Coinbase is the most popular online trading platform for cryptocurrency (or crypto for short). It is fully insured, secure, and reliable. With user-friendly design along with both website and app-based platforms, it’s often the first and last stop for crypto buyers. But when you first head to Coinbase, you’re bound to be confused by the different products they offer.
Coinbase is the basic service for beginners who are only interested in carrying out cryptocurrency trades every so often. Coinbase Pro is for the serious crypto day trader looking to make routine moves without the constant hefty fees.
Keep reading for a more comprehensive unpacking of all the differences between Coinbase and Coinbase Pro, as well as additional helpful information you’ll need when making your successful cryptocurrency decisions.
So, Which One Should I Pick?
Admittedly, Coinbase, the company, does a poor job on its website trying to upsell you on Coinbase Pro. If you go into your local Nissan/Mercedes dealer looking for an Altima, the salesman will inevitably describe the superior features and accessories of the Mercedes on the lot. And you can certainly see the difference by looking at them.
Then there are the descriptions for Coinbase and Coinbase Pro. From the description of Coinbase on the homepage:
“Manage your portfolio: Buy and sell popular digital currencies, keep track of them in one place.”
Here is one of the not-so-different descriptions of Coinbase Pro from the Coinbase Pro introductory page:
“The most trusted platform for trading cryptocurrency: Coinbase Pro offers individuals the ability to trade a variety of digital assets on a secure, insurance backed platform.”
Sure sounds the same to me. But there is an operative word in that first quote: “popular”. And there in lies the first difference between the two services.
Variety in Available Trade Options
Perhaps you were fascinated by Bitcoin’s huge market surge recently. Or maybe your friend trades in ether. If you’re new to the world of cryptocurrency and just want to get your feet wet, standard Coinbase is where you want to go. It is:
- The company’s flagship service and app
- Easy to sign up
- Trades in all the most “popular” cryptocurrencies
But it doesn’t offer a huge variety of those transaction options.
Coinbase Pro does. If Bitcoin is yesterday’s news to you, and you’ve been looking for a trusted broker to help you make an investment in tomorrow’s crypto before its price also skyrockets, Coinbase Pro is where you will want to go. Odds are if you’ve heard of it, it’s there.
Coinbase is more User-Friendly
If you’re new to crypto or stock trading in general for that matter, you might find logging into Coinbase Pro right away to be visually overwhelming. You’ll see lines and lines of things like:
- Current trade values
If crypto is your career, you’ll love the wealth of information on Coinbase Pro.
But if you’re more of a hobbyist or explorer, Coinbase is more your scene. Its aesthetically appealing interface will make it easy for you to access the basic functions you need to get started.
Besides variety, Coinbase Pro really increases the power you have over transactions as well, specifically through the types of transactions you can make.
Market Buys/Sells vs Limit Buys/Sells
In Coinbase, you can only make market buys and sells. What does that mean? You can only make immediate transactions. Let’s put this in easy, real-world terms. Sally owns a bakery and sells chocolate chip cookies (Yes, I’m hungry right now so I wanted to pick an example with food.) How much do her cookies cost? Sure the price needs to factor in overhead and profit margins, but the main factor determining the value of the cookie is how much her customers are willing to pay.
In stocks and cryptocurrency, that value changes constantly, usually in small increments, throughout the day. The market decides that her cookie is currently worth $1. Frank walks in on a Thursday at 2pm and decides that yes, he is hungry, and will by one cookie right now. He hands Sally a dollar, and she hands him 1 cookie. That’s a market buy.
Limit buys and sells, only offered on Coinbase Pro, allow users much more freedom and power in their transactions. In a limit purchase, you can command Coinbase Pro to buy 3 Satoshis (the smallest unit of Bitcoin), for instance, only when their value drops to a certain amount. When or if the value hits that number, the transaction is processed.
Similarly, in a limit sale, you can command Coinbase Pro to sell 3000 Satoshis only when their value rises or falls to a certain value. The transaction will only occur when the value rises to an amount you’re happy with, or falls to the lowest amount you’re comfortable with.
Thinking about our cookie example (I’ll have lunch soon), Frank could set a limit buy if the bakery’s price ever hits 50 cents per cookie if he’s only willing to buy one when the value gets that low. Or, Sally could set a limit sell so that if the value of a cookie ever hits $2, she sells all of her cookies.
With limit transactions on Coinbase Pro, you don’t have to constantly wait for the value of a cryptocurrency to hit that magic number. You can set your limit and move on to other market research. When the limit is hit, Coinbase Pro takes care of the rest. But someone new to crypto might prefer to stick with regular Coinbase so that they can keep a close eye on fluctuations.
