A detailed comparison between Binance and Coinbase exchange.

• Coinbase Exchange Faq Reviews
• Coinbase Exchange Faq Free
• Coinbase Exchange Faq App
• Coinbase Exchange Faq Log

Coinbase is also registered as a Money Services Business with FinCEN. Coinbase is required to comply with a number of financial services and consumer protection laws, including: The Bank Secrecy Act, which requires Coinbase to verify customer identities, maintain records of currency transactions for up to 5 years, and report certain transactions. Coinbase only allows you to sell directly into your Coinbase fiat wallet. However, there is no limit on the amount you can sell to your wallet. After selling to your Coinbase fiat wallet, you can opt to either withdraw funds to your US bank account or repurchase cryptocurrency on the platform.

For anyone new to the world of cryptocurrencies, getting to grips with the variety of coins on offer can be intimidating. The same can be said for the wide range of cryptocurrency exchanges that service the sector, and chances are that even if you are still new to the scene, you’ve heard of Coinbase and/or Binance.

The two are arguably the leading exchanges at the moment, and provide services that suit beginner traders and investors while also catering to more advanced operators. As a result, we take a look at the two cryptocurrency exchanges and compare them to see how they match up, and who might benefit from using them.

Overview

Binance

Binance is a relatively young upstart by comparison, and launched in 2017. The exchange was founded by the ex CTO of OKCoin, Changpeng Zhao who raised $15 million in funding via an ICO (Initial Coin Offering).

Despite its relative youth, the exchange has become extremely popular, and is the go to option for a large percentage of the crypto trading community. The exchange has mostly operated as a crypto to crypto platform, and provides access to over 500 different cryptocurrencies. However, earlier this year, the exchange partnered with Simplex to enable crypto purchases via credit and debit card. Binance has also moved the location of its headquarters numerous times and after operating out of China, and Japan, is currently based in Malta. The exchange also allows its users to trade without having to undergo extensive KYC identity checks.

Coinbase

Coinbase is one of the most established cryptocurrency trading platforms in operation and dates back to 2012. It was launched by Brian Armstrong and Fred Ehrsam, and is based in San Francisco, USA. The exchange enjoys a good reputation and has been backed by venture capital and investment firms such as Union Square Ventures, Digital Currency Group and Andreessen Horowitz. Coinbase is transparent in nature and operates in line with regulations and applies strict KYC/AML policies. The exchange can be accessed from more than 100 countries and while it offers a rather limited selection of digital assets, it also allows its users to make fiat to crypto transfers and vice versa.

Supported Currencies

Coinbase Cryptocurrencies

Up until recently Coinbase only provided access to Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. However, over the past year or so the exchange has begun to list more coins and now provides universal access to around 17 digital assets. These new additions are mostly ERC-20 tokens and include LINK, BAT, ZRX, and REP, alongside stable coins like DAI and USDC. High cap cryptos like XRP, EOS, and XLM are also supported.

Most importantly, Coinbase allows itsusers to use fiat currencies as a payment method, and supports ACH (US), SEPA(Euro), and Faster Payments (UK) bank transfers. Anyone outside of theseregions can make deposits and withdrawals via credit and debit cards which isstill quite a unique feature for a cryptocurrency exchange.

Binance Cryptocurrencies

Binance is something of a market leader in this area, and made its name as a crypto to crypto exchange. The platform currently supports over 500 digital currencies and suits anyone looking for a greater range of tokens to trade. Binance provides trading pairs based on digital assets including Bitcoin, Ethereum, Binance Coin (BNB), and stablecoins such as Tether. Using BNB can help to lower your trading fees on platform, and after being known for listing ICO tokens, Binance also uses its Launchpad to promote and list new projects.

As a result, Binance is home to largecap, medium cap, and small cap projects, as well as ERC-20 (Ethereum network), NEP-5(Neo network), and BEP-2 (Binance chain) tokens. While the exchange does notallow bank transfers, a recent link up with Simplex allows its users to makepurchases of selected coins via credit/debit cards.

