In this article, we’ll take a deep dive and compare Coinbase vs Coinbase Wallet and how they differ in terms of security, fees, insurance, and usability.
If you’re interested in crypto, it’s likely you have used or heard of Coinbase and Coinbase Wallet. While both products are from the same company, they serve different purposes and are not the same. Which leading to many people often confuse the two, leading to the question: “What is the difference between Coinbase and Coinbase Wallet?“.
So, if you’re wondering which Coinbase product is best for you, keep reading to find out.
What is Coinbase?
Coinbase.com is one of the largest centralized cryptocurrency exchanges, which was launched in the US in 2012 by Brian Armstrong and Fred Ehrsam. The popular exchange supports over 170 crypto assets and also supports fiat currencies such as the US dollar, GBP and Euro.
Coinbase offers many features for users, which includes buying/selling. Coinbase Earn where you can stake and earn interest on your crypto, and Coinbase Learning Rewards where users can earn free crypto for learning about tokens and projects and answering a few simple questions. One of its biggest selling points is its user interface, making it ideal for beginners getting into the crypto space. However, for more advanced traders, Coinbase offers Coinbase Advanced Trade, previously known as Coinanse Pro.
Coinbase also offers Coinbase Learn, allowing users to learn about cryptocurrencies, Coinbase’s services, NFTs, and more.
Coinbase also provides custodial storage, meaning that the platform holds your funds in a custodial form. The platform also uses the KYC (Know Your Customer) process for its custodial model, requiring users to verify their identity to use the exchange and its custodial storage. Although this means Coinbase holds your private keys, the platform is responsible for ensuring the safe storage of your sensitive information. However, users must still keep their passwords safe, protect their accounts with 2FA, and take security precautions.
If you plan to store funds for a long time, using a separate non-custodial wallet that you have control over may be better. Coinbase Wallet is a mobile application that allows users to store digital assets and take control of their own private keys. This provides users with total custody of their assets and puts them in the driver’s seat.
What is Coinbase Wallet?
Coinbase Wallet is a non-custodial wallet offered by Coinbase that allows users to store their private keys. As a non-custodial wallet, users have total control over their assets, but this also means that they are responsible for keeping their private keys secure. The wallet is entirely virtual, meaning it is a software wallet that can be accessed via a desktop or mobile app. The wallet’s smartphone app is available for Android and iOS devices, while desktop users can install the Coinbase Wallet browser extension on their Chrome browser for quick access.
Unlike Coinbase, which only supports around 170 assets, Coinbase Wallet supports thousands of cryptocurrencies, including ERC-20 tokens such as Tether and Shiba Inu. Bitcoin, Bitcoin Cash, Solana, Litecoin, and other popular cryptocurrencies are also supported. Additionally, Coinbase Wallet allows users to store non-fungible tokens (NFTs), including both ERC-721 and ERC-1155 tokens.
To ensure the security of users’ funds, Coinbase Wallet offers a four-digit security PIN that must be entered for all future logins, and two-factor authentication (2FA) is also available, which requires additional verification from a separate device or account such as email or text. The Coinbase Wallet interface is user-friendly and easy to navigate, making it suitable for all levels of crypto and technological experience.
While Coinbase Wallet is a secure option for private key storage, users should be aware of potential security vulnerabilities. As a software wallet, it requires an internet connection, which can make it vulnerable to remote attacks. Unlike hardware wallets that store private keys in cold storage on an offline device, software wallets keep private keys in a hot wallet, which is more susceptible to hacking attempts. However, this does not mean that software wallets are inherently unsafe, and Coinbase Wallet provides robust security measures to protect user funds.
One notable feature of Coinbase Wallet is that users can sign up without providing their email address, ensuring anonymity for those who prioritize privacy. Overall, Coinbase Wallet is a reliable and easy-to-use non-custodial wallet that offers support for a wide range of cryptocurrencies and NFTs while giving users complete control over their assets.
Coinbase Vs Coinbase Wallet
Coinbase is a centralized exchange where users can buy, sell, and trade cryptocurrencies, Coinbase Wallet on the other hand is a non-custodial software wallet that allows users to store their private keys and manage their crypto assets independently.
But which platform from Coinbase should you use? To help you decide, we have broken down the key features for both products to help you get a better understanding when comparing Coinbase vs Coinbase Wallet.
Coinbase:
- Coinbase is a centralized cryptocurrency exchange that allows users to buy, sell, and trade cryptocurrencies.
- It supports over 60 cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, among others.
- Coinbase charges fees for buying and selling cryptocurrencies, and these fees vary depending on the payment method used.
- Coinbase provides users with a custodial wallet, meaning that the exchange holds onto users’ private keys on their behalf.
- Coinbase is a regulated exchange and complies with various regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.
Coinbase Wallet:
- Coinbase Wallet is a non-custodial software wallet that allows users to store their private keys and manage their cryptocurrencies independently.
- It supports thousands of cryptocurrencies, including ERC-20 tokens and NFTs.
- Coinbase Wallet is entirely virtual, as it is a software wallet that can be accessed via desktop or mobile app.
- Coinbase Wallet charges no fees for using the wallet.
- Users are responsible for the safe storage of their assets as Coinbase Wallet is non-custodial.
- Coinbase Wallet offers various security features, including a four-digit security PIN and two-factor authentication.
- The Coinbase Wallet interface is straightforward and easy to use.
Do You Need a Coinbase Account to Use Coinbase Wallet?
If you’re interested in trying Coinbase Wallet but don’t want to use the Coinbase exchange, you may be wondering if you need to have a Coinbase account to use the wallet. The good news is that you do not need a Coinbase account to use Coinbase Wallet. Although they are both owned by the same company, they are separate services that can be used independently.
While Coinbase Wallet can be used without Coinbase.com, it is worth noting that Coinbase does connect to Coinbase Wallet for fund transfers. However, Coinbase.com also allows transfers to other wallets such as MetaMask, Trust Wallet, Exodus, and Ledger. Therefore, using Coinbase Wallet may not necessarily streamline your experience on Coinbase.com, but it is a secure option for storing your private keys.
Conclusion
Now we have learnt about Coinbase vs Coinbase Wallet, which one should you use?
Honestly, it’s difficult to say which Coinbase Product you should use over the other. It’s important to consider your needs and preferences. If you want to easily buy, sell, and trade cryptocurrencies and don’t mind paying fees, Coinbase might be the better option. However, if you prioritize your security and control of your crypto assets and want to store a wide variety of cryptocurrencies, Coinbase Wallet may be a more suitable choice.
However, both Coinbase and Coinbase Wallet work well in conjunction with each other, so you don’t necessarily need to pick one over the other as both products have their pros and cons.
