Why Coinbase.com sucks - 5 reasons to hate them
Let me start this by saying that I currently use Coinbase.com and have recommended it to others because it is easy to use. But it has serious problems that other companies would not get away with, one of which could be considered a UDAAP violation if Coinbase.com were a regulated institution.
Let me know your thoughts and experience or feel free to disagree with me. And if you know of an easier to use, more fair service than Coinbase.com, PLEASE tell me so I can refer people there instead.
Exchange rate to buy is higher than exchange rate to sell – Right now (12/20/17 at 6:17 AM), if I buy $1,000 worth of Ether, I will receive 1.18838 Ether. If I immediately switch to sell $1,000 of Ether, I will be selling 1.21669. That does not seem to be due to a fee or any other reason like price changes. It is pretty consistent that your exchange rate is always in Coinbase.com’s favor.
The fees are horrible – If you buy $1,000 of a currency and have it ACH debited from your account, you will pay $14.00. Credit card would cost you $38.00. When you sell, it will cost you another $14.00 to move the money back to your checking account. Companies pay a fee for processing credit card (2% to 3%), the fee to process an ACH debit is less than $1.00. So if you buy and sell the same $1,000 worth of cryptocurrency, you will pay $28 to $52 in fees. This, in addition to the exchange rate issue in #1 above means that you’re really losing a lot of money.
Currency takes too long to credit – When you buy a currency and select ACH Debit, it takes about a week before the funds will show up in your coinbase account to be used. But it looks like they are using same day ACH debits to withdraw the funds from your checking account. This means they are taking $1,000 today and have access to those funds, but you cannot actually access the associated cryptocurrency for a week.
You can’t exchange between currencies – If you hold Ether on Coinbase and want Bitcoin instead, you can’t just switch within Coinbase. Instead, you have to sell your Ether (at a worse exchange rate and a large fee), wait a few days for the $ to arrive in your checking account, then buy Bitcoin (and pay another fee), and wait a week for the Bitcoin to be available.
They do not have enough support – If you have an issue and cannot find help in the help section, you can email Coinbase. I did this for an issue that was not in the help section (for full disclosure, it turned out that I was mistaken and there was no issue). A few days after the email, I received another email that basically said sorry for the slow response but we’re understaffed. If this is a legitimate issue, please respond to this email and we’ll look into it.
Overall Coinbase.com is still one of the most simple ways for a normal person to buy cryptocurrencies, but I am hopeful that these issues are addressed or a better alternative becomes available.
Comments and thought are more than welcome! Let me know if you disagree.
I don't use Coinbase myself but here's a couple things that might clear your thoughts on the problems suggested above.
All exchanges have different buy and sell prices. This is the cut that they take, no matter what exchange you go to you'll see a big buy/ sell difference.
Fees are also a big part of all exchanges. It just means you should put that money in and leave it for a while so any fees are mitigated by large profits.
There is a huge influx of people signing up to Coinbase and its natural when everyone is sending money to them it'll take a while for it to be credited. They're trying to add more staff to deal with this every day. We can't expect them to add 100 new staff instantly, they do need to make a profit.
If you want to exchange between currencies then I'd suggest buy say ETH on Coinbase, then send it to another exchange that has ETH pairs e.g. Kucoin, Binance etc
As mentioned before they're a company of around 100 staff. It'll take time for them to grow with the demand they're facing. Support for all crypto exchanges are horrible at the moment. I waited a month to get a ticket cleared on Bittrex for example.
Hope this helped you. Not meaning to take stab or anything, these a genuine concerns most of the crypto-verse has atm.
Your points make sense. I just think that the largest crypto exchange should not abuse their position in this space. They really need some competition so they’re forced to be a little more competitive.
UPDATE - Just received an email from Coinbase.com that says I have a USD wallet so that I don't have to wait when I buy/sell currencies. Probably will still pay a fee, but the delay when you buy may get better...that also means that you will be storing $ on Coinbase, giving them full access to your funds (i.e. earning interest) while it sits there.