Coinbase Review: Fees, Security, Controversy

Coinbase is a major Bitcoin exchange that has been around since 2012, and by October 2018 it has 25 million users. You can track their impressive progress in this table created by @alistarmilne.

Is Coinbase the best option to buy & trade Bitcoin online though? Let’s review Coinbase experience in detail.

Use these quick links for different Coinbase review sections or scroll down to read it all.

• Is Coinbase legit?
• Cryptocurrencies supported by Coinbase
• Buying Crypto on Coinbase
• Coinbase limits
• Coinbase fees
• Coinbase reviews
• Coinbase problems
• Is Coinbase insured?
• Is Coinbase safe?
• Coinbase wallets alert
• Verdict
• Coinbase alternatives (popular)

Is Coinbase legit?

First things first, yes, it’s definitely a legitimate business and the largest cryptocurrency exchange for buying Bitcoin – and a couple of other coins.

Coinbase has been the entry point to crypto for millions of people during the 2017 bull run and has regained its’s positions throughout 2018.

Coinbase review criticism is not coming from the exchange being a scam, but from other problems, like withdrawal delays. Jump to problems or read on.

Cryptocurrencies supported by Coinbase

Coinbase supports several major cryptocurrencies: Bitcoin, Litecoin, Ethereum, Ethereum Classic, Bitcoin Cash, 0x.

Coinbase has also introduced “bundles” recently – it’s a set of all cryptocurrencies they support purchased at once and represented according to their market share. As of October 2018 a bundle is: Bitcoin 75.66%, Ethereum 15.36%, Bitcoin Cash 5.95%, Litecoin 2.27%, Ethereum Classic 0.76%.

A cryptocurrency bundle is supposedly an easy way for a newcomer to get taste of cryptocurrencies but it’s also been called useless a lot. The problem with the Bundles is that it is not reflecting the nature of cryptocurrencies. It’s not like a diversified stock market index fund, because if Bitcoin goes down – all crypto goes down.

Therefore a Bundle is a way to push coins that would otherwise NEVER be bought by most Coinbase users (e.g. Bitcoin Cash or Ethereum Classic).

A way better option is to just buy Bitcoin and then use an exchange service like Coinswitch to exchange your BTC into whatever else you would like to have. Moreover, services like Coinswitch will give you access to hundreds of altcoins, not just Ethereum Classic, Bitcoin Cash, and Litecoin – the Coinbase inventory – which are hardly useful for anything. Jump to other Coinbase alternatives.

Buying Crypto on Coinbase

To purchase any of these you would have to add a payment method, selecting from a bank account or credit card:

Coinbase accepts deposits from any bank that can make and accept SEPA payments, it won’t work with Nationwide UK accounts though. If you are wondering whether Coinbase is safe to link your bank account to – yes it is, there is practically no way they can maliciously or negligently harm the account in your bank. Any money you do not deposit yourself is absolutely safe.

US customers used to have an option to purchase Bitcoin with PayPal using Coinbase but that has been discuntinued. Check this guide on the topic – Bitcoin to Paypal and back.

You can also set recurring transactions to buy crypto monthly, settle future payments and pay bills.

The bank account and the credit card have different deposit and withdrawal limits.

Coinbase bank account and credit card deposit and withdrawal limits

According to a Knowledgebase article account limits could go up to $25000 daily crypto purchases. Withdrawal limits could also be the same for the highest level accounts – but it’s hard to know for sure since this information is not listed publicly.

Coinbase fees

Coinbase fees are split into several tiers, they are explained in their knowledgebase, but here’s the essence:

a) Coinbase fees are highest for “instant” purchases of Bitcoin with a credit card – that is 3.99% for Australia, Canada, Singapore, UK, Europe and USA.

b) Bank transfers are the cheapest, from free/€0.15 for SEPA bank transfers to $10 for US wire transfer account (ACH is free)

c) There are two “methods” Coinbase determines their fees, and, in addition to everything specified above they can use “Method 2” meaning the fees are variable and can be more than 2.49% of the transaction. These variable fees are displayed right before you transact, so it’s pretty much impossible to plan your spending on Coinbase fees in advance. Coinbase fees reviewed.

