What Is Coinbase And How Does It Work?

Excellent and easy-to-use crypto exchange platforms would play a quintessential role in enabling individuals as well as businesses to explore cryptocurrency as a new digital cash system.

Furthermore, these would allow people to make themselves aware of the variety of cryptocurrencies available for trading, at the same time, simply the process of crypto investments.

Many suggestions come up when talking about such portals, including Crypto.com, Gemini, BitMart, Kraken, and more. However, Coinbase is one such suggestion that is acclaimed to be the best overall. Whether beginners or advanced investors, Coinbase is said to have features for them all.

This article aims to elaborate on understanding Coinbase, learning more about how Coinbase works, what Coinbase Wallet and Coinbase Pro services it offers, and more exciting information about the Coinbase crypto exchange. Read till the end to learn more!

What Is Coinbase?

Coinbase is a cryptocurrency exchange and trading platform that millions of people have been using to buy, sell, transfer, and store cryptocurrency with ease. This cryptocurrency exchange offers free coin storage, but Coinbase brokerage has to be paid to the platform for coin purchase and sale services.

Coinbase’s platform supports some of the most popular and in-demand cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin. In addition, other currencies, also known as Altcoins, are also abundantly available on the crypto exchange. The platform currently supports over 25 different coins, with plans to add more in the future.

Coinbase Company: The Background and Beginning

Coinbase is a company that was founded by Brian Armstrong and Fred Ehrsam in 2012. The two founders started the Coinbase company with an ambitious vision of establishing economic freedom for individuals and businesses, inspired by Satoshi Nakamoto’s proposal paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” 

Therefore, the cryptocurrency service provider aimed to create an open, decentralized financial system that would help bring greater economic freedom to the world, allowing people to empower themselves.

Intending to explore the bitcoin network designed to transmit value, the company wanted to implement that idea and make the financial services readily available to the public.

Brian Armstrong, the current CEO of Coinbase, said in the company’s Investor Relation Series, “We envisaged how we could build a platform to help anyone with a smartphone access money and financial services where every payment could be as fast and cheap as sending an email.”

What Is Coinbase Pro?

Coinbase Pro is the advanced trading platform released by Coinbase Global Inc. The website was initially known as GDAX before being rebranded in 2018 to meet the needs of professional traders. Aside from improved features and tools, Coinbase Pro provides access to digital assets unavailable on the standard exchange version.

Coinbase Pro, as a global platform, provides its services to traders worldwide and offers free fiat onboarding for US, UK, and EU users. Moreover, by supporting a wide range of markets, the exchange provides a secure way to buy, sell, and trade cryptocurrencies online and instantly.

The trading interface includes the essential tools to track the market, monitor one’s orders, manage portfolios, and more.

Additionally, Coinbase Pro ranks alongside some of the most secure online cryptocurrency trading platforms in terms of security. Except for Hawaii, this exchange is fully regulated and licensed in all US states.

The website enforces active coin management protocols such as cold storage and multi-signature wallets to further protect its users’ digital assets.

Coinbase Pro allows users to trade a wide range of digital currencies. They can select a crypto-crypto or a crypto-fiat pair depending on their trading preferences. Regarding fees, the Pro Coinbase brokerage varies depending on whether the user is a maker or taker on the platform.

Coinbase Explained: Advantages and Disadvantages

Following are the advantages of the Coinbase platform:

• Easy To Use. Coinbase log-in and usage are pretty simple and enable users to easily buy, sell, and exchange cryptocurrencies through their Coinbase account.
• Extensive Cryptos Supported. The platform supports various cryptocurrencies, approximately more than 100. These are only growing in numbers, improving the scope of crypto trading.
• Coinbase Earn Opportunities. The platform offers extra earnings in the form of interest on eligible balances. In addition, the company rewards users for watching videos and testing their knowledge. On completing the quiz on the crypto, the user gets rewarded with a bit of that cryptocurrency through Coinbase Earn.
• Lower Coinbase Price With Pro. The Coinbase application allows users to switch to Coinbase Pro, an advanced trading platform for experienced traders and investors, with more features and less Coinbase brokerage.

The disadvantages of Coinbase are as follows:

• Transaction Fees. The transaction fees on the standard version of the crypto exchange platform and other Coinbase brokerage are expensive compared to the pro version.
• Customer Service. Users and experts have criticized Coinbase for its weak customer support system.
• Missing Few Major Altcoins. While Coinbase company provides various cryptocurrencies for investors and traders, many Altcoins are unavailable, limiting the scope of trade to some extent.

Present and The Future: Coinbase Global Presence

The Coinbase company has a widespread presence in the cryptocurrency exchange platform market. It is a publicly-traded, distributed company without a physical headquarters. Instead, all the employees of the company work remotely. There are currently 3,730 employees working for the leading decentralized crypto exchange.

The Coinbase stock is traded as COIN on the American Stock Exchange, NASDAQ. The company recorded its revenue at a value of US$7.84 billion in 2021. In addition, the operating income of Coinbase for the same period was US$3.08 billion, and the net income was US$3.62 billion. Lastly, the total assets of Coinbase were valued at US$ 21.3 billion.

Finance experts believe Coinbase is a good investment in the crypto and financial software industry. The company’s revenue has been considerably increasing over the years, and the operating expenses are relatively low, making it quite a profitable investment.

