If you’re new to cryptocurrency, you might be confused by the number of options when it comes to exchanges. Doing a quick search on the internet, you’ll probably learn that Coinbase and Binance are two of the largest cryptocurrency exchanges around — and for good reason. Both exchanges have a large following, are relatively secure, and have created easy-to-use mobile apps to make it easy for anyone to buy and sell cryptocurrency.
So, which platform should you choose? Which one’s better for you? Here, we’ll discuss the fees and features of both platforms, which will help you make an informed choice for yourself!
Coinbase’s exchange platform
Founded by Brian Armstrong and Fred Ehrsam, Coinbase is a broker exchange. This means that instead of bringing sellers and buyers together, Coinbase acts as a middle man and buys cryptocurrency for its users. As of 2019, Coinbase has more than 20 million customers in 32 countries and cryptocurrency worth more than US$150 billion has been exchanged on the platform.
Buying cryptocurrency Coinbase can take 2 forms — through using fiat currencies and crypto-to-crypto trading. You can use fiat currencies of any of the 32 countries it operates in at the moment, such as Hong Kong, New Zealand, Kuwait, among others.
As for crypto-to-crypto trading, there are only selected few trading pairs available on the platform. Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC) and Ethereum (ETH) are the only cryptocurrencies that can be paired up and traded with each other.
Binance’s exchange platform
Unlike Coinbase, Binance does not let users buy cryptocurrency with fiat currency as it is a crypto-to-crypto trading platform. This might seem intimidating for beginners since you’ll first need to own cryptocurrency before you can trade on Binance. That being said, there are some features on Binance which outshine Coinbase.
Binance offers a wide selection of cryptocurrency trading pairs. Bitcoin (BTC) and Ethereum (ETH) both have more than 140 trading pairs available. Additionally, whether it’s a newly launched coin or a reputable one, you’ll find more than 200 cryptocurrencies on the platform. What Binance lacks in the area of fiat trading, it makes up with it through the wide range of cryptocurrencies available.
Since Coinbase is a broker exchange and Binance is a crypto-to-crypto exchange, differences in transaction fees is to be expected. On Coinbase, the platform charges a fee of 1.49% every time a sale is made. If you’re using a credit card in the transaction fees can go up to 3.99%. On top of transaction fees, you’ll also incur conversation rate charges for your transaction, a set price for each trade. The rates are based on the Global Digital Asset Exchange (GDAX) exchange rates.
In comparison to Coinbase, fees on Binance is much lower. For all trades, Finance charges a fee of merely 0.1%. Additionally, it also gives users a 50% discount on fees when Binance Coin is used in these trades. While it might seem a little intimidating to use Binance over Coinbase initially, you’ll definitely profit more in the long run when you trade on Binance due to much lower fees incurred.
When using an exchange, it’s important to only trade on those that are reputable and safe. Both Binance and Coinbase use two-factor authentication to prevent accounts from being hacked. According to this report, Coinbase stores about 98% of its users’ funds offline and also keeps this fund separated from its operating funds.
As for Binance, where it stores users funds is undisclosed. However, it’s worth noting, that Binance had suffered a case of missing funds after it had launched a system upgraded in June 2018. Although Binance had taken measures to compensate affected users, its level of security should be a point of consideration when you’re choosing a cryptocurrency exchange to trade on.
Coinbase and Binance are both hugely popular exchange platforms for different reasons. A great way to go about this is to use both of these platforms. You can start off by using Coinbase first and then eventually move on to trade on Binance, where you can maximise your profits with lower transaction fees. Still hesitant to get started? Read this to find out why you should stop procrastinating when it comes to trading in cryptocurrency!