Arguably the biggest crypto platform in the U.S., Coinbase recently made its public debut on a traditional exchange, arriving via a direct listing rather than a more traditional initial public offering. Coinbase’s market cap exceeded $100 billion after its debut on Wednesday morning, 14 March on the Nasdaq, though the stock fell later in the day. Coinbase shares began trading at $381 each, up 52 percent from a reference price of $250, eventually closing at $328.28. That gave the company a valuation of $85.7 billion based on all its outstanding shares, more than 10 times higher than Coinbase’s last private valuation.
Since its formation in 2012, Coinbase has become the go-to crypto broker and exchange for the western market. With around 40 cryptocurrencies available to buy and sell, their global services have come to be very popular and it’s hard to find a crypto-trader in the world who is not familiar with them.
Facing so much competition from other exchanges for the top spot in the market, how did Coinbase manage to stake their claim? Simplicity was the key. A simple user interface, a simple set up process for novice crypto investors, and a simple way of purchasing cryptocurrency directly from your bank account.
Read on as Decentralized Africa gives you our perspective on Coinbase.
The Positives
Around 40 different cryptocurrencies to choose from, with services enabling trading, staking, selling, and investment.
High liquidity is another major advantage of Coinbase, as, despite crypto being a highly volatile market, they can give some protection from price slippages to their users.
It’s incredibly easy to use, easier than virtually every other crypto platform. It’s easy to sign up, to transfer funds, to make purchases and sales, and to withdraw fiat currency.
Their recent ‘earn crypto while learning about crypto’ educational platform offers cryptocurrency rewards for people who take part in their mini-courses, worth almost $100.
Great Android and iOS apps provide a quality user interface to those who want to trade on-the-go as well as in their browser version.
Very good security measures, including two-step verification, biometric fingerprint login, insurance if Coinbase is breached (not if your account is breached), and 98% of user funds are stored in offline cold storage.
The Negatives
The transaction fees are high compared to other exchanges, who offer much lower fees, but can’t compete with the ease and simplicity. For many novice crypto-traders entering the market for the first time, a small transaction fee seems fair, but once they are making trades and deposits regularly, their opinion quickly changes.
You are not in control of your wallet keys. This is a factor that has led many crypto-traders to move to DEXs (decentralized exchanges). Most centralized exchanges hold your wallet key information as part of the deal because they need to connect your wallet directly with their platform. Not having complete control over your wallet and its contents is a dealbreaker for many, who rightfully argue that this contradicts the mission of DeFi.
Coinbase is great for mainstream cryptocurrencies, but when it comes to the quirky altcoins that are trying to grow communities and find supporters for their technology, they are lacking. Rival platforms such as Binance US, Bittrex, Gemini or Kraken offer hundreds of altcoins, whereas Coinbase has just a few dozen.
Membership and altcoin availability changes by region, rather than giving users consistent services around the world.
What cryptocurrencies can you find on Coinbase?
In alphabetical order:
Balancer (BAL)
Bitcoin (BTC)
Compound (COMP)
Ethereum (ETH)
Chainlink (LINK)
REN (REN)
USD Coin (USDC)
Universal Market Access (UMA)
Uniswap (UNI)
yearn.finance (YFI)
0x (ZRX)
and so many more!
Some more information on fees
As we mentioned, the fees on Coinbase are high, unless you’re trading millions, as the fees are scaled.
Here’s a table that provides a better explanation on trading fees.
Note that Takers are traders whose trades, either buying or selling, are fulfilled instantly, whereas Makers are those whose orders aren’t carried out immediately.
As well as these high fees for trading, Coinbase is notorious for having high fiat deposit and withdrawal fees. In simple terms, putting your traditional currency into Coinbase will cost you, and it will cost you again to get it out!
For Coinbase users who want to navigate their way around these fees, see Coinbase Pro (we will provide more on that platform in another article).
The final say
Coinbase is a great starting point for new crypto traders and investors. Thanks to a simple and familiar UI and UX, they’ve managed to win a huge share of the market. It is one of the most expensive platforms, a fact which eventually drives away regular traders (or moves them on to Coinbase Pro), but at the same time is something that the inexperienced gain a valuable lesson from.
Originally posted on https://decentralised.africa/
