About Coinbase Exchange: Brief History
Established in June 2012 in San Francisco, California, United States, Coinbase is one of the elephants in the crypto market and is currently the largest crypto exchange in the United States by the trading volume (second largest in the world after Binance which is the world’s largest crypto exchange).
It has 43 million verified users, over 1200+ employees, and operates in more than 100 countries (to check the list of countries supported by Coinbase). The total traded volume on the exchange is USD 455 Billion with USD 90 billion worth of assets currently kept on the platform.
The founding team enrolled for the “Y Combinator Startup Incubator Program” in summer 2012 and raised USD 150,000 for the establishment of Coinbase. In October 2012, the company launched the services to buy and sell bitcoins through bank transfers. In May 2013, the company received a USD 5 million investment led by Fred Wilson from the venture capital firm Union Square Ventures. In December the same year, the company received a US$25 million investment, from the venture capital firms Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital. In these past years, Coinbase has raised a total of USD 547.3 Million in funding over 13 rounds with the latest funding being raised on Dec 21, 2018, from a Secondary Market round.
Recently Coinbase Global, Inc. has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed public direct listing of its Class A common stock. The Coinbase share is listed on the Nasdaq Global Select Market under the ticker symbol COIN.
Before understanding the various features that Coinbase offers, we need to understand the diverse experience of the founding team that brought Coinbase together.
Coinbase Team and Foundation
Brian Armstrong – Twitter
Co-founder & CEO
Brian was born and brought up near San Jose, California to engineer parents. He attended Rice University in Texas and earned a dual Bachelor’s degree in economics and computer science in 2005, followed by a Masters in Computer Science in 2006. Armstrong has a long list of employers, he has worked as a developer in IBM, consultant at Deloitte, and joined Airbnb in 2011 as a software Engineer.
While at Airbnb, he understood the difficulties of sending money to South America. Fortunately, in 2010, he came across the bitcoin white paper published by Satoshi Nakamoto. In 2012, he entered the “Y Combinator Startup Incubator Program” and received a $150,000 investment, which he used to found Coinbase.
Fred Ehrsam – Twitter
Co-Founder and Director
After graduating from Duke University in computer science and economics, Ehrsam started his professional career as a trader for Goldman Sachs. 2 years later, he co-founded Coinbase with Brian Armstrong. After working in the core team for 5 years, Ehrsam left Coinbase in 2017 to pursue other crypto-related ventures while continuing to hold a position as a director. In 2018, he co-founded Paradigm with Matt Huang, formerly from Sequoia Capital, and Charles Noyes, from Pantera Capital.
Features of Coinbase Exchange
Now let us discuss and understand the various features that are offered to an individual Coinbase user.
Types of Trades
Coinbase offers spot buying, selling, and conversion of over 45 cryptocurrencies on its platform. However, it does not offer futures and margin trading. The simplicity of buying Bitcoin on Coinbase is what made is the top crypto broker of America.
Coinbase funding methods:
Funding of an account is an important factor before selecting an ideal exchange for our day-to-day usage. Coinbase offers various funding methods, and pick the option based on your jurisdiction and urgency.
Here is the chart that shows various funding methods available for US customers:
Here is the chart that shows various funding methods for European customers:
- You can buy Bitcoin and various cryptocurrencies instantly using Debit card.
- PayPal can be used to withdraw your funds
Recurring Buy – Dollar cost averaging
This is one unique feature of Coinbase that is loved by the majority of its users. With the recurring buy or sell, you can do dollar-cost averaging to accumulate a coin (ex Bitcoin) or sell a coin as part of a paycheck. This process of DCA (Dollar cost averaging) removes the emotion out of the context and helps you to be more disciplined with your investment.
Staking – earn income on Coin holding
Coinbase also offers the staking feature on some crypto tokens. However, this feature is limited to the following locations:
- The UK
- The US (excluding New York (for Tezos and Cosmos) and Hawaii residents)
Currently, staking is available only on 3 tokens (Algorand (ALGO), Cosmos (ATOM), and Tezos (XTZ)). For more information on Coinbase staking, click here.