What would you like to exchange cryptocurrency with though? If you don’t mind buying with or selling for your home country’s fiat (standard government money) Coinbase is perfectly fine for you.
But Coinbase Pro allows lots of other trading pair options. If you’re an American getting ready to go to Europe on vacation, why not sell some Satoshis for Euros before you go? Pro currently allows you to switch between the American dollar, Euro, and British Pound.
How you get paper money to and from your crypto wallet matters too; most merchants won’t let you pay in Bitcoin. Regular Coinbase allows you to link your bank account as well as debit and credit cards. Coinbase Pro does not allow debit and credit cards, probably to ensure validity of the increased transactional volume.
Is Coinbase Pro Free to Use?
|Buying and Selling Amount Per Transaction in USD
|$10 and below
|$204.01 and above
|With credit/debit card or PayPal above $78.06
No but it is much lower in cost. Like most financial brokers, regular Coinbase certainly is not. Coinbase first hits with a surcharge above the current trading price of the currency you are buying. That varies between 0.25%-1.5% depending on the currency. Then they add buying fees on top of that. Here is that fee breakdown:
No big deal once in a while. But if you’re doing these cryptocurrency trades every day, that adds up and, not to mention, gets complicated. Pro is much cheaper to use. When buying, you’re still paying a very low taker fee of usually .5% (under $10 million).
But don’t forget, you can’t use debit, credit, or PayPal. You can, however, use Limit and Stop orders, options not available on Coinbase. And market orders execute at current price without an extra premium. That can save you money and also time when entering and exiting positions. For example, if you bought bitcoin at $5,000, and you know your target to sell is $10,000, you can enter a Limit sell order with price entered of $10,000. Then just forget about. With bitcoin trading 24/7/365, it’s easy to miss sudden rises and drops.
Using Limit order and Stop orders can get you in at the price you want, sell at the price you wish to sell for, and will allow you to not check charts all day or miss sudden moves while sleeping or just having a life. Most of us know bitcoin can surge and then drop 10-15% in an hour or two. I once watched it drop 40% in 4 hours and then bounce above the original price 2 hours later. Had I entered a few Limit purchase orders for 20% or 30% lower than current price, I would have made a large percentage gain within 6 hours.
Is Coinbase Safe to Use?
Yes. If you don’t trust Coinbase, it’s probably because you don’t trust cryptocurrency in general. But if you’re ready to start making trades, this is where you want to be. Amazon is where you start to buy something online. Coinbase is where you start to buy crypto. That status doesn’t just happen: Coinbase has a ton of ways to make sure your wallet stays secure on all of its products, not just regular Coinbase and Coinbase Pro:
Sometimes you need to tell yourself no. Vault Protection prevents our gambling tendencies by preventing all your funds from being released at once. Use this tool to create time delayed withdrawals.
98% of digital assets are stored offline, a lot safer from hackers. From Security for Your Peace of Mind:
“We distribute bitcoin geographically in safe deposit boxes and vaults around the world. Sensitive data that would normally reside on our servers is disconnected entirely from the internet. Data is then split with redundancy, AES-256 encrypted, and copied to FIPS-140 USB drives and paper backups. Drives and paper backups are distributed geographically in safe deposit boxes and vaults around the world.”
Additionally, all communication and traffic is completely encrypted.
It probably annoys us all, but 2-step verification is hand-down a reliable way of keeping something as important as your money secure. Coinbase is no different.
Your Money Is Insured
In the extremely low likelihood that something bad happens to Coinbase, your money is insured, both fiat and crypto. From How is Coinbase Insured?:
“Cash balances held in your Coinbase accounts belong to you – not Coinbase. If you are a United States resident, your Coinbase USD Wallet is covered by FDIC insurance, up to a maximum of $250,000.”
Finally, Coinbase follows financial industry best practices for its employees, such as:
- Background checks
- Encrypted hard drives
- Strong passwords
- Screen locking
Cryptocurrency Is Legal Though, Right?
In most countries, yes. World governments have followed the same pattern with cryptocurrency as most technological innovations that fundamentally change people’s lives:
- Apprehension and misunderstanding
- Understanding and debate
- Proper and fair regulation
All crypto does is streamline our daily financial transactions into a virtual system that makes more sense for the modern world than fiat. As countries learn that and develop guiderail regulations for it, we’ll eventually all get on the same page. In the meantime, here is a breakdown on the legality of cryptocurrency in each country. Check the map before you trade.
