comply with all laws and regulations.  This means they are compliant to regulations, on both the federal and state level.

Here are some examples of laws, regulations, and governing bodies that Coinbase complies with.

  • The Bank Secrecy Act
  • The USA Patriot Act
  • State specific money transmission laws and regulations.
  • FinCEN

Safe Keeping and Use of Funds

Coinbase has many measures in place for the safe guarding of customer funds.

All funds, whether digital or fiat currencies, are segregated from company operational funds.  This means the company will never use your funds themselves.

Less than 2% of customer’s digital currency is held online, with the remaining portion held in secure offline cold storage.  The offline portion of customers digital funds, are stored in safe deposit boxes and vaults around the world.  The small online portion is insured by Lloyd’s of London.

For United States residents, customer USD wallets, are also covered by FDIC insurance, up to $250,000.

Do note, these insurance measures do not cover breaches of personal accounts on the site.  For example, if your computer was hacked and your password was found and used to access your account, Coinbase would not be responsible.  It’s worth noting, we are not aware of any competitor site, where this would not be the case.  In the next section, you can see a variety of personal account security measures offered for your Coinbase account.

Account Security Measures

Coinbase offers a variety of security measures, to keep your personal account safe and secure.

First of all, we recommend you create a strong and unique password.  This is important for all online accounts, but it’s specifically important when there’s currency at stake.

The most basic additional personal account security feature, offered by Coinbase, is verification emails.  When signing into your account, you’ll likely be required to verify the login attempt, via email.

Additionally, a variety of 2-factor authentication methods are able to be used to secure your account.  You can set up 2-FA using SMS text messaging, Google Authenticator, and/or Authy.  This is important to provide an additional layer of security to your account and we strongly recommend taking advantage of this.

You can also track account activity when logged into your Coinbase account.  Here you’ll be able to see the IP addresses and devices used to access your account.

 

 

How to Use Coinbase to Buy Ethereum and Bitcoin

Coinbase has created an incredibly easy way to buy cryptocurrencies, for users wanting to use fiat currencies.  We’ll show you an example of the process below.  Keep in mind the process can vary slightly, depending on the user’s location and other factors.

In addition to the steps below, you may need to verify your identity.  This is necessary for Coinbase to comply with laws and regulations, in some of the countries they operate in.  You may need to complete this verification before you can purchase cryptocurrency.  Please note, all legitimate cryptocurrency buying sites and exchanges, that offer services involving USD, will require identity verification.

1) Create an Account

The first step is to create an account, giving Coinbase your basic information.

 

 

2) Verify Your Email Address

You will then be asked to verify your email address.  You’ll likely also be asked to verify new devices in the future, when using them to access your account.

 

 

3) Select Your State

If you’re located within the United States, you may then be prompted to confirm your state.  Coinbase needs to know your specific state, to comply with state regulations and laws.

 

 

4) Dashboard

You will then be taken to your account dashboard.  Here you will be prompted to complete your account.

 

 

5) Add Mobile Phone Number to Account

You will be asked to add your mobile phone number to your account, to use SMS text messages as a 2-Factor Authentication method.

 

 

6) Add Payment Method

You can link your bank account and credit/debit card, to use to purchase cryptocurrencies.

 

 

7) Buy Cryptocurrencies

When your account is set up, you can then buy Bitcoin, Ethereum, and/or Litecoin.  The price you’ll pay for your cryptocurrency is set by Coinbase.  This price is based off the current rate at the GDAX cryptocurrency exchange.  Coinbase then charges a small fee for their services (usually 1.49-3.99%).

Both the price and the fee is shown before you execute your purchase.  Here you can see, a $2.99 fee was charged for buying $200 worth of Ethereum.

 

 

You will be asked to confirm your purchase, with the details being shown again.

 

 

After you confirm your purchase, the date will be set for when you receive your cryptocurrency.  While your purchase is locked in at the set price shown, you will not receive your cryptocurrency immediately.  This time is needed to prevent any fraudulent purchases from being made.  During this time, you cannot transfer your cryptocurrency from your wallet.

 

 

Your purchase will then show in your pending transactions.  Once your purchase has gone through the pending process, it will be available in your wallet.

 

Additional Coinbase Information

Below you can find additional information on supported countries, payment methods, customer support, and fees.

Supported Countries

Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States

Deposit & Withdrawal Methods

Deposit and Withdrawal methods vary by country.  The majority of countries, including the United States, allow users to buy cryptocurrencies via Credit/Debit Card and Bank Transfer.  For withdrawals, United States residents can use Bank Transfers or PayPal.

Customer Support

Coinbase offers support primarily through email.  They also have an extensive help desk FAQ, where you can find answers to most common issues.

In our personal experience, it typically takes 24-72 hours to receive a response from their customer support.  While there is certainly room to improve in Coinbase’s customer service, they do a better job than most of their competitors.

With cryptocurrencies rising in popularity so rapidly, cryptocurrency companies have all seemed to struggle keeping up with customer support.  Some exchanges have had reports of customer support taking multiple weeks to respond, or in some cases, never responding at all.  With this in mind, it’s nice to know Coinbase will at least respond in a reasonable time frame, for customer support inquiries.

Fees

Fees can vary by country and order size.  Fees are shown before a buy or sell order is executed.  Typical fees are:

Buying Fees

  • Bank Account Purchases 1.49%
  • Credit/Debit Card 3.99%

Selling Fees

  • Bank Account Sell 1.49%
  • PayPal 3.99%

Credit card and Paypal fees are higher than bank transfer, due to the fees charged by those payment processors.  You can find more specific information about fees on their website.

Coinbase Review Summary

Coinbase is an excellent way for crypto newcomers to buy Bitcoin, Ethereum, and Litecoin.  They’ve, quite possibly, created the most beginner friendly way to do this, in the entire industry.

Their customer support could improve, although compared to the competition, they’re better than most.

Fees are slightly higher than exchanges, to account for the service they provide.

Coinbase Review
  • Beginner Friendliness
  • Community Sentiment
  • Customer Service
  • Transparency
  • Purchasing Limits
  • Payment Methods
4.8

Summary

Coinbase is generally a great safe and beginner friendly option for buying cryptocurrencies.

Additional Looks at Coinbase

 

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