Fees

Binance Fees

This is another area in which Binance holds a significant advantage. The platform features low fees in comparison to other exchanges, and adds a fee of 0.1% per trade for anyone conducting less than 50 BTC/BNB worth of trades within a 30 day period. This fee becomes reduced once these limits are passed, and also if you pay for transactions using BNB tokens. Withdrawal fees depend on the digital assets being transferred and also change over time and Bitcoin currently accrues a withdrawal fee of 0.0005 BTC.

Coinbase Fees

Coinbase is known for having highfees and they vary depending on the trade amount, jurisdiction, and the paymentmethod used. Here “variable” standard buy/sell rates range from 1.49% to 4%.However, Coinbase sets it fee charge to be the greater of (a) a flat fee or (b)the previously mentioned variable fee determined by region, product feature andpayment type.

The flat fee rates are as follows:

• For a transaction amount of up to $10, the fee is $0.99.
• For a transaction amount between $10 and $25, the fee is $1.49.
• For a transaction amount between $25 and $50, the fee is $1.99.
• Foe a transaction amount between $50 and $200, the fee is $2.99.

For transactions than $200, Coinbase adds a variable fee of 1.49% to your total, and credit or debit card purchases accrue an additional 3.99% fee. Furthermore, the base rate for all Purchase and Sale transactions in the U.S. is 4%; however, Coinbase waives a portion of the transaction Fee depending on the payment method used. The fees can start to add up, and it’s a good idea to have a look at the official fee structure to keep on top of things.

Ease of Use

When comparing the two platforms,it’s safe to say that most people will find Coinbase easier to use when theyfirst get started. The interface is well designed, and everything is keptsimplistic which makes it easier for newbies to stay on top of what they aredoing. The layout keeps things simple, and the dashboard contains an overviewof your portfolio, coin prices, and provides you with your recent activity/transactionhistory. The other tabs are also easy to spot and the limited amount on coinson the platform also helps to keep things relatively simple. All in all,Coinbase is one of the easiest platforms to use for anyone new to buying andselling cryptocurrencies.

Binance comes with a slightly sharperlearning curve, and people usually move onto Binance after gaining someexperience dealing with other exchanges. Most importantly, the platform allows you to choose between two differentinterfaces, namely Basic and Advanced.

The basic version is aimed at beginners,and contains all of the most important features on the main page. The chartsand order box take centre place, while the right hand side contains the listsof BNB, BTC, Altcoin, and Stablecoin markets that users can trade in. Pricelists that are updated in real time are displayed on the left side of the page.While more difficult to use than Coinbase, Binance’s Basic mode is still one ofthe more easy to use interfaces for crypto exchanges that deal with a range ofaltcoins.

The Dashboard is also more difficultto navigate and contains more tabs and features than those offered by Coinbase.Again, it’s usually not the first destination for new traders but the exchangeprovides a number of guides to help you to get to grips with it, and things aregenerally well laid out.

Security Measures

Coinbase Security

Coinbase makes use of industry standard security protocols such as passwords and two factor authentication (2FA). Here, 2FA can be used by phone, or apps such as Authy or Google Authenticator. Coinbase also notifies users when a new IP address or device tries to gain access to their account.

The exchange is also transparentabout its storage methods, and 98% of customers’ crypto assets are storedoffline via both hardware and paper wallets that are also stored in secure vaultsand safety deposit boxes across a number of global locations. Coinbase alsouses fund segregation to keep customer funds separated from company operationalfunds. Customer funds are stored in custodial bank accounts and, only Coinbasecustomers have any legal rights to the funds.

Any funds stored online are fullyinsured by a syndicate of Lloyd’s of London, and United States residents usingthe USD wallet are covered for any amount up to $250,000 as a result of FDICinsurance. However, despite this, it’s important to remember that customers arestill liable for their losses if their personal accounts get compromised.

