Newb dabbling in crypto - looking for advice on Coinbase vs another wallet
Hi folks,
I just created an Coinbase account to receive (small amounts of) Bitcoin from another service. I would have looked into it more before doing so, but it was actually the only option, so I just dove in. However, from what I can tell, I don't necessarily need to keep anything in my Coinbase account, and if I ever plan on doing anything else (buying, selling, making payments) with crypto, I'm curious if Coinbase is the right place to do it.
I've only done the most basic of research. I know more about blockchain and ledgers than I do about wallets and exchanges, and that still isn't a lot.
So:
I need a Coinbase account to receive BTC, but I don't need to keep it there
I don't need to do anything with that BTC immediately - let's call it small amounts of play money, for now
Since BTC is down right now (in my view) I might consider buying a bit, or potentially other cryptocurrency(ies)
I like the diversification of holding a bit of crypto even though I don't totally trust the whole system nor its value
I travel and I can foresee potentially using crypto to make payments or withdraw cash as that pops up sometimes
Does it cost anything to move my BTC out of Coinbase? Are there better places to keep it that would make it worth it? Is Coinbase safe? Is it a terrible company? Would other places be safer, easier, harder? What am I not thinking of?
dhork @lemmy.world - 2w
Companies like Coinbase are more than just an exchange, they are your on-ramp and off-ramp for getting dollars (or whatever you use) into and out of the crypto space.
The reason why people don't recommend leaving crypto in an exchange account is that you are basically trusting that exchange with custody of your crypto assets. If they go under, then you have to get in line with a long list of creditors, and you will probably never see that money again. And yes exchanges do go under from time to time.
But Coinbase has been around for quite a while, and is strong. I think I have had an account there for over 10 years. And yes, in spite of all the warnings (and knowing how to store my own crypto) I still have a small stash of BTC there, just because I couldn't be bothered to move it, and BTC has gone up since I moved it there. (I also have a stash of ADA, but that has not fared as well.).
So if you decide to let Coinbase keep your crypto, and it fails, know that I am suffering right there along with you.
And storing your own crypto has its own issues, also. Best to learn how to keep it in a wallet that is totally offline, and learn how to keep it that way. If you lose your wallet (and any backup phrases you might have made), then your coins may be just as irretrievable as if the exchange went down -- but you will have only yourself to blame.
3
JohnnyCanuck @lemmy.ca - 2w
And storing your own crypto has its own issues, also.
I've seen some horror stories!
2
TragicNotCute - 2w
Generally the guidance is not to keep funds in an exchange any longer than needed. That’s what you should think of Coinbase as, so no, you shouldn’t keep coins in Coinbase long term. I’m not as deep into BTC, I only hold a little ETH, so my setup might be a little different to yours.
I’d recommend Metamask for a wallet. I think they just added BTC support as well. You will get a recovery phrase when you set up any wallet, make sure you keep it in a safe place, this phrase IS your money. If someone gets it, they have your money. Guard it.
Lemme address your other questions point by point:
I need a Coinbase account to receive BTC, but I don't need to keep it there
Nope. You don’t need Coinbase at all. Your wallet can send a receive directly. You need Coinbase to go back and forth between fiat currency (dollars or whatever).
Does it cost anything to move my BTC out of Coinbase?
Yes. All crypto transactions charge a fee. I don’t know if Coinbase charges on top of that, but probably a bit.
is Coinbase safe?
Eh, safe enough. They are publicly traded and US based so that should give you some comfort, but exchanges get hacked and fail, which is why even if they are the best company in the world, you shouldn’t let them hold on to your coins long term.
Hope this helps!
3
JohnnyCanuck @lemmy.ca - 2w
Thanks so much for your feedback. I'll look at setting up a separate wallet. The fact that I didn't have a passcode for my "wallet" in Coinbase is what made me start looking into what was going on, and whether it was a wallet or not. Thanks for the clarification.
I'll also test it out and see what I lose on the transaction.
You don’t need Coinbase at all. Your wallet can send a receive directly.
The service I'm receiving from specifically asks for a Coinbase account, not a wallet. I'm not sure why - maybe it's a deal with Coinbase, or it might be a Canadian regulations thing. They give way more options for U.S. users.
2
TragicNotCute - 2w
Sometimes Coinbase is integrated into the checkout flow for “pay with crypto”, but it shouldn’t be needed for most crypto transactions.
2
reallykindasorta @slrpnk.net - 2w
By default your btc is in a custodial wallet at coinbase where they control the passphase so you only have access through coinbase.
Coinbase has been around awhile and is pretty good at fraud protection so I wouldn’t be too worried, but I would personally transfer my balance to a non-custodial wallet occasionally for long term saving. If you want to be able to convert back to fiat currency quickly leaving it on coinbase might make sense.