Coinbase reviews on Reddit, Trustpilot and other sites

While selecting a place to buy your Bitcoin make sure you visit social media sites and check for Coinbase reviews there.

Coinbase reviews on Reddit and other user-generated content social media sites are pretty bad.

Most negative Coinbase reviews mention withdrawal problems.

Here’s a TrustPilot score:

Here’s a couple of TrustPilot Coinbase reviews giving you the idea of what the user experience may be like:

I’ve been trying to get my money back out of coinbase for about 3 months. They’ve made it so difficult and complicated to get it back out but yet so simple and easy to put in. this is a massive company dealing with complicated algorythms , i’m sure they could make it easier if they wanted… i’ve tried linking my current account (lloyds) so i can take it out in euros, this was blocked by my bank, same with Transferwise. I’ve also tried paypal (didn’t work) its really ridiculous.

20 day hold period on my bank transfer without any warning. Ridiculous amount of time to wait and poor service with generic responses. I would not purchase from them again.

Here’s a quick collection of Reddit posts on Coinbase warning the website could be a “scam”:

Here’s another extensive Coinbase review that walks through all the details: https://www.smartbitcoininvestments.com/coinbase-review/

Coinbase Controversy & Problems

Well, the whole Coinbase operation is far from being a scam, but it’s still holding a so-so reputation in the Bitcoin community, and here’s a quick list:

• Close ties to the banking industry (investments from USAA, Adreesseen Horowitz, Bank of Tokyo et al)
• Questionable political stances on Bitcoin forks (calls for more centralization and corporate fork segwit2xsupport)
• Pending patents on generic phrases like “instant exchange”, “bictoin exchange”, “tip button” and more.
• Overly zealous account policying. Accounts can be flagged and closed at the first suspicion of any questionable activity (which could mean anything), – that’s the price of being regulated in the US as it seems.
• DELAYS. Delays in KYC validation, in bank transfer validation, withdrawal delays and what not. Coinbase delays are so famous that a Reddit post went viral with a redditor being thankful to Coinbase for being so slow that it prevented him from buying Bitcoin at an all-time high price.

Is Coinbase insured?

Coinbase is insured by FDIC – each US customer’ wallet is insured for $250000. Non-US customers supposedly have their funds insured as well, though there are doubts from independent investigators:

Coinbase insurance Details from CoinBase

Is Coinbase safe and secure?

Coinbase could be anti-privacy, not customer-friendly and too concentrated on being a “conventional” financial institution, but if it’s one thing – it’s safe in terms o. It’s a US regulated institution that will hardly risk its’ reputation and litigation to screw customers of their money directly.

In fact, Coinbase is mostly the “mainstream adoption” gateway into Bitcoin for people who are not yet used to the idea that the financial system is changing with cryptocurrencies. If you are comfortable with banks and the way they run business, buying Bitcoin on Coinbase is not the worst option, the exchange is reliable. It’s not the “cryotocurrency experience” though, but that’s another story already.

Important security alert regarding Coinbase wallets

Coinbase verdict

Coinbase is a legitimate and regulated business, the largest Bitcoin exchange out there.

This is both a blessing and a curse for the user, and because of this reliability you will lose privacy and easily have your funds locked, dealing with generic customer support.

Use Coinbase if none of the alternatives below work for you.

Coinbase alternatives

To select a good Coinbase alternative you will be comfortable using you need to answer what your primary objective is. Here is a list of some common requirements and services that fit them:

1) For local, peer to peer Bitcoin purchases, anonymous for small amounts –

LocalBitcoins

2) For completely anonymous Bitcoin purchases use the decentralized exchange

HodlHodl

3) For quick credit/debit card purchases in UK and EU –

Wirex (read full review)

4) For quick purchases with a credit/debit card worldwide –

Indacoin or Cex.io

5) For reliable and regulated Bitcoin purchases with your bank account in the 49 U.S. states, Washington D.C., Puerto Rico, Canada, Hong Kong, Singapore, South Korea and the U.K. – use

Gemini