17 Coinbase Wallet Questions (Quick Answers!)

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Smartphone with Coinbase and stacks of crypto laying by it

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Coinbase is one of the most popular crypto exchanges with over 43 million users worldwide.

In addition to being an exchange, Coinbase offers a free crypto wallet leading to confusion with newer crypto investors wondering if Coinbase and Coinbase wallet are the same (which they are not, something I will discuss more below).

Is Coinbase wallet safe? How exactly do I access Coinbase wallet?

Let’s dig in and answer these and several other Coinbase wallet questions in the article below.

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In This Post:

1) Is Coinbase and Coinbase wallet the same?

Both wallets are for your digital currencies. However, Coinbase is more than just a wallet; it also provides an exchange service to trade between different cryptocurrencies. On the other hand, Coinbase Wallet is only a wallet application. It does not provide any trading services.

The key differences between the two is that;

Coinbase is a custodial wallet – meaning that when you send funds from your account to someone else’s address, those funds are kept securely in their bank accounts. It means that if something happens to the private keys associated with your Coinbase account (for example, if you lose them), then all of your funds are lost forever.

On the other hand, the Coinbase wallet is non-custodial – meaning that your funds remain entirely under your control at all times. If you lose your private keys, nothing stops you from recovering your funds.

Coinbase wallet as a self-custody wallet means that if you want to use the Coinbase wallet as a self-custody solution, you need to download the Coinbase mobile apps. Once installed, you can sign in to your Coinbase account using the mobile app. Your assets are stored within your Coinbase account.

If you want to store your coins offline, consider using Electrum.

Now let us compare the features of these two applications;

Coinbase has been around since 2012. They offer a wide range of services, including;

  • Exchange
  • Wallet
  • Marketplace
  • Forums

Coinbase wallet offers the following features;

  • Send/receive money
  • View balances
  • Create addresses
  • Manage multiple wallets
  • Add custom tokens
  • Track transactions

There are many more features available in the Coinbase wallet, but these are the ones that are used most often by our customers.

Related: Increasing Coinbase Limits (Complete Guide)

2) How do I access my Coinbase wallet?

To access your Coinbase wallet, open the Coinbase app on your smartphone or tablet. Then click on ‘Sign Up’ or log in to your existing account.

Once logged in, you will view your current balance, create new addresses and add custom tokens.

You can also withdraw your funds directly from the Coinbase app using your debit card.

It is vital to note that you have to gain access to your crypto address before making any withdrawals. To do this, you must first log into your Coinbase account using your email address and password.

After logging in, you are presented with a Q.R. code. Scan this code using your smartphone camera and enter the amount you wish to withdraw. You will then receive an SMS confirmation message which contains your withdrawal request number.

Your funds will now be deposited into your linked bank account.

3) Is Coinbase wallet legit and safe?

Yes. Coinbase wallet is completely legitimate and secure. It is regulated by the U.S. government and operates within Know Your Customer regulations.

In addition, Coinbase wallet uses multi-signature technology to ensure that your money remains 100% protected.

4) Is Coinbase wallet safer than Coinbase?

No. Coinbase wallet is not safer than Coinbase. They are both equally unsafe. The only difference is that Coinbase’s wallet is free while Coinbase charges fees.

The advantage of the Coinbase wallet is that it does not require users to provide personal information. However, this means that if someone gains unauthorized access to your Coinbase account, they could potentially steal your cryptocurrency.

The disadvantage of Coinbase wallet is that you cannot send payments outside of the United States. It means that if you live overseas, you may need to use another method for sending funds abroad.

Related: Avoiding Coinbase Scams (What You NEED to Know!)

5) Is Coinbase wallet ERC20 compatible?

Yes. Coinbase is currently working towards becoming ERC20 compliant. All cryptocurrencies supported by Coinbase will become accessible through their wallet application when this happens.

It includes Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), Stellar Lumens (XLM), Basic Attention Token (BAT), and 0x (ZRX).

How to buy ERC20 on Coinbase step by step;

  1. Open up the Coinbase app on your mobile device
  2. Click on the menu icon at the top right-hand corner of the screen
  3. Select “Accounts & Balances.”
  4. Scroll down until you find ERC20′ under the section called ‘Addresses.’
  5. Click on ‘ERC20’ and select the currency you would like to purchase
  6. Enter the amount you want to spend in the field provided and press ‘Next.’
  7. Choose your payment method and complete the transaction.
  8. Once completed, your coins will appear in your wallet!

6) Is Coinbase wallet decentralized?

Yes. Coinbase wallets are fully decentralized. They operate independently, and no central authority or company is controlling them.

Each user has full control over his/her wallet.

Coinbase wallet decentralized exchange(DEX) allows traders to trade without relying on centralized exchanges such as Binance or Bitfinex.

Hacks and security breaches have plagued these types of exchanges.

