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Coinbase

Coinbase Review
Trader's rating 2.8
Editor's rating 4.1

Our Experience

 

When testing the direct purchasing service, provided by Coinbase, we were relatively satisfied. After entering our debit card details it was saved as a payment method. We must notе that our card was 3D-secured, which appears to be a mandatory condition. Having your card stored in the website, as opposed to having to enter the details a second time (which is the case with some websites, dealing with external payment providers) is a huge benefit.

 

Here is a preview of the order screen:

The commission charged was slightly lower than the maximum of 4%, and we had full price transparency. When compared to the 8%, charged by Bitstamp (for direct card purchases), this is obviously preferable. The rate at which we bought Bitcoin was around €14 off the current market price, at GDAX. This is quite reasonable considering the fact we are talking about a volatile asset, trading around  €6,500 at the time of purchase. We tried comparing it with the rate provided by other exchanges, but the price differences (especially since we are talking about EUR trading) were much wider.

 

Trading Accounts

 

 

Account type Initial weekly limit Leverage Fees
Standard €325 None Up to 4%

 

Coinbase is one of the leading US companies in the world of crypto currencies. It operates two separate brands. One of them is Coinbase, a more retail consumer oriented platform for buying Bitcoin with fiat currencies, much like Bitstamp. On the other hand, GDAX (Global Digital Asset Exchange) is a more advanced crypto currency trading platform. This review will be focused on Coinbase.

 

The company, security of funds

 

Company Country Regulation
Coinbase USA NY BitLicense

 

Coinbase operates out of the US, with many subsidiaries around the world. It was the third company to be awarded the New York BitLicense. The story behind this license is quite controversial. In short, the New York Department of Financial Services (NYDFS) wanted to make the Big Apple a “Bitcoin trading hub”, much how it is one of the major centers of traditional finance. The idea, dating from 2015 wasn’t met with much enthusiasm by the leading companies, as many of them preferred to avoid application. Among the dozen who did, Coinbase obtained the license in January of 2017. The entire process is apparently so time (and effort) consuming, a lot of other major players opted out of it, which makes the license borderline useless. 

 

When it comes to crypto exchanges, hacking is an important topic. That being said there haven’t been any major hacks at Coinbase, although numerous individual cases have been reported. Some involve the hackers going past the two-factor authentication barrier, which one would believe to be very secure.

 

As we mentioned above, Coinbase is the retail-oriented brand of the company. As such it accepts fiat currencies and allows an instant purchase of several coins (more on the list, later). The vast majority of user complaints against Coinbase involve the size of the commission fees which the company charges. They vary by region and payment method, but go as high as 4%.

 

In 2018, Coinbase acquired an e-money license from the Financial Conduct Authority (FCA), which allows it to provide payment services in the UK and issue e-money. Abiding by the FCA requirements, Coinbase will be keeping clients in segregated funds and will observe operational standards on par with the other regulated financial institutions.

 

Additionally, Coinbase is backed by a lot of investors, including major players in “traditional finance”. This is another factor which fans of the decentralized aspect of crypto currencies do not enjoy. 

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Only a few coins are available at Coinbase, but they are the majors – Bitcoin, Ethereum and Litecoin. Don’t forget this is an entry-level service, which is aimed at people who are not that familiar with the world of crypto currencies. If you would like to buy less known coins (or altcoins), you could do that at another exchange, after transferring your newly acquired BTC/ETH/LTC there.

 

Weekly Limits

After verifying your e-mail, telephone, ID and credit card, at Coinbase, you can beginning purchasing coins. Our initial limit was €325 per week (via Credit Card). This may vary for you, based on your location (US clients will surely get a USD level). This level can be increased after you reach the maximum and some time has passed. This is done as a security measure and one should not feel frustrated about it.