Binance Security

Binance while well respected is less transparent about its security protocols. However, personal account security is top notch with 2FA and email verifications operating as standard. Users can also choose to adopt further security methods such as using an external device like a Yubikey for verification. Most importantly, the exchange suffered a hacking attempt in March 2018 which was picked up by internal security systems and thwarted as a result.

Furthermore, Binance was eventually breached in May 2019, when a hacker gained access to user information such as API keys and withdrew over $40million worth of crypto assets. However, Binance covered these loses in full using their Secure Asset Fund for Users (SAFU) security fund, and reimbursed all users who suffered losses.

Regulatory Compliance

Coinbase is based in the USA, andcomplies with U.S. laws and regulations at all levels. The exchange complieswith the Bank Secrecy Act, the USA Patriot Act, state money transmission lawsand regulations, and is registered as a Money Services Business with FinCEN. Asa result Coinbase is fully accountable and transparent in its operations, andis one of the industry leaders in this regard.

Interestingly, when the USInternational Revenue Service (IRS) made a request for the records of all UScitizens purchasing BTC between 2013 and 2015, Coinbase managed to protect itscustomers by narrowing the scope of the investigation, and Coinbase was finallyruled to provide the personalinformation of US customers who made transactions greater than $20,000 in asingle year between 2013 and 2015.

While remaining professional in itsoperations, Binance is known to be less friendly with the authorities, and theexchange has moved its head office from Shanghai, China to Japan, andthen onto Malta in an effort to stay ahead of strictregulators. Despite this, the exchange moved to restrict UScustomers in August 2019, and announced that they would eventually block US residentsfrom making trades and deposits on the platform.

Customer Support & Additional Resources

Coinbase offers customer supportthrough email, and responses typically take around 24 to 72 hours. The exchangealso provides an extensive Knowledge Base and FAQ section on their site whichis helpful for new traders. Coinbase Earn is a learning portal that allows verifiedmembers to learn about selected coins and receive payouts in the coin aftercompleting a course.

Educational tasks include watchingvideos, and filling out quizzes, and cover coins such as Stellar Lumens (XLM), Tezos(XTZ), Basic Attention Token (BAT), and Maker Dai (DAI). Coins received aftercourse completion are stored in your Coinbase wallet, and can be traded afterbeing received.

Binance operates a similar emailsupport system and customers can also contact the team by submitting supporttickets via an online form on the website, and responses are made via email. However,responses are known to take a while, and there is no current live chat support feature.Binance outdoes most other exchanges with regards to its learning resources andon top of its FAQ and Support Center section it also provides learningresources via its Binance Academy, Binance Info, and Binance Researchoffshoots.

Sister Platforms

Coinbase Pro

A more advanced alternative to Coinbase called Coinbase Pro is tailored to more experienced traders and contains a wider range of features. These include more extensive charts with a full range of technical indicators, more complex order types, and margin trading. Coinbase Pro also enjoys lower fees and suits Coinbase users looking for additional features or who are ready to upgrade their trading experience.

Binance Regional & Binance DEX

Despite its relative youth, Binance continues to expand at a rapid rate and has launched fiat to crypto exchanges including Binance Jersey for European customers, and Binance Lite Australia for its Australian client base. The exchange has also launched Binance Uganda to serve the African market and most importantly has also launched Binance US which serves the US market and requires full KYC identity verification. Binance also launched a DEX (Decentralized Exchange) platform in April of 2019.

Binance vs Coinbase: Comparison Table

Conclusion

Both Coinbase and Binance are solid choices for anyone interested in trading cryptocurrencies and the two exchanges generally serve two different market sectors. Coinbase is a great choice for a beginner who wants to gain quick access to a few leading cryptocurrencies such as Bitcoin and Ethereum. It also suits anyone looking to purchase coins via traditional financial methods such as bank transfers and debit/credit cards. The overall ease of use and commitment to remaining regulatory compliant makes Coinbase an overall safe choice for traders of all levels. If you’re interested in learning more about other exchanges, checkout our post titled Top 7 Coinbase Alternatives.

