Coinbase is one of the foremost cryptocurrency exchanges and the largest Bitcoin broker, also called as digital currency exchange that enables users to convert or trade cryptocurrencies to fiat currencies. Based out of San Francisco in California, Coinbase is currently operating in 55 countries of the world. It was found in 2012 by Brian Armstrong and Fred Ehrsam. In October2012, Coinbase engaged in buying and selling Bitcoin using bank transfers. In a span of only two years, the platform had about 1 million users. In 2014, Coinbase got insurance secured for the Bitcoins stored on its platform and also started the vault system for storage of Bitcon securely. In the same year the company introduced the Bitcoin payment processing to payment platforms like PayPal and Stripe. In 2016 the name of the Coinbase exchange was changed to Global Digital Asset Exchange. As on date, the platform has been involved in exchange of more than $150 billion cryptocurrencies.
Faced Common Issue Coinbase Wallet
The fact that Coinbase is backed by some trusted names from the financial and the investment industry and that the currency held in the wallets are insured by the Federal Deposit Insurance Corporation (FDIC) lends it credibility. However, there are some common issued faced by the Coinbase wallet:-
- Users who have the Coinbase Bitcoin wallet, the entire control of the Bitcoins in the wallet is with Coinbase. Users in this case need to trust the company for maintaining safety and security of the coins. However, since the concept of cryptocurrency is for users to have greater control on their own funds and money, the point is defeated with Coinbase controlling the wallet. Hence users are advised to transfer the Bitcoins to a safe wallet on which they have control.
- Simultaneously users also need to safe-guard their login details including their password because in case of a mismatch Coinbase has the right to block users from accessing their funds and also shut down their account.
- In February 2018, cases of customers being overcharged for cryptocurrency purchases made by their debit and credit cards were reported. This was because banks and card issuing service providers were processing such transactions as cash advances and hence charging an additional cash-advance fee against such purchases. While initially the card issuers blamed Coinbase for this; however, most of them retracted saying that Coinbase was not to be blamed for the overcharge.
- In March 2018, the company also saw as many as 400 customers complaining to Coinbase about not getting money when promised.
- The Customer support is not very impressive with many customers complaining that the support team does not do much initially and commonly send canned responses that are no solution to issues.raised by them. Though they have a phone line for customer support, the team is usually unable to resolve issues properly.
Pros and Cons of Coinbase Wallet
Advantages of the Coinbase wallet
- It is a software wallet that also comes with a vault for storing Bitcoins.
- Other than storing, users can use the Coinbase wallet to buy and sell Bitcoins.
- Users can also request for money in Bitcoins or dollars.
- Adding money to the Coinbase wallet is simple and convenient. Infact the Bitcoins can go to the vault direct after the user is asked for the password.
- The funds in the wallet are stored offline and there are backups, drives, keys and passwords for security of the funds. All the information stored is protected through biometric authentication, multi-signature and 2-factor authentication.
- Coinbase also offers the provision of creating a group vault which a maximum of five users can use.
- Users can use the wallet for online shopping at e-stores that accept payments in cryptocurrency.
- Users of Coinbase wallet can easily transfer money to any place on the globe.
- The Coinbase wallet supports multiple crypto coins like BTC, BCH, LTC, ETH etc.
Disadvantages of the Coinbase Wallet
- The vault feature of the Coinbase wallet is perceived suspiciously by customers and experts as the company has complete control over the funds of the users. It is almost like how banks have complete authority over the money kept in the user accounts. Plus the fact that Coinbase can freeze or shut down accounts at its free will and stop customers from accessing their funds are also viewed with skepticism.
- The other common drawback of the Coinbase wallet is the bugs or issues that keep creeping up from time and time and the time that the company takes to fix these bugs.
- Since it is a hot wallet, if the Coinbase system is hacked, there are high chances that the users lose their funds.
Payment withdraw method of Coinbase wallet
For US customers
- Your Coinbase wallet can be linked to your Bank Account, Debit card or Wire Transfer for transaction purpose but only the bank account and wire transfer can be used for withdrawal.
- You would need to visit https://www.coinbase.com/settings/linked-accounts/ to Link an account. Follow the instructions mentioned to provide personal information and then complete the verification to link a new account.
- Bank accounts can be linked using online banking username and password or by using Coinbase’s Deposit verification process that needs to be done manually and usually done for banks that are not listed on Coinbase. Once the deposit reaches your Coinbase account you can verify the same and start to buy. The linked bank account can now be used for receiving payments from Sell of coins or withdrawals from the USD wallet.
- In case of wire withdrawals, an amount of$25,000 or more can only be done. As soon your USD wallet is activated and your withdrawal details verified you can initiate withdrawal from Coinbase USD wallet.
For European customers
- In this case Single Euro Payment Area (SEPA) transfer method can be used for withdrawal from your Coinbase wallet.
- Bank transfers are done in denominations of Euro and have no associated fees and are done via a SEPA transfer. For the withdrawal to happen properly users need to ensure that their bank supports SEPA transfers, have Coinbase account updated with a Photo ID and contact number and that the name of the bank is the same as that mentioned on the Coinbase account.
- You will first be required to deposit a certain amount of Euros in the Coinbase EURO wallet to link your bank account through SEPA Transfers.
- Only when the deposit is verified and confirmed can you withdraw Euros from the Coinbase wallet by selecting Accounts> EUR wallet> Withdraw. If required provide your bank account details and the withdrawal will be initiated which generally takes about 1-3 days.
For UK customers
- In order to withdraw GBP to your bank account in the UK, you need to make an initial deposit into the Coinbase account.