If you transfer your btc to a noncustodial wallet (for ex. Coinbase Wallet or Blockchain.com wallet) it will prompt you to write down the address and passphrase. After that you can access your btc via ANY btc wallet by typing in the passphrase (you’re not tied to the wallet software you use to access it). This is why if someone gets your passphrase they have your btc too.
2
JohnnyCanuck @lemmy.ca - 2w
If you want to be able to convert back to fiat currency quickly leaving it on coinbase might make sense.
I see, cool. I think my goal right now is just to hold the crypto, but I like that clarity.
After that you can access your btc via ANY btc wallet by typing in the passphrase (you’re not tied to the wallet software you use to access it).
Oh that's interesting. It makes sense, but the concept never clicked like that for me. Thanks!
JohnnyCanuck in crypto
Newb dabbling in crypto - looking for advice on Coinbase vs another wallet
Hi folks,
I just created an Coinbase account to receive (small amounts of) Bitcoin from another service. I would have looked into it more before doing so, but it was actually the only option, so I just dove in. However, from what I can tell, I don't necessarily need to keep anything in my Coinbase account, and if I ever plan on doing anything else (buying, selling, making payments) with crypto, I'm curious if Coinbase is the right place to do it.
I've only done the most basic of research. I know more about blockchain and ledgers than I do about wallets and exchanges, and that still isn't a lot.
So:
Does it cost anything to move my BTC out of Coinbase? Are there better places to keep it that would make it worth it? Is Coinbase safe? Is it a terrible company? Would other places be safer, easier, harder? What am I not thinking of?
Companies like Coinbase are more than just an exchange, they are your on-ramp and off-ramp for getting dollars (or whatever you use) into and out of the crypto space.
The reason why people don't recommend leaving crypto in an exchange account is that you are basically trusting that exchange with custody of your crypto assets. If they go under, then you have to get in line with a long list of creditors, and you will probably never see that money again. And yes exchanges do go under from time to time.
But Coinbase has been around for quite a while, and is strong. I think I have had an account there for over 10 years. And yes, in spite of all the warnings (and knowing how to store my own crypto) I still have a small stash of BTC there, just because I couldn't be bothered to move it, and BTC has gone up since I moved it there. (I also have a stash of ADA, but that has not fared as well.).
So if you decide to let Coinbase keep your crypto, and it fails, know that I am suffering right there along with you.
And storing your own crypto has its own issues, also. Best to learn how to keep it in a wallet that is totally offline, and learn how to keep it that way. If you lose your wallet (and any backup phrases you might have made), then your coins may be just as irretrievable as if the exchange went down -- but you will have only yourself to blame.
I've seen some horror stories!
Generally the guidance is not to keep funds in an exchange any longer than needed. That’s what you should think of Coinbase as, so no, you shouldn’t keep coins in Coinbase long term. I’m not as deep into BTC, I only hold a little ETH, so my setup might be a little different to yours.
I’d recommend Metamask for a wallet. I think they just added BTC support as well. You will get a recovery phrase when you set up any wallet, make sure you keep it in a safe place, this phrase IS your money. If someone gets it, they have your money. Guard it.
Lemme address your other questions point by point:
Nope. You don’t need Coinbase at all. Your wallet can send a receive directly. You need Coinbase to go back and forth between fiat currency (dollars or whatever).
Yes. All crypto transactions charge a fee. I don’t know if Coinbase charges on top of that, but probably a bit.
Eh, safe enough. They are publicly traded and US based so that should give you some comfort, but exchanges get hacked and fail, which is why even if they are the best company in the world, you shouldn’t let them hold on to your coins long term.
Hope this helps!
Thanks so much for your feedback. I'll look at setting up a separate wallet. The fact that I didn't have a passcode for my "wallet" in Coinbase is what made me start looking into what was going on, and whether it was a wallet or not. Thanks for the clarification.
I'll also test it out and see what I lose on the transaction.
The service I'm receiving from specifically asks for a Coinbase account, not a wallet. I'm not sure why - maybe it's a deal with Coinbase, or it might be a Canadian regulations thing. They give way more options for U.S. users.
Sometimes Coinbase is integrated into the checkout flow for “pay with crypto”, but it shouldn’t be needed for most crypto transactions.
By default your btc is in a custodial wallet at coinbase where they control the passphase so you only have access through coinbase.
Coinbase has been around awhile and is pretty good at fraud protection so I wouldn’t be too worried, but I would personally transfer my balance to a non-custodial wallet occasionally for long term saving. If you want to be able to convert back to fiat currency quickly leaving it on coinbase might make sense.
If you transfer your btc to a noncustodial wallet (for ex. Coinbase Wallet or Blockchain.com wallet) it will prompt you to write down the address and passphrase. After that you can access your btc via ANY btc wallet by typing in the passphrase (you’re not tied to the wallet software you use to access it). This is why if someone gets your passphrase they have your btc too.
I see, cool. I think my goal right now is just to hold the crypto, but I like that clarity.
Oh that's interesting. It makes sense, but the concept never clicked like that for me. Thanks!