Binance benefits from providing access to a wide range of coins and facilitating low fee trading. While more difficult to use, it provides a top notch service and caters to anyone with a more intermediate understanding of dealing with cryptos. Its more advanced interface allows for swing trading and the relaxed verification requirements suit anyone reluctant to provide their personal information. All in all, both exchanges suit different requirements, and can be seen as complementary service providers for the crypto trading community.

In this post we are going to cover:

• if Coinbase keeps your data safe
• if Coinbase keeps your coins safe
• if Coinbase will let you withdraw your coins
• if Coinbase is a scam

Plus more... Read on to learn everything you need to know about Coinbase safety.

When you start out in crypto, your immediate impulse is to store your coins on the exchange you buy them from.

Coinbase is one of the well-known and popular places to buy Bitcoins.

Because of this, many people buy their coins there and never move them…but is this safe?

1. Will they keep your coins secure?

2. Will they let you withdraw them?

3. And will they respect your privacy

Find out everything you need to know about Coinbase and its history and security practices in this complete guide.

Introduction

In spite of Coinbase’s good record with fund management and suffering no significant losses since its October 2012 launch, there are still reasons to question the exchange’s security and safety.

This article breaks down three perspectives from which Coinbase might be vulnerable to attack or act in bad faith. We attempt to explain why choosing the more costly and inconvenient self-custodianship of your coins is preferable to handing that responsibility to Coinbase.

Coinbase Exchange Faq Reviews

Ultimately, though, it’s up to you to decide whether you prefer to trust a bank with your Bitcoins, or you’re ready to take the first step towards financial sovereignty with a Billfodl and a hardware wallet.

Here is what we are going to cover in the following chapters - you can click each one to scroll directly to that chapter.

QUICK TIP: The best place to store coins after you buy is not on an exchange. You need to buy a hardware wallet like a Ledger or Trezor to store them yourself.

Is Coinbase a Safe Place to Store Bitcoins?

In a blog post from 2016, Coinbase CEO and Co-Founder Brian Armstrong has boasted about storing about 10% of bitcoins available in circulation.

Since then, the number of Coinbase users and corresponding investments has grown so much that the company generated billion dollar revenues just a year later.

While this might look like a good sign from a functional perspective, there are still reasons to feel doubtful and concerned.

Hacking Coinbase

Just because something is trusted by millions of users doesn’t mean that it’s secure and safe to be your custodian.

At the end of the day, trusted third parties are security holes and the whole point of Bitcoin is to participate in a permissionless system which grants you financial sovereignty.

Bitcoin history shows that titan custodians are bound to fall.

Though Coinbase didn’t lose funds in its first seven years of existence, its security should still be questioned and scrutinized.

The Bitcoin space still echoes with stories of financially ruinous events on exchanges.

Mt. Gox

The first Bitcoin exchange, which got hacked for almost 750,000 BTC.

Bitfinex

Lost 120,000 BTC when some unsecure multi-sig wallets broke.

QuadrigaCX

The owner unexpectedly died and took the private keys to customers’ with him.

Binance

Lost 7000 BTC in spite of constant “safu” claims.

Just because Coinbase hasn’t been hacked yet doesn’t mean that it’s invulnerable in the future.

The good record is just an indication of a better performance than the rest. Large amounts of bitcoins being stored in hot wallets for quick trades are perceived as honeypots for hackers.

The scariest part is that malevolent cyber attackers don’t even have to target the wallet encryption of an exchange like Coinbase: sometimes it’s enough to steal the sensitive user data and extort the exchange.

In a recent case, a hacker demanded for 300 BTC after breaking into Binance’s KYC (Know Your Customer) database and threatening to publish hundreds of pictures of users holding their national IDs for verification.

When negotiations failed,the attacker simply dumped the data in a Telegram group and exposed the kind of sensitive information that can be exploited by bad actors.

Furthermore, as a licensed American company, Coinbase must comply with both federal and state laws. If the US Government decides that bitcoins are illegal assets and all exchanges should freeze funds and stop trading, then it will have to act against the financial interest of its customers.

