Coinbase Review 2023 (2024)

To have enough money for your transaction, it’s essential to estimate all the fees you will pay on a particular transaction beforehand.

In summary, your total fees depend on:

• Your payment method
• The particular blockchain you're transacting on
• Trading fees and spreads

Security

Coinbase uses various methods to keep your account safe. One of these helpful security features is a compulsory 2-factor authentication (2FA) system. Notwithstanding, you still need to do your due diligence and take steps to guard against any unauthorized access that could compromise your account.

The exchange employs two critical security measures to secure customer assets: cold storage and multiparty computation (MPC). While most customer assets are stored in secure, offline locations, the remaining assets online are protected from attackers with MPC.

With MPC, cryptographic keys are generated for any on-chain transaction. Keys are generated in different parts, making it almost impossible for any attacker to steal your crypto by combining all required keys.

Despite Coinbase’s “bank-grade” security, users have lost their assets using the exchange. In March 2023, a Coinbase user sued the exchange after losing 90% of his life savings, about $96,000, to a hacker after his phone was hacked and his account accessed. Another user lost $2 million worth of cryptocurrency after his account was compromised and he could not get any meaningful help from customer support when the incident occurred.

Opening a Coinbase Account

Opening a Coinbase account is an easy process, similar to opening a new bank account. You’ll need to submit personal details such as your name, email address, and proof of residence, among other things, to confirm you're human and to meet know your customer (KYC) regulations.

Additionally, you have to submit a picture of your government-issued ID. While some cryptocurrency exchanges allow you to be anonymous, Coinbase is not one of these exchanges. You have to be verified and link your bank details to match your present identity before you start transacting.

These are security measures put in place to protect Coinbase users.

Customer Service

Many Coinbase customers have issues with the exchange’s customer service, with non-human communication and slow response times as some of the most recurring themes. The customer service options are a live chat function, a social media help platform, and a ticketing system, which are all more self-service than interactive.

Customer Satisfaction

Coinbase has scored good points on user experience and ease of -use, but security and customer satisfaction need improvement. Generally, users with account issues like hacks and locked accounts find it challenging to resolve them.

On Trustpilot, Coinbase has poor customer reviews, scoring 1.4 out of 5 stars from 8,500+ reviews, signaling a major problem with users accessing and operating their accounts.

Rating sites aside, Coinbase also has a bad reputation with consumer regulatory bodies. Thousands of grievances were brought to the Consumer Financial Protection Bureau by Coinbase users. Also, the Commodity Futures Trading Commission fined Coinbase more than $6 million in civil penalties.

How Coinbase Compares to Other Cryptocurrency Companies

With more than 500 crypto exchanges, users have many alternatives to Coinbase. Users who prefer to stay anonymous can go for decentralized exchanges. Those who are okay with being known can go for other centralized exchanges like Binance, Kraken, or Gemini if they feel Coinbase isn't a good fit.

You don't need to stick to one exchange. You can use Coinbase in combination with other exchanges for an enhanced experience. For example, another centralized exchange might be good for frequent purchases, while Coinbase securely stores your crypto.

Gemini is one exchange that closely mirrors Coinbase in functionality. Here's how it compares to Coinbase:

• Gemini has a better fee schedule and is more cost-effective than Coinbase.
• Both exchanges are compliant in the U.S.
• Gemini, in addition to its regular exchange, also has a pro trading platform called ActiveTrader that offers similar functionality to Coinbase’s Active Trade.
• Both Coinbase and Gemini offer users an opportunity to earn interest on their crypto. Coinbase offers more interest, however —10% APY—compared to Gemini's 5.40%.

If you would like to switch to Gemini instead or run it simultaneously with Coinbase, check out our Gemini Review first so you’ll learn how to optimize your use of the exchange.

Final Verdict

Coinbase is a popular cryptocurrency exchange where anyone can buy, sell, or store cryptocurrencies. It saves users from navigating through the technicality typical of many other exchanges and cuts down on the steps needed to invest in cryptocurrency. The exchange supports over 10,000 assets, allowing users to explore and enjoy a buffet of digital currencies.

Remember to safeguard your devices while using any crypto exchange, including Coinbase. If you look past its poor customer service and pricey fee schedule, Coinbase is a powerful tool that can help ease your journey into crypto investing.

Frequently Asked Questions

What Is Coinbase?

Coinbase is a cryptocurrency brokerage that simplifies the process of trading and storing cryptocurrencies, ideal for beginners with little crypto knowledge and advanced users needing something less complicated. With this exchange, users can trade crypto 24/7 and deposit and withdraw fiat through a variety of methods such as SWIFT and ACH transfers.

Is Coinbase Safe?

Coinbase has several security measures in place to protect customer funds, which makes it a relatively safe place to store your crypto assets. However, it is not entirely safe, and you still need to do your part to protect your assets. You can use Coinbase to trade crypto, but ensure you keep all login information private and never share your verification codes with anyone.

Is Coinbase Good for Beginners?

Yes. Coinbase is a good choice for beginners as it requires little technical knowledge. Anyone operating an internet-enabled device can easily navigate Coinbase’s interface and trade crypto.

Should I Give My SSN to Coinbase?

Giving your Social Security number (SSN) to Coinbase is generally safe. It is one of the most well-known cryptocurrency trading platforms, using leading security practices to protect users' accounts. However, it's not entirely without risk of hacking, and only you can decide if you wish to proceed.

Is Coinbase FDIC Insured?

No, Coinbase is not FDIC insured. Instead, the company offers crime insurance, which covers some of the digital currencies within its system, offering protection against theft and cybersecurity breaches. Note that the insurance does not cover unauthorized access to user accounts, such as if someone obtains your login credentials.

Does Coinbase Report to the IRS?

Coinbase does report to the IRS. The exchange only reports Form 1099-MISC. Multiple types of taxable income can be generated from activities on Coinbase, including capital gains from buying and selling crypto and interest income from things such as staking. U.S. customers should visit Coinbase Taxes to get everything they need to report taxable income from Coinbase.

Methodology

Investopedia is dedicated to helping those interested in cryptocurrency investing make informed and safe decisions. We are committed to providing our readers with unbiased reviews of the top cryptocurrency exchanges for investors of all levels.

Exchanges were reviewed on points including security, fees, number of cryptocurrencies available, and more. We also considered if the exchange is regulated by a proper agency or entirely decentralized. Our full cryptocurrency exchange methodology, including the review process and weighted data points, is available for review.