Coinbase is one of the most popular and reliable sources of cryptocurrency exchange. From cryptocurrency investments to wallets for retail investors and even their own U.S. dollar stable coin, Coinbase provides a variety of products at your service.
Coinbase is a licensed cryptocurrency exchange service. It is also regulated. This is concerning 30 states and territories of the United States. Nevertheless, it is a legitimate concern if you are worried about the safety and security of your money.
Read on to get answers to the question of how safe is Coinbase in 2021.
Is Coinbase safe in 2021?
Coinbase has been around for a few years-eight to be exact. Since 2012 they have been providing a series of services that have kept expanding. However, to answer how safe is Coinbase in 2021, let’s find more about them.
How Legitimate is Coinbase?
Are their services all legitimate? Well, technically, Coinbase has a host of licenses in place. It has over 40 different licenses to operate. This ensures their integrity and that they are handling your finances with all possible care.
Coinbase is currently available in 30 U.S states and territories. It is also available in only 32 countries around the world. Therefore, it is essential to verify whether Coinbase is available in your region at all. Subsequently, you must verify if there are any special licenses or regulations in place.
Coinbase has a variety of security measures. To know about how safe is Coinbase in 2021, it is important to know about them. However, it is also important to remember that the security of your account also depends on you.
The use of strong, uncommon passwords, correct credentials, and additional security measures like two-step verification is absolutely essential. This applies to any service you use.
Some of the most important security measures by Coinbase include login via your fingerprint and two-step verification. There is also a feature that ensures insurance in the unlikely case that Coinbase faces a security breach. This, however, does not apply if your account is compromised through your own negligence.
This insurance is provided by gathering Coinbase funds and balances. They are held in liquid U.S. Treasuries, USD custodial accounts, or denominated market funds. This entire process is owing to the fact that digital currency cannot be tagged as legal tender. Subsequently, it does not have backing from the FDIC or SIPC.
Coinbase stores almost 98% of its user’s funds in offline cold storage. As you can see, Coinbase provides a large number of security measures to your funds and your account. It can be deemed the best compared to many other leading services.
This is why Coinbase is reputed to be a great starting point for those interested in cryptocurrency. It is also good for experts who can use Coinbase Pro with fewer charges and a host of services. It is a good way to be in control of your funds without any interference. In the long run, you can also withdraw your holdings and store them in your own cold storage.
Security Issues-Should You Be Concerned?
One of the main issues that have often been voiced about Coinbase is that users do not control their wallet keys. While this is a common practice among most exchange services, it is not a very good one. The lack of complete owner control can be frustrating.
When you, as a user, purchase cryptocurrency from Coinbase, it is stored in a remote wallet. Now Coinbase or any cryptocurrency exchange service has no control over this wallet. This also means that you do not have complete control over your holdings.
It is understandable to think twice when faced with this fact. You might feel that this process is against the basic promises that decentralized currency and finance make. The key promise of complete control over your funds might seem to be compromised under this policy. While that is true, it has not given rise to many major issues to date.
If you feel too skeptical, there are ways to avoid this. You, that is the investor, can withdraw the money to your personal wallet. It is preferable you do this with a hard wallet. You can then successfully evade the above-mentioned concern.
While you are on the issue of security, you must also know about some of the other cons of Coinbase. While there aren’t many, it is better to know about the few that are present.
High Charges for Regular Version
Coinbase comes in two versions- the regular version and Coinbase Pro. Coinbase charges some of the largest fees compared to other similar services. Users of the regular version have to pay a large amount of money to avail of the services.
To combat these high fees, you can switch to Coinbase Pro. It is free to avail of. You will also have to pay lower fees. It also has a lot of additional features that are not present in the standard version. However, it can be overwhelming if you are a novice crypto trader.
Lesser Altcoin Options
Coinbase has several altcoin options. While they are sufficient for casual interests, you may be disappointed if you want to focus on altcoin trading. It is not a pressing concern, but rather an awareness of what is lacking.
There are several pros to using Coinbase. To find a comprehensive answer to how safe is Coinbase in 2021, here is a quick overview of the most important ones.
- High Liquidity in a market that is quite volatile
- Easy to sign-up and use
- A variety of services available
To the question of how safe is Coinbase in 2021, we hope you have gotten your answers! As we have seen, there are many security measures in place. However, the best way to ensure top security for your holdings is to be an alert and careful user.
Overall, Coinbase is a very useful cryptocurrency exchange service. It has a multitude of features that are easily accessible to anyone. It is an especially good place to start when you are just venturing out into the world of cryptocurrency.