Coinbase Review 2017: Is Coinbase Safe to Link Bank Account?
Coinbase serves as one of the user-friendliest digital asset exchanges in the market. It offers many advantages for its users, especially those who are new to the world of cryptocurrency. Recently, Coinbase has received endless complaints from its users. Some of us have doubt if it is still the best platform to get bitcoin and if it is still safe to link bank accounts to it. Read this Coinbase review 2017 and find out more.
Coinbase Review 2017
Coinbase is most common and one of the first exchanges. It is frequently used by most of the newcomers to Bitcoin network because of the following advantages.
#1 Insured wallet & exchange
All digital currency that Coinbase holds online is fully insured. Coinbase is insured against theft and hacking in an amount that exceeds the average value of bitcoin we hold in online storage at any given time.
This means that if Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result. This includes losses due to breaches in physical or cyber security, accidental loss, and employee theft.
It is noted that the insurance doesn’t cover bitcoin lost or stolen as a result of an individual user’s negligence to main secure control over their login credentials.
Coinbase’s online wallets are being insured through Aon, one of the world’s largest insurance brokers, to further protect its users’ bitcoin funds.
How about Fiat Currency?
Coinbase stores all customer fiat currency (government-issued currency) in segregated, custodial bank accounts. The funds held in those accounts belong to Coinbase’s customers – not to Coinbase. If you are a United States resident, your Coinbase USD Wallet is covered by FDIC insurance, up to a maximum of $250,000.
#2 Coinbase’s vault
A vault can receive funds like a normal wallet, but can also prevent stored funds from being immediately withdrawn by adding optional security steps.
With the vault, you get a 48 withdrawal period (so nobody can move funds out of your account for 48 hours) and multiple signers on a withdrawal.
Users can also choose to split ownership between multiple users and email accounts, requiring these users to approve of a transaction before it can be completed.
#3 90% of bitcoin stored offline
Offline storage provides an important security measure against theft or loss of bitcoins. Coinbase stores approximately 90% of funds offline or cold storage. As deposits continue to grow it may be possible to store 95% or even 99% of funds offline.
This is brilliant measure as any computer that is connected to the internet with money on it (or bitcoins) is a target for hackers. Coinbase has gone extra miles in designing their infrastructure by eliminating single points of failure.
Data is 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.” In short, in order for your personal information to be compromised, those physical locations would have to be robbed by experienced hackers, which is unlikely.
Coinbase early on made a decision to store the vast majority (98%+) of customer bitcoin entirely offline, in safe deposit boxes.
What Coinbase actually store on the USB drives is a number of pre-generated bitcoin addresses along with their private keys.
Keys are generated offline in a secure environment and split using Shamir’s secret sharing. Each private key is divided into parts, and some subset of the pieces are required to restore the secret. This way some pieces can be lost and the secret is still recoverable (redundancy). It also requires a quorum of key-holders to come together to restore a key (consensus).
#4 Availability in 30+ countries
Coinbase also supports the following European countries:
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland.
#5 Coinbase added new customer support phone line
If you log on to Better Business Bureau, Coinbase has received a total of 430 customer complaints, mostly on their customer service. Many of them focused on that same point of contention: the user complained via email, but didn’t hear back from Coinbase for days or weeks.
On 20th September 2017, Coinbase announced a new customer support phone line to help users facing issues with the cryptocurrency platform. After increasing more staff handling their clients, things have gone better with shorter delays.
Tips: Official Coinbase support agents available Mon-Fri 8a-5p PST at +1 (888) 908-7930
Coinbase aims to have over 200 customer support staffers by October 2017 and their system has slowly been improved over time. After all, we could see Coinbase do value their customers and try to make all of us happy and continue to trade with them.
#6 The user-friendliest platform to get BTC, ETH, and LTC
Coinbase receives so many recommendations owing to the fact that large investments were made to guarantee an impeccable user interface (UI) and experience (UX). Everything works right out of the box on all devices. There is even a smartphone app for Android and iOS.
It is possible to link a credit card, called Shift Card, to your account and then pay for daily purchases using your Coinbase balance. The system simply converts the coins into USD at the going rate at the time of purchase. This feature is not yet available outside of the United States.
Is Coinbase Safe to Link Bank Account?
One of the concerns that most people have is if it is safe to link your bank account to Coinbase.
Account numbers and routing numbers are stored using bank-level AES-256 encryption on Coinbase’s servers. In addition, all traffic goes over SSL to prevent third parties from eavesdropping on your connection. Employee access is heavily restricted and they require background checks on all employees.
For those who reside in the US, you can verify your account in just a few minutes by entering your bank credentials. These banking credentials are never sent to Coinbase but are shared with an integrated, trusted third-party, Plaid Technologies, Inc., to facilitate instant account verification.