Earn while you Learn: Earn up to $37 worth of crypto
Coinbase has an “Earn while you Learn” model which gives you rewards for watching crypto videos and other resources on the website. This is an amazing concept as you make money while learning so much about the crypto space.
For more information on rewards offered by Coinbase, click here.
In addition to the Coinbase exchange platform, Coinbase offers a wallet to its users to keep their cryptocurrencies safer.
The Coinbase Wallet app is a separate, standalone app that allows users to store, or custody, their own crypto, and explore the world of Decentralised Apps (DApps) with a DApp browser. You can store all your digital assets in one place including the NFTs and explore the open financial system. You do not need a Coinbase account to use the Coinbase Wallet app.
Coinbase Wallet helps you to manage your own private keys and store your crypto assets directly on your device, not with a centralized brokerage or exchange. Moreover, you can download and use Coinbase Wallet anywhere in the world.
Coinbase also offers a Visa debit card, which is funded by your Coinbase balance. This is the easiest way to spend your crypto worldwide. You can choose the crypto (through the online app) which you want to use through the card. Thus, it helps you to use cryptocurrencies as money.
For more information on Coinbase Card
User Interface and Mobile Application
The USP of the exchange is the most simplistic user interface it offers you. It does not matter whether you are a beginner or an advanced trader, the trading experience is quick and delightful. The exchange also has a mobile application for android and iOS devices to keep the user updated on the go. The app is fully functional and if you enjoy trading on mobile, the app will keep you engaged. There are more than 10 Million downloads on the app store with an average rating of 4.4.
Coinbase is one of the safest and secure crypto exchanges in the world. Following are the security features that provide it more credibility:
- Coinbase website traffic runs entirely over encrypted SSL (HTTPS),
- 98% of customer funds are stored offline,
- Sensitive data that would normally reside on the servers is disconnected entirely from the internet,
- Drives and paper backups are distributed in safe deposit boxes and vaults geographically around the world,
- 2 Factor Authentication is mandatory for all accounts,
- Online funds are covered by insurance,
- Wallets (and private keys) are stored using AES-256 encryption which is one of the best in the world.
Thus, you can rest assured that the exchange is sufficiently safe and secure.
Fees associated with Coinbase
Coinbase fee structure is variable and is substantially higher than most of the leading crypto exchanges in the world.
- There is no fee for the Coinbase wallet service. However, the transaction fee is charged if any cryptocurrency is transferred to a non-coinbase wallet.
- On a spot transaction, Coinbase keeps a spread as well as charges a transaction fee (in addition to the spread). Fees may vary based on your location, payment method, and other circumstances.
For more information on the fee, click here.
Social Media Presence
Being one of the top crypto exchanges, Coinbase has a huge social media presence. Further, the Coinbase team is regularly featured by major traditional as well as crypto media houses.
- Twitter – 1.7 million followers
- Linkedin – 173,674 followers
- Facebook – 311,027 followers
So, as we have understood the various features that Coinbase exchange offers, now let me summarise the pros and cons that you will have to consider while using its services.
Benefits of Coinbase Exchange
The various benefits of using Coinbase exchange are as follows:
- Coinbase provides the simplest user interface amongst the various crypto exchanges in the world
- With a high trading volume (being no. 2 in the world), Coinbase offers high liquidity to its users
- It has a unique “Earn while you Learn model”
- Coinbase wallet provides a secure way to keep your private keys safe
- US residents (who are restricted by most of the crypto exchanges) can transact in cryptocurrencies through Coinbase
However, according to my understanding, Coinbase also has some limitations.
Limitations of Coinbase Exchange
The limitations of the exchange are:
- Coinbase charges substantially higher than leading crypto exchanges. However, the fee is lower on Coinbase Pro
- The variety of altcoins offered by Coinbase is limited and therefore, the exchange may not be a favourable option for an altcoin trader