Anna KeyThu, Feb 17, 2022 6:05 PM
Coinbase Wallet Review: Features, Pros & Cons, Main Rivals
Before we elaborate more on what makes Coinbase Wallet so popular among crypto holders, one must know how to differentiate between Coinbase and Coinbase Wallet.
Coinbase is an online cryptocurrency exchange platform that allows users to trade, buy, or sell cryptocurrencies whereas Coinbase Wallet, launched in 2012, is a self-custody digital Wallet that users can utilize to safely store cryptocurrency; it is known to be one of the most secure cryptocurrency wallets for all to use to store their wealth and assets such as your private keys and recently even NFTs, for investors to crypto-enthusiasts, due to Coinbase Wallet’s collaboration and affiliation with Coinbase. Users are unable to purchase cryptocurrencies via Coinbase Wallet.
Coinbase Wallet is easily accessible via all kinds of devices, including computer browser, phone, or through the Coinbase Wallet App.
Let’s take a quick look at some of the Coinbase Wallet technical parameters.
Coins Accepted: BTC, ETH, XRP, DOGE, and all ERC-20 tokens
Countries Supported: 100+ countries
Language: English, German, Spanish, Chinese, French, Italian, Polish, Portuguese, Russian, Turkish, Thai
Fee: 1.49% – 3.99%
Native Token: No
Compatibility With Hardware Wallet: No
Linked Exchange: Yes
Coinbase Account Required: No
Coinbase Wallet Key Features
– Coinbase Wallet manages private keys and public keys to offer robust secure storage services. The Wallet is backed up by The Secure Enclave feature created and launched by Coinbase. Moreover, biometric authentication is required for protecting cryptocurrencies stored in the Wallet. This feature implements a user-only restricted entry to the Wallet. If private keys happen to be lost, there’s an optional cloud backup feature as well.
— One of Coinbase Wallet’s primary features is the absence of third-party involvement. Coinbase Wallet allows holders to access their cryptocurrency Wallet on all devices regardless of their location. There is no need to install any intermediate extensions.
— Coinbase Wallet is compatible with hardware wallets, such as KeepKey, Ledger, and Trezor.
— It is possible to send and receive funds from centralized exchanges via the Wallet. Coinbase Wallet has full compatibility with various banks working with digital currencies, as well as major fiat currencies, such as USD.
— Coinbase Wallet developers have also implemented certain KYC rules (Know Your Customer) to help boost the security of the platform.
Coinbase Wallet Pros
Coinbase Wallet protects cryptocurrencies with the Secure Enclave feature that has been created and implemented by Coinbase and by also utilizing biometric authentication that enables a restricted user-only entry and also restrains access to crypto money.
The Wallet offers an excellent user experience, supporting over 130 major cryptocurrencies.
Moreover, Coinbase Wallet allows users to participate in airdrops, initial coin offerings, as well as collect NFTs, browse dApps, make purchases at shops that accept cryptocurrency, share cryptocurrencies with global users. Therefore, Coinbase Wallet keeps up to date with the latest innovative technologies and developments, constantly improving its work and efficiency.
Coinbase Wallet Cons
Some cons of the Coinbase Wallet is that it acquires status as a hot crypto wallet, which makes it prone to cyber threats and web-based crypto hacking. Storing most of the crypto coins online, Coinbase Wallet does not use cold storage services, “such as hardware wallets and an encrypted data device”, but despite this drawback, the Wallet is possessed with hefty protection.
Furthermore, another inconvenience to the Coinbase Wallet is its high compliance features which may prove frustrating for potential users with poor credit history, as certain KYC rules are implemented in adherence to their policies.
How to Create a Coinbase Wallet
There are three different types of wallets users are able to set up via Coinbase Wallet: hosted, self-custody, hardware.
Users with a hosted wallet are able to automatically store cryptocurrency on the wallet immediately after the purchase is made. Hosted wallets remain the most popular and are generally easy to set up. The name “hosted” comes from the fact that a third party keeps your crypto tokens for you.
- You won’t lose cryptocurrency stored in the Wallet in case the password is lost.
- Hosted wallets do not grant access to some of the key crypto features.