And even if financial compensations are given in USD (much like the case of the Gold Reserve Act of 1934) in exchange for the seized BTC, you still lose due to receiving a highly inflationary and depreciating asset that can be confiscated and censored by the government.

This is just hypothetical, but not impossible.

How is Coinbase Insured?

Since November 2013, Coinbase has insured user funds through Aon, the world’s largest insurance broker.

Furthermore, on the exchange’s support page it’s clearly stipulated that amounts up to $250.000 are insured and will be returned to customers in the event of a hacking or failure.

While this is definitely great, you should keep in mind that what you’re getting is infinitely inflatable fiat, not scarce bitcoins.

If your bits of digital gold get lost, it definitely won’t be Bitcoins that Coinbase and Aon send you as a form of compensation.

US dollars can be inflated at an arbitrary rate which is dictated by circumstance, while bitcoins are issued according to a schedule and will only exist in a total amount of 21 million.

If you believe in Bitcoin’s success, it’s probably not a good idea to trust Coinbase with your funds.

Past events are not always relevant for the future, but they can serve as informal education to prevent history from repeating itself.

If you choose to hold your bitcoins on Coinbase, you trust that the company has learned its lessons from the failures of its peers.

On the other hand, if you choose to become your own bank by embracing financial sovereignty, you prove that you have learned the most important lesson about Bitcoin: never trusting third parties with your money.

Is Coinbase Safe for Mass Withdrawals?

Bitcoin was created as a response to a fiat culture which generates arbitrary inflation rates and fractional reserves (where only a fraction of customer’s money is actually available for withdrawals).

Coinbase Exchange Faq Free

When you go to a bank and request to withdraw a large sum of money, it’s likely that the institution will be unable to make the payment on the spot

Coinbase Exchange Faq App

Instead, they will enforce a daily withdrawal limit on you.

A run on a bank during the great depression - everyone struggles to withdraw their money

Coinbase Withdrawal Limits

When you deal with Coinbase, you must be absolutely certain that the exchange is able to let you withdraw the amount of Bitcoins you bought and hold in their custodial wallet.

Right now, there are no restrictions in regards to how much you can withdraw at one time (at least according to Coinbase’s website).

However, you can never tell when regulations get stricter and it becomes very hard to get your coins out of the exchange due to the increased demands and verification.

Your Bitcoin is Subject to International Relations

If you’re a non-US citizen from one of the supported countries and the United States government ends up having bad diplomatic relations with your national government, then it’s very likely for your funds to get frozen all throughout the conflict.

This happened to Iranian users who were trading on Bittrex and who were affected by the sanctions of US Treasury Department’s Office of Foreign Assets Control (OFAC).

They didn’t get a fair deadline to withdraw their coins and could only hope that the conflict ends as soon as possible and the records don’t get rigged.

Conversely, Coinbase operates in over 100 countries and you can never tell when yours gets targeted by the global financial enforcement of Uncle Sam.

As an American company, Coinbase will have no choice but to comply with the orders given to them by OFAC.

Therefore, it’s unreasonable to assume that the exchange will act in your best interest – especially if you’re not an American citizen and your country can get in conflict with the USA.

Proof of Keys Movement

In order to challenge the power that exchanges have over users and revitalize the ideas that Satoshi Nakamoto introduced to the world, prominent Bitcoiner Trace Mayer organizes an annual event which encourages community members to withdraw all funds from exchanges.

The name of this movement is “Proof of Keys”, takes place on January the 3rd (the same day when Bitcoin’s genesis block was mined) and is meant to be a way of keeping exchanges accountable and honest.

Unfortunately, the numbers reported by exchanges were never threatening for their regular affairs, which means that there are still very few individuals who learned their lessons from the Mt. Gox story.

Proof of Reserves Movement

There is also a movement called “Proof of Reserves” which aims to hold exchanges accountable by demanding for greater transparency.

You can read more about proof of reserves.

In the case of Coinbase, we don’t know for certain how many bitcoins they own, which means that it’s hard to tell whether or not they engage in fractional reserving.

