Paxful vs Coinbase – A Comparative Review
Paxful and Coinbase represent two very different ways of buying Bitcoin. One could say that these two are polarly different.
To set the terminology straight, Paxful is a peer-to-peer marketplace, while Coinbase is a broker that is allowed to send you Bitcoin. This is pretty much where all the differences come from. What Paxful does is match buyers and sellers that agree upon the price and payment method, where both parties need to perform their due diligence. Coinbase is a thoroughly regulated financial institution that sells you Bitcoin directly.
Considering the above, speed varies also. At Paxful the transaction is ready as soon as both parties have exchanged payment and Bitcoin. At Coinbase you need to pass thorough identity verification first, then deposit fiat money to your account, and only then place Bitcoin orders. As a result, even though both platforms allow credit card purchases, Paxful offers you to buy Bitcoin with a credit or a debit card instantly, while coinbase does not.
Paxful charges Bitcoin sellers a flat 1% fee, but lets them set any price they wish. As a result, the buyers pay no fees at Paxful, but they have to agree with the prices the sellers have set across the marketplace. With reversible or suspicious payment methods (e.g. PayPal or a credit card) the fees will get higher because sellers account for the risk. Coinbase, on the other hand, has a fee structure that goes up to 4% for your operations, and even though it’s written out in their knowledgebase, they reserve the right to alter the fees right before the transaction is complete (see more on that in the Coinbase review).
If anonymity is important for you then Paxful surely wins. At Paxful, you can opt for a payment method that will not reveal your identity (cash, gift cards, etc.). At Coinbase, even viewing your account limits and pricing requires submission of personal data and ID.
Reliability is another issue that’s important for Bitcoin buyers and sellers. Paxful is only as reliable as every individual seller you are dealing with, so – perform due diligence, work with trusted reputable members, follow safety tips (listed in our Paxful review). Coinbase makes a lot of effort to weed out ANY suspicious behavior to comply with KYC and AML regulation, which means your account could be banned only if you log in from a VPN. The safety is not so much higher in case with Coinbase, as it is not your own headache anymore. Some people prefer to risk their own privacy and activity just to have general safety guarantees – and that’s the audience Coinbase is expecting.
We could sum up the Paxful versus Coinbase debate in this clear table so that you could make up your mind and decide which option suits you better.
|regulation||marketplace matching buyers and sellers||bitcoin broker|
|speed||nearly instant||can be delayed for weeks|
|safety||own due diligence required||high (excessive)|
|reliability||as reliable as each seller||reliable but unpredictable (safety>customers)|
|moderation||will react to to complaints||will ban preemptively|
|wallet offers private key?||no||no|
Paxful = anonymous if you need that, requires no user verification, can be expensive, fast, requires safety measures.
Coinbase = never anonymous, overly cautious, has medium prices but can be expensive, may block suspicious accounts, takes longer.