 

Leverage

Coinbase does not offer margin trading. This is the more accepted practice, when dealing with crypto currencies. The forex brokers who offer Bitcoin trading, on the other hand mostly provide CFDs on it and margin trading is allowed. For a full comparison of trading crypto currencies on an exchange and with a forex broker read this post

 

Fees

The commission structure at Coinbase is one of its criticisms. If you decide to deposit via Credit Card, for instance, you can buy your chosen coin directly. While this may appear to be convenient, it comes at a price – for most countries the commission fee on such a purchase can go as high as 4%. 

 

Alternatively, you can fund your account with fiat currencies, which you can then use to trade. In that case the fees are set at 1.5%, which is pretty high. However if trading is what you are looking for, the company’s other brand – GDAX (as well as many others) are alternatives.

 


Trading platform

 

Coinbase does not provide a platform, as much as it offers an interface similar to an online banking application. Here is an overview (click to zoom-in):

 

 

There is a basic chart in the top section, allowing you to switch between the three supported instruments and multiple timeframes. On the bottom you have a column with all of your wallets with the company as well as a transaction history column. Overall, it doesn’t get any simpler than this. That being the case, we must reiterate, this is only the “real-money payments” brand of the company, while a more dedicated platform is also available at GDAX.

 

Methods of payment

 

When it comes to the methods of payment available at Coinbase, they include Bank Transfer, Credit/Debit Card and PayPal (only for US clients). While we discussed the transaction fees above, it’s worth pointing out that no additional fees are charged for crypto currency transfers to other exchanges or wallets.

 

Conclusion

 

Coinbase is one of the major players in the crypto currency space. The company is focused on allowing people who are not familiar with Bitcoin and allows them an easy way of acquiring crypto currencies. While there isn’t any trading platform to speak of, the company has another brand (GDAX) which provides exactly that. We feel it would be much better for Coinbase to honestly state their trading fees are higher, but you can use your account at their other platform, in a big banner upon account cration. Here are Coinbase’s pros and cons: 

 

Pros

Cons

New York BitLicense Few altcoins available
No major hacks yet High trading fees
Accepts Bank Transfers and Credit Cards  
Easy to use interface  
Ability to transfer crpyto to wallet  

 

Ethfinex

Ethfinex Review
Trader's rating 4.7
Editor's rating 3.8

Trading Accounts & Conditions

 

Account type Leverage Maker Fee* Taker Fee* Deposit Fee Withdrawal Fee**
Standard 1:3.3 0.0% - 0.1% 0.1% - 0.2% 0.1% for Bank Wire only 0.01 ETH

 

* Trading fees depend on users’ trading volume.

**Withdrawals in Status (SNT) & Golem (GNT) are free of charge.

 

As it name suggests, Ethfinex is a cryptocurrency exchange, which is heavily connected to Ethereum. Another thing one could tell by this venue’s name is that it belongs to a group of companies around one of the oldest and most popular exchanges, Bitfinex. Its parent company also runs the Tether.to platform.

 

Trading is live on Ethfinex for all existing Bitfinex users since December 29th. New signups will be available from January 15th. Currently still in beta, Ethfinex platform allows for trading in ERC-20 compatible tokens and Ethereum-based crowd sales with options for margin trading, as well as access to a peer-to-peer funding market. By the time of writing of the present review, the exchange is in the top 15 by trading volume at CoinMarketCap.


In addition, it offers a token of its own, called the Nectar token (or NEC). It is given for free to token market makers in proportion to the volume of trades they participate in on the exchange.

Ethfinex’s security is based on the expertise gained by Bitfinex’s team. The majority of system funds are stored in offline, in ‘cold’ wallets. Only around 0.5% of all crypto assets are accessible in ‘hot’ wallets for day-to-day platform operations. 

 

Ethfinex Advantages

 

Hybrid decentralized exchange, part of a trusted group

Ethfinex is planned as a hybrid decentralized exchange. In the long term, the company plans to move towards a completely trustless exchange, steadily decentralizing ownership of the platform to its community of users. The company’s team has learned the hard way that running an exchange on a centralized server is dangerous. Bitfinex was hacked in 2016, and approximately US$72 million was stolen in the form of Bitcoin. Eventually, the company managed to pay back the money to all its clients.