How to Set Up a Hosted Wallet
- Choose a platform. The platform should be secure, easy-to-use, and compliant with government & financial regulations;
- Create a new account. Fill in your account information and come up with a secure password. Coinbase wallet also recommends setting up 2-step verification for improved security.
- Buy or transfer crypto. Make your purchase using your bank account or credit card. It’s possible to transfer the crypto you already own onto your hosted wallet.
Self-custody (Non-custodial) Wallet
Unlike the hosted type, self-custody (non-custodial) wallets do not require a third-party (“custodian”) in order to provide safekeeping for your crypto. Self-custody wallets provide all necessary software, however, the responsibility of remembering and safeguarding the password (“private key”, “seed phrase”) falls entirely on the user. If the password is lost, it is impossible to recover it, nor is it possible to access crypto stored on the wallet. Non-custodial wallets are good for advanced crypto activities, such as yield farming, staking, etc.
How to Set Up a Self-custody (Non-custodial) Wallet
- Install a wallet app.
- Create a new account. You will not have to share any personal information. Be sure to remember your password and keep it in a secure location.
- Transfer crypto to your wallet. Please note that the Coinbase app is a hosted wallet. If you wish to open a non-custodial wallet, you will have to download the Coinbase Wallet app.
A self-custody wallet is required for buying NFTs. The purchase is only possible with ETH.
Hardware wallets are wallets that have a physical form. Hardware wallets store private keys offline, thus protecting your crypto wallet from being hacked. However, hardware wallets are costly (prices go up more than $100) and less convenient compared to the easy-access types of wallets.
How to Set Up a Hardware Wallet
- Purchase the hardware, such as Ledger, Trezor, KeepKey.
- Install the software. Make sure to only follow the instructions provided by the official website of the hardware you have purchased.
- Transfer crypto to your wallet.
The choice of which wallet (hosted, non-custodial, hardware) to use depends on your final goal and the purpose of your crypto purchase. Each wallet has its own pros and cons.
To sum it up, a hosted wallet is easy-to-use but does not give you access to advanced settings.
It also requires a third party to safeguard your crypto. Non-custodial (Self-custody) wallets are good not only for storing crypto but also for purchasing NFTs. This type of wallet gives you full control over your crypto, does not require any personal information, but the responsibility of safekeeping your wallet lies entirely on you.
Once the password is lost, it cannot be retrieved. A hardware wallet, despite giving users protection from being hacked, requires extra steps, such as purchasing a costly physician device. Do not forget that it is possible to have multiple types of wallets at once.
Coinbase Wallet Vs Popular Wallets
Coinbase Wallet vs MetaMask
Metamask is a crypto wallet launched in 2016. Originally a desktop extension, MetaMask is now a full-custody wallet, available on all kinds of mobile devices. MetaMask supports Ethereum, Binance Smart Chain, Avalanche, Polygon and other major blockchains.
MetaMask uses a “hot wallet’, but, unlike Coinbase Wallet, it does integrate with hardware wallets for boosted security. However, MetaMask’s security level is medium, compared to Coinbase Wallet. Through MetaMask users can also purchase and store NFTs. MetaMask charges 0.875% of the transaction value, whereas Coinbase Wallet has a 1.49% to 3.99% transaction fee. Both wallets are free to use.
Coinbase Wallet vs Trust Wallet
Trust Wallet is Binance’s official crypto wallet. Just like Coinbase Wallet, Trust Wallet is non-custodial and offers good customer support. Trust Wallet is integrated with Uniswap and PancakeSwap and supports both ERC-20 and non-ERC-20 tokens. Trust Wallet also allows users to earn interest through staking. Unlike Coinbase Wallet, Trust Wallet does not charge any additional fees, but the platform lacks desktop support.
Both Coinbase Wallet and Trust Wallet have similar features. Trust Wallet does not require connection to a crypto exchange in order to buy or add crypto, while Coinbase Wallet does not offer such an option. Users can easily swap and exchange their tokens as well as connect with DeFi apps and collect NFTs with the help of Trust Wallet.
