What are Coinbase Costs?
Coinbase Costs – Coinbase Inc. is a company based in the United States that trades in cryptocurrencies such as Bitcoin, Ethereum and Litecoin. Investing in these currencies is possible here, while they can also be exchanged into fiat currencies.
Furthermore, the marketplace is suitable for potential buyers of Altcoins, as a large number of cryptographic currencies can’t be exchanged for fiat currencies. Instead, they can be exchanged for a more substantial cryptocurrency.
Coinbase was founded in 2012 by Fred Ehrsam and Brian Armstrong. Both took part in a competition organized by Y Combinator, through which companies such as reddit and Airbnb have already been founded. Coinbase enjoys the reputation of being the first crypto company to reach a market capitalization of more than a billion US dollars.
Coinbase’s offering includes the Global Digital Asset Exchange, which acts as a professional trading platform. It also provides a trading platform for various cryptocurrencies for those with digital wallets.
The service is designed for everyday customers, while also offering a programming interface for developers. This allows for external programs to be connected to Coinbase. In order to finance the development of Coinbase, fees are also charged for its use. This blog entry is focused on the specifics of these Coinbase costs.
Coinbase costs – overview of prices and transaction costs
Basically, a credit balance must be available on the account for trading with Coinbase. In order to charge it, you can either make a SEPA transfer or use your credit card as means of payment. Credit card payments are generally considered to be the most convenient option, allowing for immediate purchase of cryptocurrency.
However, the fees have to be taken into account. For every €100 invested in Bitcoin, a further fee of €3.99 will have to be paid to Coinbase.
If you choose the conventional transfer payment method, no fees will be charged by Coinbase. However, you can expect a longer processing time and different exchange rates. Usually, a waiting period of five days can be expected. Therefore, it’s easily argued that the fees charged by Coinbase are worthwhile.
Not having to deal with long processing times is particularly handy, as the marketplace can change considerably in just a short period. Furthermore, it’s worth pointing out that a linked account also leads to a higher limit.
In addition, Coinbase charges transaction costs of 1.49 percent of the transaction value. Therefore, for a transaction of €100, €1.49 is then used for transaction costs. If money is transferred from Coinbase to your own account, a one-time fee of €0.15 will be charged to you.
Coinbase costs – what’s free at Coinbase?
The fee system at Coinbase is still quite new, with all services having been free of charge until March 2017. Previously, all blockchain transactions were free of charge, and fees were covered by Coinbase. This is only a protection mechanism, however, as cost-intensive processes are today borne by the traders.
However, some components at Coinbase remain free of charge. Wallets can be used without additional charges, for example. These wallets are specially developed to secure Bitcoin, Ethereum and Litecoin. Furthermore, there are no transaction costs for transactions between Coinbase users.
Therefore, Coinbase users can transfer tokens among each other, without having to fear additional fees. Last but not least, using the app is free of charge. This is particularly popular with investors, as it’s very intuitive and the functionality very refined. In addition, the app offers important information at a glance, and impresses with consistently good performance.
Why are there fees at Coinbase?
As mentioned earlier, Coinbase was founded in 2012. Since then, growth has become an important indicator of entrepreneurial success. Established companies such as Netflix and Amazon always put a focus on growth over profitability, for example.
In order to attract new venture capitalists, the founders of Coinbase have focused on increasing its number of users. However, this approach also led to rapidly rising costs, meaning a new approach was needed, in March 2017.
Customers were to pay for the transaction fees incurred independently, and at the same time finance the platform. This turnaround resulted in a valuation of 1.6 billion US dollars in August 2017. This gave Coinbase the enviable status of being the first crypto company to become a so-called unicorn.
According to the founders, it was growing market interest that led to this new approach to costs. Rapidly increasing numbers of users also led to a higher number of transactions occurring simultaneously. This resulted in significantly higher transaction costs, which eventually had to be transferred to the user.
One of the best-known functions of Coinbase was removed as a result of the conversion to fees in March 2017. This was the SMS service – a function that allowed the user to stay informed about service changes via SMS.
The cornerstone for this functionality was also laid in 2013, a year in which smartphones were not yet so widely used. This service has since been replaced by the app, which was able to create a broader user base of Coinbase costs.
How are Coinbase costs charged?
Finally, we’re going to look at the calculation of Coinbase costs. All costs are displayed alongside each other, including the purchase price of any currency. Thus, costs are kept very transparent and easily manageable.
For example n the Coinbase costs, a transaction of €100 does not lead to a purchase of currency worth €100. The fact that costs are deducted from this amount is made known to the user immediately. Ultimately, this procedure is commonplace and understood by even the casual investor with some experience of stock exchanges.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.