When you start looking into cryptocurrency trading, then you’re likely to come across Coinbase. It’s one of the best known sites to trade online currencies, attracting users from across the globe.
If you’re a beginner to crypto trading, then safety should be one of your primary concerns.
Online currency trading always comes with a risk, and it’s the responsibility of the platform to keep this risk minimal.
Coinbase aims to improve the crypto trading experience for both beginner and advanced users, while keeping transactions safe.
Coinbase is proud of their safety features, which have previously caught hacking attempts before any damage was done.
If you’re looking to enter the world of crypto trading, and you want the safest way to do so, read our complete guide to Coinbase for beginners.
What Is Coinbase?
Coinbase is the biggest and best known cryptocurrency exchange site currently available.
It was founded in 2012 as a trading platform for Bitcoin, and has since expanded to support a wide number of cryptocurrencies.
Based in San Francisco, Coinbase is an accessible trading platform for those who are new to crypto trading, although it does charge a fee to use.
Coinbase is popular because it’s so easy to use, with over 73 million members in 100 countries discovering the platform.
It’s also a trusted brand, with a reputation for safety. But just how accurate is this reputation?
Is Coinbase Safe?
Coinbase has had a reputation for safety, but several high profile hacks and attempted hacks have taken away some shine.
However, Coinbase does use industry-leading security practices to keep your currency as safe as can be.
One of Coinbase’s major security features is offline cold storage. Coinbase keeps 98% of funds stored offline, providing an extra level of security against theft or loss.
Data is removed from the internet, split and encrypted, and then stored on USB drives and paper backups.
These backups are then distributed around the globe and kept in safe deposit boxes and vaults.
Not all the assets traded on Coinbase are stored offline. Instead, 2% is kept online, to cover any losses.
With this 2% backup in a hot wallet, if you were targeted by a hacker, Coinbase can reimburse you.
Another key feature of Coinbase security is its 2-step verification. 2-step verification adds another layer of protection by requiring you to enter a code sent via text message before logging into your account.
This makes it harder for hackers to gain access to your accounts.
Coinbase wallets and private keys are stored using AES-256 encryption, and the website runs over encrypted SSL.
This is in line with the payment industry’s best practices, giving you that extra security.
The employees of Coinbase are also subject to criminal background checks and required to encrypt their hardware.
Login attempts are rate limited, SQL injections filter and verify requests, and passwords in the database are hashed.
No cryptocurrency exchange is completely safe, but Coinbase is one of the safer trading platforms out there.
Cash stored in a Coinbase wallet is FDIC insured for up to $250,000, and cold wallet storage adds an impressive layer of extra safety.
Is Coinbase Good For Beginners?
Yes, Coinbase is a good choice for beginners. Although Coinbase may not be the cheapest option, they do offer a great user experience.
You can start trading straight away, with multiple currencies available.
Setting up a Coinbase account is relatively simple. Plug in your details, and you’ll be given access to your verified account in good time.
You will need to upload a government-issued photo ID, and the last 4 digits of your Social Security Number. Choose a secure password, and you’re almost ready to go.
Your Coinbase account will need to have access to a bank account, debit card, or wire transfers.
This is very easy to do, and linking payment methods is simply a matter of clicking “Link New Account”, and filling in your banking credentials. You can’t pay on Coinbase via credit card.
To buy, trade, and store crypto safely, you need to have a digital wallet.
Coinbase offers the Coinbase Wallet, an additional feature that crypto-beginners will appreciate, as it allows you to trade crypto in one place.
Trading and selling on Coinbase is exceptionally easy. And there are plenty of trading options, including Bitcoin, Ethereum, and XRP.
The downside to this ease is that Coinbase charges a high transaction fee, especially compared to other currency exchange sites.
These transaction fees are incurred with every trade and can stack up quickly.
But if you’re new to crypto, the ease of Coinbase might make up for the extra cost. Once you’ve mastered the platform, you can look for less user-friendly sites with smaller fees.
Coinbase also offers Coinbase Pro. This offers lower transaction fees, and the ability to choose your own market price. A complex interface makes Coinbase Pro less accessible to new users.
Is Coinbase Safe For Beginners?
Coinbase is a great platform for crypto exchanges, especially for a beginner.
Although safety can’t be 100% guaranteed, the additional security measures such as cold storage make it a relatively secure place to trade your digital currencies.
Additional features such as the Coinbase wallet also adds to the safety of Coinbase.
The privacy key gives you extra control over the funds, and the complementary user interfaces make both platforms easy to navigate.
The cold storage security feature does give an added protection to accounts with Coinbase, which new crypto investors should appreciate.
It’s reassuring to know that the money is stored offline and away from many hackers.
Coinbase is a great place to learn the basic transactions, then experienced traders can move to Coinbase Pro.
Final Thoughts
Although no platform is ever completely safe for crypto trading, Coinbase has created a space that’s loaded with security features.
Beginners will appreciate the extra security, but the main appeal is the usability of the site.
With an easy sign up process, a quick deposit time, and even a Coinbase app, it’s a good place to learn all about crypto transfers.
Financial Disclaimer
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