Coinbase Wallet vs Exodus
Exodus is a digital crypto wallet, best used for small daily purchases. Exodus supports multiple cryptocurrencies and offers a built-in decentralized exchange.
One huge benefit that most users point out is Exodus’s simple and beginner-friendly interface.
Exodus requires no registration and verification. Exodus allows users to backup their funds by using seed phrases. It also keeps encrypted private keys and other sensitive information on the user’s computer. Third parties, including Exodus employees, do not have access to your personal data.
Unlike Coinbase Wallet, Exodus gives users the ability to have full control over their assets and earn rewards for staking.
Exodus has relatively high fees, even higher than Coinbase Wallet. The platform’s commission is dynamic and depends on the currency. The fee fluctuates between 5-10% of the exchanged amount and cannot be set manually. Moreover, the platform does not allow fiat currency withdrawals.
In order to use Exodus, users must purchase cryptocurrency beforehand. This is why most make their initial fiat-to-crypto trades on platforms like Coinbase and then move on to Exodus. However, it is the question of your comfort zone and convenience.
Coinbase Wallet vs Ledger
Coinbase Wallet is an online wallet that the user will be required to log in in order to make transactions whereas the Ledger Nano X is a “cold storage”, a piece of hardware that is up to the user to physically store their funds safely. They are both similar in that they store cryptocurrency but different in the methods as to how the user is required to interact with their crypto wealth.
For Coinbase Wallet and any other online wallet, there is always a risk with hacking with its safety being up to its company. The cold wallet is only as safe as the user wants it; the responsibility is on the user, making sure it is not prone to theft or malware.
Both of these methods may prove finished if their respective keys become leaked or copies are made. Due to these services’ nature, the general principle would be to keep your crypto inside an online wallet such as Coinbase Wallet, if you are interested in continually making crypto purchases or sells, or in a cold wallet such as Ledger if you are looking to hold on to your crypto wealth for the long run.
Coinbase Wallet is a popular decentralized crypto wallet, accessible from all kinds of devices. The wallet allows users to store, send and receive Bitcoin, Ethereum, Dogecoin, XRP, Stellar Lumens, and a plethora of other ERC20 tokens.
Coinbase Wallet offers three kinds of wallets: Hosted, Non-custodial and Hardware. This makes it easier for users to choose between the features they would like to have or own multiple different wallets at the same time.
Despite being a “hot wallet'', Coinbase is trustworthy, as it is protected by the Secure Enclave feature. The Wallet has implemented various methods of authentication measures, such as 2FA, SMS authentication, Google Authentication. The Wallet also requires a four-digit security PIN in order to grant access to the app.
Coinbase Wallet is a safe and secure wallet, making sure user security remains its top priority. So far Coinbase Wallet holds a zero hacking record.
Coinbase Wallet is developed and run by a group of professional crypto veterans, which makes the platform even more popular among other similar services. Coinbase Wallet does have a few drawbacks, such as high transaction fees and a more complex interface, but it does have a good market reputation, making it an easy pick for crypto enthusiasts from around the world.
Coinbase Wallet is well-tested and is recommended to use for both crypto newbies and professionals.
How to withdraw money from Coinbase Wallet?
Find out how to withdraw money from your Coinbase Wallet by following this link, where Coinbase Wallet experts explain how to cash out your fund(s).
Is Coinbase Wallet expensive?
Coinbase Wallet charges a 1.49% – 3.99% transaction fee; rates may be higher or lower depending on market fluctuations.
Why are Coinbase Wallet fees so high?
The main reason for Coinbase Wallet fees being higher than the average is supply and demand. Rates may fluctuate depending on the market.
How to transfer money from Coinbase to a bank account?
Find out how to withdraw money from your Coinbase Wallet by following this link, where Coinbase Wallet experts explain how to sell cryptocurrency for cash.
How long do Coinbase withdrawals take?
Local currencies stored within Coinbase are processed instantly. International withdrawals take up to 1-3 days.
Find out more about withdrawals here.
How much can you withdraw from Coinbase daily?
Withdrawal limits are determined by the algorithm, which takes a few key factors, such as account age, location, transaction history, into consideration before indicating the limit amount.