Defining Coinbase’s Crypto Platform and How to Use It Properly

Coinbase is considered the most accessible crypto trading platform in the world. It has become the go-to place not only to purchase Bitcoin (BTC) which is considered the gold standard of digital currencies, but you can purchase even the smallest (and riskiest) of meme coins. But you do so at your own risk.

With this said, a person who’s been considering getting into the crypto market might be salivating to start his or her own Coinbase account. But keep in mind, Coinbase has not been without its legal problems in the recent past.

In 2019 Silver Miller, a Florida cryptocurrency lawyer, engaged in a Coinbase class action lawsuit on behalf of a group of crypto victims. The lawsuit alleged that the popular crypto platform knowingly served as a channel for laundering millions of dollars that were said to be stolen from a Florida-based crypto exchange called Cryptsy. Despite numerous appeals, Coinbase lost the class action suit and was forced to pay up to $1,000,000 in compensation for the defrauded victims.    

These days, Coinbase seems to have gotten its act together, and because of it, has grown massively, its stock serving as a BTC proxy. According to a recent report from CoinMarketCap, as of 2023, Coinbase is presently the biggest cryptocurrency exchange operating in the U.S. It is considered a mainstream platform that’s popular with new investors along with traders and long-term “hodlers.” It first opened its digital doors in 2012.  

Boasting close to 70 million identity-verified customers, Coinbase is also one of the largest global exchanges, operating in over 100 countries. Said to be a beginner-friendly crypto platform, it is both easy and intuitive to utilize. Coinbase Pro, on the other hand, is more complex since, like its name suggests, it’s engineered for professional traders. However, both offer considerable educational resources which are meant to target existing and prospective customers.

In terms of security, Coinbase offers strong security including two-factor authorization or 2FA, along with biometric verification and institutional-grade cold storage. This means close to 1000 percent of a customer’s crypto can be stored securely off-line. The platform also deals with insurance programs in case a customer or customers fall victim to hacking.   

What Coinbase Offers

Coinbase’s basic version offers customers the ability to sell, buy, and trade cryptocurrencies plus stablecoins. Customers can send payments in crypto like BTC, to other crypto addresses and to a variety of wallets. The more advanced Coinbase Pro offers market size and spread numbers, candle charts, and a lot more for the professional trader.  

The Coinbase Wallet is said to store over 500 tokens, plus digital NFTs or nonfungible tokens, like CryptoKitties. The Coinbase Visa card gives its users the chance to spend crypto anywhere it is accepted as a form of payment. The card offers upwards of four percent crypto-back rewards.

How Coinbase Works

For access to a new Coinbase base account, a customer needs to sign up, show proof of identity, then fund the account with only $10 to begin trading crypto. In general, when a new crypto is introduced on the Coinbase platform, the coin receives a temporary boost in price. Those in the know can buy low and sell high.

However, Coinbase has been known to crash during times when Bitcoin undergoes a surge in price. This is due to a frenzy in trading volume which seriously increases transactions all across the crypto sphere.  

Fees Associated with Coinbase

Says CoinMarketCap, the fees associated with doing business on Coinbase are considered higher than average for the industry. That is, 1.42 percent per retail trade per retain customer, compared to 0.05 percent for institutional customers, or so states the Form S-1 Coinbase was mandated to file back when its stock went public.

Another crypto platform, Kraken, only charges 0.26 percent per retail trade and drops to zero when trading value and volume increases significantly.

Coinbase’s fees are also said to be somewhat complicated. In other words, they can range from a flat $0.99 to $2.99 for trades $200 or less. Plan on 1.49 percent per trade from linked U.S. bank accounts or a Coinbase Wallet. If you use Google Pay or Apple Pay, or a credit or debit card, or even a wire transfer, you will pay a sky-high 3.99 percent.

Also, Coinbase retail customers pay higher fees in general than the more complex Coinbase Pro where the fees are said to begin at 0.5 percent on crypto transactions $10,000 or under. On trades ranging from $10,000 to $1 million, the fees drop to 0.2 percent for losers and 0.1 percent for winners. The fee can be even lower for professional high-volume traders who work their accounts sometimes without sleep for up to 24 hours at a time. 

You might wonder why Coinbase is so popular if the fees seem so high when compared to other platforms. But you are said to be getting what you are paying for. This holds especially true for newbie traders just entering the volatile crypto market. Coinbase is considered one of the best insured, most regulated, and secure exchanges available. In the 2020s, it’s also one of the most user friendly.