What Is Coinbase?
Coinbase is a United States-based cryptocurrency exchange. It offers a number of products and services, but is best known as a centralized intermediary for buying and selling major cryptocurrencies. Coinbase is also a custodial wallet provider, with a wallet that can be accessed on its website or via a mobile device. The company's professional platform, Coinbase Pro, offers more advanced features, including the option to trade cryptocurrencies against stablecoins and place limit and stop orders.
In addition to serving individual traders, Coinbase also provides a variety of institutional products, including digital asset custody and a crypto payments platform for merchants. The company invests in blockchain-focused startups through Coinbase Ventures, as well.
Coinbase was founded in San Francisco in 2012 by Brian Armstrong and Fred Ehrsam. It is licensed to operate in over 100 countries spanning North America, South America, Europe, Asia, Australia and Africa.
What Does Coinbase Specialize In?
Coinbase is primarily known for having a straightforward, easy-to-use interface for those seeking to buy and sell cryptocurrencies — especially those who are new to the world of crypto. As such, it's generally recognized as offering one of the simplest crypto on-ramps. For example, the exchange will stake users' Tezos (XTZ) tokens and Cosmos (ATOM) tokens on their behalf, automatically collecting rewards and distributing them to users' wallets.
While Coinbase has a global presence, it is highly popular in the U.S. where crypto companies are subject to regulation by state governments, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Of note, it is one of only a few cryptocurrency exchanges to obtain a BitLicense from the New York State Department of Financial Services — the license required to operate a digital currency business in the state of New York.
The Coinbase Coin
Coinbase is a developer of USD Coin (USDC), a stablecoin that is pegged one-to-one with the U.S. dollar. Together with payments processor Circle, Coinbase co-founded the Centre Consortium, which launched USDC as an ERC-20 token on the Ethereum mainnet in October 2018. The USDT sold on Coinbase is issued by Circle.
According to the Centre Foundation, having a price-stable, blockchain-based digital currency is essential for ushering in blockchain adoption in payments technology and the financial industry. Coinbase has also said USDC has advantages over fiat because of the ease of sending, programming with and using USDC in decentralized applications.
Coinbase has stated that for each 1 USDC that is minted, there is a corresponding $1 held in a bank by the issuer, thus collateralizing the asset and ensuring that its value remains equal to that of the dollar. When a token holder redeems their USDC, it is burned and its underlying funds are returned to the customer.
What Bonuses Is Coinbase Known For?
Coinbase offers a few opportunities for users of its exchange to earn bonuses. The primary way to do so is through Coinbase Earn, a program where users learn about cryptocurrency projects and receive a small amount of the projects' respective token in return. Participating projects have included Algorand (ALGO), Zcash (ZEC), Compound (COMP) and Stellar (XLM), among others.
In addition, Coinbase operates a referral program through which users who invite their friends to sign up with the exchange receive U.S. dollars for each one who joins, and it offers an annual percentage yield of 0.15% (as of November 2020) to those who hold USD Coin in their wallets.