Given how young Coinbase Global Inc. is, its market performance is acclaimed to be good. Moreover, experts suggest that the company earns the most revenue from new and active investors who have been using the platform for beginning crypto-investments.

It is essential to note that active investors are fundamental to most of the revenue because the Coinbase company makes money when investors use the platform for transactions. Alternatively, a large number of one-timers would not be much beneficial for Coinbase’s future.

The growth of Coinbase Global Inc. would be difficult to forecast because the cryptocurrency landscape is still evolving. Moreover, sooner or later, the state and government might interfere, the extent of which would only be revealed in the future.

At the moment, the company appears to be trading around fair value. Still, its income relies heavily on user crypto transactions and the performance of the most commonly traded crypto assets and Coinbase NFT. Therefore, the company’s future is linked to that of cryptocurrency, which is currently difficult to predict. For new investors, this lack of foresight represents both a risk and an opportunity.

Coinbase For Beginners: A Guide On How To Use Coinbase

Coinbase is one of those platforms for a crypto exchange that has been highly successful and recommended to help those investing in cryptocurrencies for the first time. A user-friendly interface and easy Coinbase log-in process have made it one of the go-to choices for beginner crypto investors.

Here’s a quick guide on how to use Coinbase for beginners.

Step 1. Visit the Coinbase website. And select the Get Started option that will be visible on the top right corner of the screen. The website would then direct the visitor to a new window.

Step 2. In the new window, the visitor is asked to Create An Account. First, they would need to provide their name and email address and set a password for their Coinbase account. After that, there would be specific verification steps in between, and your account would be ready for use.

Step 3. Once the account is created, you’ll be required to further link your bank account with your Coinbase account for the crypto purchasing processes.

Step 4. After the third step, in your Coinbase account profile, you’ll find the Buy/Sell option in the upper-right-hand corner. Click on it, and you’ll see several options for the type of purchases. For example, you may set up a one-time purchase or select daily/weekly/monthly purchase.

Step 5. Next, you’ll be required to enter the amount of your purchase and choose the cryptocurrency you wish to buy on Coinbase.

Step 6. And the final step would be to select a payment method; that’s it!

Coinbase Wallet: A Saviour For Beginner Crypto Investors

Coinbase Wallet is a self-custody wallet that allows its users to keep complete control over their cryptocurrency, implying that the private keys, which represent cryptocurrency ownership, for their wallet are stored directly on their mobile device rather than with a centralized exchange such as Coinbase.com.

It is important to note that Coinbase Wallet is not the same as Coinbase.com, and one does not need a Coinbase account to use the wallet. If one is looking to invest in cryptocurrency, one can resort to the Coinbase.com website. However, for storing the cryptos purchased, one would have to download the Coinbase Wallet application.

Other FAQs – Understanding Coinbase

Take a look at some frequently asked questions about Coinbase Wallet and Coinbase Account to understand the crypto company and its services better.

Q.1 What Is The Difference Between Coinbase And Coinbase Wallet? 

Coinbase Exchange is a centralized cryptocurrency exchange platform, whereas Coinbase Wallet is a non-custodial cryptocurrency wallet. Both are accessible via the Chrome browser as well as Android and iOS devices.

Q.2 How To Use Coinbase On Computer?

To get started, open a browser and navigate to https://www.coinbase.com, or download and launch the Coinbase app for Android or iOS. Note that experts and the website do not recommend using a mobile device’s browser to access Coinbase.

Q.3 What Is Coinbase Wallet Extension For Chrome?

The Coinbase Wallet extension is the most secure and user-friendly way to use cryptocurrency apps in a web browser. To gain access to the exciting new world of dapps and decentralized finance, experts recommend using the Coinbase Wallet extension.

Q.4 Is Coinbase Safe And Legit? 

Coinbase is a trustworthy cryptocurrency exchange. The company is famous as COIN, which is used to identify its shares on the Nasdaq stock market. Yes, Coinbase is a safe cryptocurrency exchange to trade with over 56 million members in more than 100 countries worldwide.

Q.5 What Is Special About Coinbase?

Coinbase is one of the most easy-to-use applications used for cryptocurrency exchange and trading. It has simplified the process of buying and selling Bitcoin and other cryptocurrencies, attracting several individuals and businesses to explore the possibilities of investing in crypto as well as using it for other exchange purposes.

Q.6 Can I Trust Coinbase With Their Bank Account? 

Coinbase, as a cryptocurrency platform, has well-established security measures. For example, Bank account information such as account numbers and routing numbers are stored on Coinbase’s server using bank-level AES-256 encryption. Moreover, all traffic is directed through SSL to prevent outside parties from tracking the users’ connections.

Coinbase – The Key Takeaway 

Cryptocurrency investments can seem daunting if one isn’t aware of how to proceed with them and what essential things have to be kept in mind. However, through crypto exchange platforms like Coinbase, buying and selling crypto has become considerably more manageable.

Coinbase has become a popular choice among crypto investors, especially beginners, as it provides additional unique features such as Coinbase Earn. Moreover, Coinbase company also has other products and services like Coinbase Wallet and Coinbase Pro besides the standard exchange platform.

The global presence and performance of the company have been consistently improving, as a result of which investors have considered Coinbase Inc. a good investment. However, since the value of the company is linked to how cryptocurrencies perform, especially Bitcoin, the value of Coinbase stock fluctuates with changes in the crypto market.

Nevertheless, Coinbase for beginners in cryptocurrency investments is still a consistent choice they make.