Coinbase’s Other Products
There is a lot more to Coinbase than the regular exchange and Coinbase Pro. If those two are not quite what you are looking for, here are a few of the other products the company offers:
Coinbase Prime takes it another step further from Pro. Prime is designed for large companies and institutions with missions centered around cryptocurrency making very large, routine transactions. This comes with Dedicated Institutional Coverage.
Coinbase isn’t passive in the cryptocurrency marketplace. The Ventures arm of the company is always looking for investment opportunities in crypto based start-ups.
Coinbase Wallet is a wallet for all of your digital assets including crypto and fiat, but not limited to them. Any other digital collectible can be stored here, and it’s an app that can function independently of the exchanges.
Are Bitcoin and Dogecoin sounding a little too volatile for you? You can always try USD Coin, which basically is as it sounds: it’s a cryptocurrency tied to the US Dollar. One USD Coin is always worth exactly $1. It’s thus considered the most stable crypto, just like the dollar is in world markets. Holding these coins earns you rewards from Coinbase.
If you take Coinbase’s online classes in new and exciting cryptocurrencies, they’ll actually pay you in that currency! It might be a good idea to actually check on the values of those currencies first before you get too involved. And you may want to learn how to send your cryptocurrencies to a hardware wallet or other external wallet for long-term storage if you aren’t trading frequently.
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Which Cryptocurrencies Can I Buy on Coinbase?
Ultimately, which cryptocurrencies you decide to buy and sell are up to you. Here is a quick rundown of some of the most commonly traded cryptos on Coinbase:
Let’s be honest: Bitcoin is probably the reason you came to Coinbase in the first place. Bitcoin is the original and most famous of all the cryptocurrencies. Without getting too complicated, bitcoins are found by an extremely long and tedious “mining” process. Since hardly anybody actually does this, there are a near finite number of bitcoins in circulation. Therefore, as long as they are in demand, they can only go up in value. Think of them as the gold of crypto.
The last time I checked (in March of 2020), Bitcoin was trading for roughly $8,500 on Coinbase, so your average Joe isn’t exactly buying a handful of them. It’s become clear over the past decade that there needs to be alternatives to Bitcoin, starting with units available for sale. The smallest unit, the Satoshi (named after Bitcoin creator Satoshi Nakamoto) is worth .00000001 Bitcoin. So as of this writing, one Satoshi is worth a much more maneuverable .0085 cents.
Bitcoin Cash was created as somewhat of a redo of Bitcoin: it keeps the same overall concepts and structure, but with a whole new blockchain and is considered a separately traded cryptocurrency. In March 2020, Bitcoin cash was worth a much more attainable $330.
If you’ve used Ethereum, the open source, blockchain-based operating system and earned Ether for your troubles, you can sell it on Coinbase. If not, don’t worry about this one.
Created to be a quicker payment system than bitcoin, litecoin has often been referred to a silver to bitcoin being gold. Limited to 84 million coins, 4 time the bitcoin limit, it has gotten less press than the other large market cap coins as of late. We have more on litecoin in this article.
If You’re Still Not Liking Coinbase, You Still Have Options
Coinbase has been providing a great service to cryptocurrency enthusiasts for the better of a decade now and is well-known and trusted in the community. However, it’s certainly not the only exchange out there. If none of Coinbase’s products are working for you and your needs, don’t give up on crypto entirely. Give one of these other exchanges a try. Well, maybe just the first two:
In terms of trading volume and market share, Binance is the largest crypto exchange in the world. But does larger mean better? Not always. And although it is heavily used, their website isn’t nearly as forthcoming about its security features as Coinbase.
Kraken isn’t nearly as large in market share as Coinbase and Binance, but it is based in the US, and the user-interface is pretty easy and stylistically pleasing. They also offer conversions to the Japanese Yen and the Canadian Dollar. Kraken provides cryptocurrency price information to the Bloomberg Terminal as well, which helps lend it an additional air of legitimacy.
Upbit is based in South Korea and definitely keeps that perspective: the website is in Korean, although you can use Upbit Global for English translations. If Korean is your first language, you’ll find it easy and intuitive. But security is a major concern. They may bill themselves as the “most trusted” but losing $49 million worth of Ether in a hack in 2019 kind of says otherwise.
Yeah, let’s not and say we did. Based in Hong Kong, Bitfinex is peer-to-peer and primarily for Bitcoin exchanges. It’s not safe though: Bitfinex has been hacked multiple times since its founding eight years ago, causing it to struggle just to maintain its banking relationships.