The decentralized exchange eliminates these problems because each trades directly from their wallet.

The Coinbase DEX allows you to trade ERC-20 tokens with other users.

It also allows you to create a market to sell your crypto assets for fiat currencies.

7) Should I keep my bitcoin in Coinbase or Coinbase wallet?

If you already have an existing Coinbase account, it makes sense to store your BTC in the Coinbase wallet.

However, suppose you do not yet have an existing Coinbase account and would like to start using the Coinbase wallet. In that case, we recommend that you first download the official Coinbase wallet app on your smartphone before proceeding further.

You should note that once you download the Coinbase wallet app, you will be required to sign in to your Coinbase account. If you do not have an existing Coinbase account, you will be prompted to create a new one.

Once you have signed into your Coinbase account, you will add your BTC address to your Coinbase wallet. You can now transfer your BTC to your Coinbase wallet.

Once you have transferred your BTC to your Coinbase Wallet, you can now withdraw it back to your bank account.

8) How long does it take to withdraw from the Coinbase wallet?

It usually takes 24-48 hours to get a coin from Coinbase. You can find the confirmation email from Coinbase in your email inbox. Please check your spam or junk mail folder if you don’t receive the confirmation mail. Since Coinbase is a U.S.-based exchange, it may take an additional 48 hours for the funds to reach your account when sent using a credit card.

9) Does Coinbase wallet support shiba inu?

Yes Coinbase does support Shiba Inu. You can use your Shiba Inu to purchase Bitcoin, Ethereum, Litecoin, and other cryptocurrencies. Shiba Inu is a tokenized dog breed which means that its unique blockchain I.D represents it. The Shiba Inu Token (SIT) pays for goods and services within the Shiba Inu ecosystem.

Shiba Inu is a project developed by Kinship.io. It aims to make cryptocurrency easy to understand and accessible for everyone.

10) Has Coinbase wallet ever been hacked?

Coinbase has never been hacked or compromised. The security and integrity of Coinbase are paramount to the overall stability of our service, and customer trust is of utmost importance.

However, like many online services, outside parties may send emails pretending to be from Coinbase. These emails are sent to trick you into disclosing your personal or financial information.

You can help protect yourself from these or other types of phishing scams by reading an email’s content carefully, checking the email address and sending address carefully, and if you’ve ever used Coinbase before, hover over the link and check for any unusual changes in it.

11) Is Coinbase wallet free?

Coinbase wallet is a free-to-use app. There are no fees to buy, sell or operate on Coinbase. However, there may be built-in conversion fees for the different cryptocurrencies that Coinbase supports. Once you purchase coins with your Coinbase wallet, you can withdraw them to your cryptocurrency wallet.

Additionally, Coinbase does not charge fees for sending coins to or from Coinbase.

12) Is Coinbase wallet non-custodial?

No. Coinbase is a custodial wallet meaning that we hold your private keys for you. It ensures that your assets remain safe and secure at all times. We also keep a record of your transactions to always view your transaction history.

However, it is crucial that you only store your private key(s) on a device that you do not access without permission. Your private keys should be stored offline and kept away from hackers and thieves.

13) Can I use my Coinbase wallet for Mining?

No. Mining is a process where computers solve complex mathematical problems to validate new blocks of transactions. The reward for solving these problems is a small amount of newly minted cryptocurrency. Unfortunately, this process requires large amounts of computing power. As such, it is not possible to mine using Coinbase wallets.

Your Coinbase wallet is only a place to hold and spend your cryptocurrencies.

Coinbase allows you to buy bitcoin with USD and buy various other cryptocurrencies. If you want to sell your Bitcoins for USD, Coinbase is the best place. But if you want to buy Bitcoin with USD directly, then go directly to one of the exchanges like Coinbase or any other exchange that offers USD exchange.

14) How do I protect my Coinbase wallet?

To get started, visit security settings for a step-by-step guide to protecting your money. The best protection is generally a combination of hardware and software wallets. Software wallets are more convenient to use but are generally less secure since they are connected to the Internet, and any hacker that manages to find your wallet address can access your funds. Hardware wallets offer a high level of security.

To buy cryptocurrencies, you will need your Coinbase wallet Q.R. code saved in the app on your phone or tablet and used as an identifier when funding your account from another source, such as a bank account or credit card. If you don’t want to use your phone, you can generate a paper wallet and copy the wallet address by hand.

Your Q.R. code is the identifier when funding from another source because anyone can get your Coinbase wallet Q.R. code from your Coinbase account.

Once you own your cryptocurrency, you must encrypt it. It means converting it into an unreadable encrypted form with a passphrase and storing it in a password manager or encrypted storage location that is not connected to the Internet. It will ensure that no one can access your funds without knowing the correct passphrase.

To manage your cryptocurrencies, we recommend using a hardware wallet like Yubico or KeepKey. Both of which support connecting to a computer, iOS, and Android. Attention! Note that these are only suggestions, and Coinbase can’t be responsible for the security of your money.