To this day, the only exchange which conducted and passed a proof of reserves audit is Kraken, and the event took place in 2014.

This situation won’t improve if we choose to blindly trust our exchanges, as they are holding scarce money that can’t be restored if stolen.

The blessing and curse of Bitcoin is that all transactions are irreversible, and it’s better to be on the side which uses the feature in a beneficial way for yourself when you become completely sovereign.

If you’re holding bitcoins on Coinbase right now, it’s better to move them to your own wallet while you still can do unrestricted withdrawals.

In the future, limits may be imposed by financial or political actors beyond your control.

And if you’re not managing your own private keys in a non-custodial wallet like a Ledger or a Trezor, then your coins aren’t really yours.

As they say, “Not your keys. Not your coins.”

Does Coinbase Protect Your Privacy?

One delicate topic in the Bitcoin space concerns KYC/AML practices.

Ideologically, most bitcoiners oppose such means of data collection.

However, there are also security reasons to avoid the collection of private data: once the picture of your national ID gets uploaded to a server, it contributes to the reinforcement of a honeypot for hackers.

As presented earlier in the article, Binance has had a big issue with a hacker who managed to download the data of hundreds of users and wanted to extort bitcoins from the exchange.

In the case of Coinbase, you really have no choice but to provide the data.

But if your purpose is to buy some bitcoins and get out, then you can also delete your account and request the company to erase your records – which is a net positive for your privacy and sovereignty.

Furthermore, you should never expect a company to respect your financial privacy in relation to the government.

Legislative changes can happen at any time, and the jurisdiction under which Coinbase operates (the state of California or the Federal Government) can acquire any data at any moment.

This happens a lot in relation to the IRS: in November 2017, Coinbase was ordered to inform the taxman which users have accumulated more than $20.000 in annual transaction volume; within four months, the American exchange also had to send the IRS full personal information and transaction records of users who used the platform between 2013 and 2015.

If you care about financial privacy as a way of protecting yourself from the actions of a government (which once confiscated gold holdings), as well as the greed of people who might try to rob or hack you, then it’s better to be cautious with your digital footprint and the amount of personal data you put in honeypots like Coinbase.

It’s better to move your coins to your own wallet,run a full node , learn about managing UTXOs, and try mixing your BTC with applications such as Wasabi Wallet whenever you want to eliminate links to the sender and acquire some plausible deniability.

Bitcoin is not entirely private, but Coinbase is a financial panopticon which allows governments to track and surveil the kind of currency that they cannot control.

In a panopticon “a guard can see every cell and inmate but the inmates can’t see into the tower.” (source)

Speaking of tracking and surveillance, in 2019 Coinbase acquired blockchain analysis start-up Neutrino in order to better track transactions and associate the data with other individuals and entities.

The most concerning issue, outside of the Orwellian nature of Coinbase, is that Neutrino’s founders have connections with Hacking Team – a company which provided surveillancetechnology to authoritarian governments that infringe fundamental human rights.

This information reveals a lot about Coinbase’s consideration for liberal values and protection of individuals against state oppression.

The safest kind of data is the one that isn’t being processed by any kind of third party.

When it comes to Coinbase, it’s better to regard the platform as a necessary evil and a place that you enter and exit whenever you need.

However, it is not recommended to keep your coins on any exchange for reasons that concern your financial privacy and the security of your coins.

Whenever you are ready to move your bitcoins from Coinbase and enjoy the benefits of financial sovereignty, Billfodl is here to offer you a secure and sturdy way of keeping your private keys offline and away from the eyes of bad actors. Before you make up your mind, find out more about our products.

Conclusion

How you store your coins is a game of tradeoffs.

On the one hand, storing them yourself requires learning about key management (and that presents its own risks).

On the other hand, while it is easier to let Coinbase hold your coins, in many cases, this defeats the purpose of Bitcoin in the first place.

With our team of experts here at Privacy Pros and Billfodl guiding you, it is possible to keep your coins safe all on your own.

Coinbase Exchange Faq Log

Let us show you how…