 

On the other hand, decentralized exchanges do not store coins, funds, private keys or user information on centralized servers, thereby making it very difficult for hackers to compromise sensitive information.

 

Competitive fees

At Ethfinex market makers are charged up to 0.1% per trade, and market takers – up to 0.2%, which is in line with the average pricing in the crypto world these days. Those users who trade in large volume get discounts. By the way, Bitfinex has exactly the same trading fee structure.

 

Deposit and withdrawal fees by Ethfinex are also competitive. Deposits in digital assets are free of charge, while those in USD are charged with 0.1%. Withdrawal fees of this exchange are also in line with the average in the industry.

 

 

Leveraged trading available

Similarly to its older brother Bitfinex, Ethfinex provides margin trading. The maximum leverage level available at both exchanges is 1:3.3. If you want to speculate aggressively with the price of Bitcoin or Ethereum, there are some forex brokers that offer higher leverage ratios.

 

>>Forex brokers offering leveraged Ethereum trading<< 

 

We must mention that trading in volatile assets such as cryptocurrencies involves risk of loss, which are multiplied if you use leverage. So, be careful when trading on margin.

 

Many Ethereum-based coins available

Ethfinex offers trading in decent amount of Ethereum-based tokens, such as Ethereum, OmiseGO, EOS, Aventus, Status, Golem, and more. Although its crypto portfolio cannot be compared to the one offered by EtherDelta, the trading volumes at Ethfinex appear higher on most instruments.

 

Fiat accepted, bank wire transfers supported

This exchange accepts US dollars, one of the most popular “traditional” currencies.   This makes the services offered by Ethfinex more accessible to beginner traders, as it accepts cash payments via bank wire transfer.

 

Community vote for listing tokens

One of the biggest problems with most centralized exchanges is their reluctance to list tokens with a large community backing. That is why we consider Ethfinex’ decision to list new tokens after rounds of voting by the crypto-community as an advantage.

 

Ethfinex Disadvantages

 

No Bitcoin

As this platform is dedicated to Ethereum and ERC-20 tokens, you canot trade in Bitcoin on Ethfinex. However, you can always do that on the group’s Bitfinex platform. 

 

Registered offshore

While Bitfinex is operated by Hong Kong based iFinex Inc., the company operating this exchange, Ethfinex Inc., is registered offshore. According to its Terms of Service, the governing law is the one of the British Virgin Islands. Companies registered offshore generally do not inspire a lot of trust.

 

Dependent on the Ethereum network 

If there is serious backlog on the Ethereum network, the activity at Ethfinex will also become slow, as trading is done mostly against ETH.

 

Conclusion

 

Launched by an established group in the cryptocurrency world, Ethfinex seems like an attractive exchange, especially to fans of Ethereum and Ethereum-based coins. It is planned like a platform based on a hybrid decentralized architecture, that will allow decentralized exchanges to plug into it and trade with Ethfinex customers, as well as each other.

 

Now in beta, Ethfinex is accessible to Bitfinex account holders with competitive trading and transfer fees. There is a decent amount of altcoins available to trade at the exchange, and besides, cash is accepted. Similarly to Bitfinex, Ethfinex provides leverage up to 1:3.3, which is a nice extra feature that most exchanges do not offer.

 

Although little to no regulation is applied to the crypto-exchanges in most jurisdictions, we don’t like the fact that Ethfinex Inc. is registered offshore. As we mentioned above, some forex brokers offer CFDs on digital assets. For those ofyou who prefer to invest in regulated entities, we have prepared a list of well-regulated ones.

 

>> Regulated Bitcoin forex brokers<<

 

Here is our summary of this exchange:

 

 Pros

 Cons

 Hybrid decentralized exchange, part of a trusted group

 No Bitcoin

 Competitive fees

 Dependent on the Ethereum network

 Leveraged trading available

 Still in Beta

 Many Ethereum-based coins available

 Registered offshore

 Fiat accepted, bank wire transfers supported

 

 

 

Forex
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