It’s your job to protect your money. Coinbase also provides a security checklist link on the website, which you should follow.

15) Does Coinbase wallet pay interest?

Yes. You earn interest on all balances held within your Coinbase Wallet. Interest rates vary based on the type of currency you have stored in your wallet. For example, Ethereum has a higher interest rate than Litecoin.

One can earn crypto rewards through these ways;

Staking: Staking is when you stake your coins (cryptocurrencies) to earn interest. When you stake your coins, you’re essentially lending them out to the network so that others can use them. In return, you receive a portion of the staked amount back as interest.

Lending some of the Crypto with CeFi: CeFi is a peer-to-peer lending platform where people lend their cryptos to borrowers. The borrower pays back the loan plus interest to the lender. Lenders can choose between different types of loans, including fixed-rate loans, variable-rate loans, and even loans against future returns.

Lending some cryptos with Defi: Defi is similar to CeFi, except that lenders set up automated contracts called “defis” instead of manually entering into individual transactions. This Defis automatically convert the cryptos lent into fiat currencies at predefined exchange rates.

You should note that you must first deposit at least $100 in your Coinbase wallet to start earning rewards. Once you do that, you will see your balance increase, and you will notice that there is now a new tab under your wallet named Rewards. Clicking on this tab will open up a page that shows how much interest you earned on your balance during the past 24 hours.

16) How do I increase my wallet limit on Coinbase?

The maximum amount of funds that you can hold at any one time in your Coinbase account is denominated in U.S. dollars. The maximum current limit is $50,000. When you sign up for Coinbase using a U.S. or Mexican bank account or a verified payment method issued by the U.S. or Mexican bank, the amount will be automatically set to $25,000 per wallet.

You can increase the number of wallets allowed from your Coinbase account settings page by;

Go to Your Wallet under Personal Account.

View your current wallet limits.

Click on the “Add additional wallets” button.

Besides USD, select the currency you would like to add a new wallet for. For example, enter Bitcoin or Ethereum into the drop-down menu and click OK.

Enter the wallet address where you want to store the money. You can copy and paste or enter your wallet address manually.

Save your personal information and verify your identity.

Once you are verified, your new wallet limit will be displayed in the drop-down menu for your added currency. You can click on the “Update Limits” button when you have completed everything correctly.

If you have a Coinbase account with an active bank account or payment method from a U.S. or Mexican bank, the limit will automatically increase.

17) Is Coinbase wallet hot or cold?

A hot wallet is a type of wallet that is always connected to the Internet. It means that it has access to all of its funds at all times. A hot wallet is best used to store small amounts of cryptocurrency because if the connection goes down, all of the funds stored in the wallet are lost forever. On the other hand, a hot wallet is ideal for those who plan to use cryptocurrencies as a long-term investment vehicle.

A cold wallet is a type of storage device that stores cryptocurrency offline. Keeping large sums of cryptocurrency in a cold wallet is not recommended because they are more vulnerable to hacking attacks. However, cold wallets are useful for the short-term storage of small amounts of cryptocurrency.

Cold wallets are offline wallets that do not connect to the Internet. They provide greater security than hot wallets because they are only accessible through a private key. Private keys are not easily hackable, unlike public keys, which are easy to find.

Coinbase is a hot wallet. It means it’s connected to the Internet, inherently vulnerable to cyberattacks. If you have a significant amount of money in your Coinbase wallet, you should store additional funds offline in cold storage wallets.

Coinbase also offers Vault accounts for an additional fee for improved security. A vault allows users to store their cryptocurrency safely and more securely offline.

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Wrapping Up

Coinbase wallet has several security features to protect your money, including 2-factor authentication and the recovery sentence. These features will help keep your Coinbase account more secure and safe. When storing your funds in a hardware wallet, you should also be careful with your passphrase as it protects access to the funds stored there. Note that it’s important to never store all of your cryptocurrency on one single device; always split up between multiple wallets or multiple devices for improved protection.”

You have to protect your money. If you have a significant amount of cryptocurrency in your Coinbase wallet, you should also store additional funds offline in cold storage wallets.

If you are willing to spend just a little more money, other wallets offer better security, including hardware and paper wallets, but we recommend that beginners stick with CoinBase until they learn more about cryptocurrencies. Although, if you’re set on using a hardware wallet, it might be a good idea to start with the Trezor or Ledger as they are both popular and well known. It would be best to register with your Coinbase wallet for easy access via the app and faster transactions. That way, when you do decide to buy a hardware wallet, their software will be pre-installed on it, and all you have to do is register with them. 

References

  1. https://www.coinbase.com/wallet
  2. https://www.coinbase.com/learn/tips-and-tutorials/how-to-set-up-a-crypto-wallet
  3. https://www.investopedia.com/terms/h/hot-wallet.asp