Cryptocurrency has been a very interesting space and as every day passes the industry is becoming more mature and is adding more and more features. But what still concerns a lot of people is the security aspect of the industry. It scares a lot of people that their hard-earned monies could just vanish one day if some hacker or any malicious character just gets smarter than the exchange one day.
This is where Coinbase as a company and as an exchange has stood out amongst the industry that is full of exchanges. This repute of not being hacked even once in its lifetime has made a lot of people believe in the brand, the exchange and ultimately the industry. Today Coinbase is the most commonly recognized brands when someone speaks about cryptocurrency exchanges and its not just about security anymore it’s also because the exchange has been active and is incorporating changes and features which is apt to the requirement of every type of its customers.
To give the best trading environment to both novice and experienced traders, Coinbase aptly created to exchanges giving the best of the tool each category of trader requires. While Coinbase introduces the inexperienced trader to cryptocurrency and basics of trading, Coinbase Pro (formerly known as GDAX) gives every ammunition that an experienced trader requires to fire these trading shots. There are various other features that differ even after both exchanges come under the same Coinbase umbrella.
What is Coinbase Platform
Coinbase is the user-friendly version of the popular trading platform. It allows users and traders to easily sign up, connect a bank account, credit or debit card and buy cryptocurrency without having to learn about market orders, limit orders, spreads, or any of that. Following is the interface for Coinbase base platform.
What is Coinbase Pro?
Coinbase Pro is a professional cryptocurrency trading platform that is basically Coinbase’s old trading platform, GDAX, with a new user interface. With Coinbase Pro traders can buy the same cryptocurrencies as they can on Coinbase, but that’s where the similarities end. The additional features that are available on Coinbase Pro but not Coinbase are-
- Trade from crypto to crypto
- Can place market, limit, and stop orders
- More powerful charts to analyze short-term trends (depth chart, order book, volume, etc)
- Lower fees and even possible to have a zero-fee transaction with the right order type
Even while targeting a separate group of traders, these two cryptocurrency trading platforms ultimately fulfill the same, the exact same things: an individual start with fiat currency and ends up having his hands in cryptocurrency. The ease of use, fees, and sophistication are where these two differ significantly. After reading this article the users will have a strong understanding of the differences and similarities between Coinbase and Coinbase Pro in the following categories:
- Available Cryptocurrencies / Trading Pairs
- Ease of Use
- Trading Power and Speed
Available Cryptocurrencies / Trading Pairs
Both exchanges lie head to head here as both sets of users get to deal with nearly the same set of cryptocurrencies. After the announcement of ERC 20 tokens support, there are been a couple of coins which are available on Coinbase Pro and not Coinbase. Also, there is a lot of differentiation based on geography. Following are the currencies that are available for purchase from fiat are on both platforms are:
Ease of Use
Coinbase’s, as a company, the ethos has always been to provide Ease of Use to its customers.
Coinbase: The UI of their Coinbase platform is a simple, straightforward way for people to buy the most popular cryptocurrencies without having to learn the tools of professional day traders. Coinbase also has a great smartphone app for its base version. With it a trader can do everything that he or so will need which includes buying, selling, sending receiving, checking wallet balances and live market prices.
Coinbase Pro: Coinbase Pro, on the other hand, is more tricky to use than the regular Coinbase platform but is still user-friendly compared to other advanced trading platforms. Overall the user-interface is really well designed, with easy navigation between USD, EUR, and GBP, as well as easy navigation to each cryptocurrency that one can trade: Bitcoin, Ethereum, Ethereum Classic, Litecoin, and Bitcoin Cash and other tokens.
Coinbase: Coinbase charges a spread of about one-half of one percent (0.50%) for Digital Currency Purchases and Digital Currency Sales. However, the actual spread may be higher or lower due to market fluctuations in the price of digital currencies on Coinbase Pro between the time we quote a price and the time when the order executes.
Coinbase charges a fee (in addition to the Spread), which is the greater of (a) a flat fee or (b) a variable percentage fee determined by region, product feature and payment type. The flat fees are set forth below:
- If the total transaction amount is less than or equal to $10, the fee is $0.99.
- If the total transaction amount is more than $10 but less than or equal to $25, the fee is $1.49.
- If the total transaction amount is more than $25 but less than or equal to $50, the fee is $1.99.
- If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99.
Coinbase Pro: Coinbase Pro uses a maker-taker fee model for determining its trading fees. Orders that provide liquidity (“maker orders”) are charged different fees than orders that take liquidity (“taker orders”).
When a trader places an order at the market price that gets filled immediately, these trades are referred to as a taker and will pay a fee between 0.05% and 0.25%. On the other hand, when a trader places an order which is not immediately matched by an existing order, that order is placed on the order book. If another customer places an order that matches with the trader, these trades are considered the maker and will pay a fee between 0.00% and 0.15%. The exchange has listed out a table with respect to the fees in respective pricing tiers which is as follows:
When it comes to security both exchanges follow a very similar protocol. If a trader plans to use an online wallet to store his cryptocurrency, Coinbase, on either platform, is probably the most bulletproof and secure way to do so. Coinbase platform offers 2FA so that the trader can add an extra layer of security to his account. Same is the case with Coinbase Pro which also offers 2FA to add an extra layer of security to the user’s operations.
While overall this looks good, the issue with Coinbase, however, is that the trader doesn’t actually own his private keys. They are completely reliant on Coinbase to make any transfers. Also, it’s commendable the Coinbase hasn’t been hacked, but there is no surety that it can never ever happen. Hence it is advisable to keep the cryptocurrency to cold storage.
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Coinbase: Coinbase is lightning fast from the moment the trader presses a buy to having the Bitcoin, Ethereum etc. in their account. However, there are two caveats with the speed of Coinbase:
- Bank account transfer time
- Withdrawals/sending cryptocurrency
Coinbase Pro: Just like its base platform, Coinbase Pro is identical when it comes to the speed. It can take a bit of extra time to send crypto off the platform, but if the trader is sending to another address on Coinbase it’s lightning-fast and free.
Both exchanges provide a seamless experience to crypto traders, it’s only the level of difficulty that makes a major differentiator between the two thus fulfilling the vision of Coinbase. Like Brian, Armstrong puts in his blog
“Ultimately we want to support a broader range of digital assets, and to do so we’ll give our customers tools, ratings, and reviews to help them make informed decisions. Our goal is to maintain the trusted experience our customers have come to expect while adding the assets our customers have come to demand.”
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.