If you are considering investing in Crypto from Ireland, one of the most common places people start buying and selling popular cryptocurrencies such as Bitcoin, Ethereum, Cardano and Solana is on Coinbase.
It is one of the on-ramps between the traditional finance world and the new parallel crypto world. Coinbase is the worlds second largest centralised crypto exchange with over 73m users and €286m quarterly volume traded.
In this blog post, we will review Coinbase with a particular view to assessing whether it is a good option or not for people in Ireland.
HIGHLIGHTS AND LOWLIGHTS
|Easy to use for beginners
|Smaller choice of Altcoins
|KYC – Complies with AML legislation
|Coinbase fees are expensive (Coinbase Pro cheaper)
|Accepts SEPA transfers – Deposit/Withdrawal
|You don’t control your private keys – Custodial wallet
|Publicly listed company
|Limited features compared to exchanges like Binance
|Low minimum deposit
|Limited earning options
|Strong security measures/ good security record
If you are looking for an easy way to get involved in cryptocurrency in Ireland, then Coinbase may be one of the best places to start. The user experience is very basic and suited to crypto newbies. Here is a quick overview of some important info and features to be aware of.
Crypto projects have to go through a rigorous process before they get listed on Coinbase, therefore Coinbase has a limited selection of Altcoins compared to some other exchanges. Coinbase has approximately 140 tradable assets, whereas exchanges such as Binance have over 500.
Coinbase does not list trading pairs such as BTC/ETH, BTC/USDT etc you will simply just be able to execute market order of BTC/EUR, ETH/EUR. For more advanced trading options you can use their Coinbase Pro app which will allow you to use limit orders, stop losses and has many more trading pairs compared to Coinbase.
Coinbase is a Custodial wallet meaning that when you buy any cryptocurrency you do not have to worry about storing it. Coinbase will take custody of it and manage your private keys. For people who prefer to take custody of their own crypto Coinbase also offer their own separate Coinbase Wallet App that allows your to store your crypto on your own device.
Coinbase accepts SEPA transfers which means that all major Irish banks (even Revolut) will process deposits and withdrawals to and from Coinbase. You will be given a unique reference code that is matched with your account that must be included in the detail of your bank transfers. When you are first verifying your account it is recommend that your initial deposit be at least €50. Once the account is verified transfers can me made within minutes.
It is not only important to be able to buy and sell cryptocurrencies, you will also want to be able to earn interest/yield on your holdings where possible. It is possible to do this through Coinbase but currently only five proof of stake cryptos are supported (Cosmos, Tezoz, Ethereum 2, Algorand and Dai).
According to Trustpilot Coinbase has a rating of 1.6 out of 5 for its customer service. They have been criticised in the past that it is very difficult go get through to a customer agent and long delays in issues being resolved.
We will talk about some other important topics such as fees, security and regulations in more detail.
COINBASE AND COINBASE PRO FEES
The fees you pay when you are using Coinbase will be different depending on whether you are using Coinbase or Coinbase Pro. Lets now look at both in detail.
There are two ways that Coinbase earn money on crypto transactions there is a spread fee and a flat fee.
Spread: when you are buying crypto on Coinbase they will charge you a price that is a little more expensive than the market rate and when you are selling your crypto they will give you a price that is slightly below the market rate. This is known as the spread and it will vary between 0.5-2% depending on what crypto-asset you are trading.
Flat Fee: The fees on Coinbase are very expensive compared to other exchanges. Note that all amounts quoted in dollars are also the equivalent amounts in euros (e.g $1.49/€1.49). There are no FX conversion on these fees.
The fees on Coinbase Pro are much cheaper than the Coinbase App. Market makers and takers trading with under €10,000 will pay a 0.5% transaction fee.
We have compiled a comparison of the fees between Coinbase and Coinbase pro for many different transaction levels to see what savings you can make.
DOES COINBASE COMPLY WITH IRISH LAWS?
Cryptocurrency is still in its infancy and has not yet been regulated in most regions of the world including Ireland. Cryptocurrency exchanges have faced increased requirements to comply with Anti-money laundering legislation.
Coinbase are in compliance with AML and you will notice when you sign up to your account you will be required to provide a copy of a government issued ID to verify your account and start trading. Therefore there should never be any worry of Coinbase being switched off for Irish customers.
The Central Bank of Ireland will be keeping a list of registered Virtual Asset Service Providers (VASPs) operating in Ireland. We would expect Coinbase to be one of the first names on the list, especially as it has an office in Dublin.
Coinbase also faces the added scrutiny of it being a publicly listed company in the United States. This means that it faces regular public scrutiny from its shareholders and it has to publish information to the public on a quarterly basis.
COINBASE SECURITY FEATURES
Coinbase have a number of security features to help you keep your account safe.
The first step you should take is to enable two factor or multi factor authentication on your account – this can be done by using a TOTP authenticator such as Duo or the google authenticator app.
Another added level of security that people of often go for is purchasing a security key such as a ‘Yubico’ which are considered to be one of the highest precautions you can take.
Should your account be breached there are further security features you can enable such a whitelisting addresses. This feature allows users only allow withdrawals of crypto to a list of approved addresses. If you want to edit the list be adding or disabling an address then there will be a hold period before the changes are effective. This will give users time to notice that a breach has occurred.
Another security feature on Coinbase is their ‘Vault’. This is a place where you can store crypto long term sort of akin to a savings account. The Vault can have time delayed withdrawals, multiple approvers and also has the added benefit that it stores the crypto offline in cold storage wallets.
WHAT HAPPENS IF MY ACCOUNT GETS HACKED?
Coinbase has has a good history in terms of security but there have been instances where customers have been targeted. In early 2021, hackers successfully stole crypto from over 6,000 customers through a phishing campaign where customers emails and passwords were stolen.
There may be only certain instances that your crypto may be covered from a hacking. Coinbase has an insurance policy that protects a lot of if digital assets that they have in storage in the event there is a huge theft. This policy does not cover you if you are careless with your own passwords etc which leads to hackers gaining access to your account.
If your account is breached you should should customer support immediately to have your account locked.
CONCLUSION – is Coinbase good or not for Irish crypto investors?
Although quite expensive, Coinbase is a great place to start and learn for people who are new to crypto. They also have a Coinbase learn feature which you can earn crypto by watching videos and learning about the latest projects. Coinbase has plenty of great security features and has a good standing in Ireland as it is compliant with our latest Anti-money laundering legislation.