What’s the Difference Between Coinbase.com and Coinbase Wallet?

If you’re into crypto, you’ve probably heard of Coinbase.com. It’s one of the world’s most popular cryptocurrency exchanges but isn’t the only product that Coinbase has released. Coinbase Wallet is another useful platform offered by this company, but is it more or less the same as Coinbase.com? Or do these two services differ?

What’s the difference between Coinbase.com and Coinbase Wallet?

What Is Coinbase.com?

Coinbase.com is an American centralized cryptocurrency exchange launched in October 2012 by Brian Armstrong and Fred Ehrsam. Coinbase initially only dealt with Bitcoin, but much has changed since its early days. As the cryptocurrency market has grown, the Coinbase exchange has expanded and diversified massively and now supports the trade of over 170 coins and tokens. Fiat currencies, such as the US dollar, can also be used on Coinbase.

Coinbase is a centralized exchange and forms part of the CeFi landscape. CeFi, or centralized finance, allows individuals to trade on solely centralized platforms, which dedicate power and control to small groups of decision-makers. Many major crypto exchanges, like Binance and Kraken, are centralized, though decentralized exchanges are also popular.

coinbase exchange trading page screenshot

On Coinbase.com, you can buy, sell, stake, trade in an advanced setting, and even sign up for the Coinbase debit card. The platform’s interface is easy to use but offers a more complex setup for professional traders in the form of Coinbase Pro. You can also view many relevant market statistics on the Coinbase exchange, such as asset prices, past fluctuations, and market caps.

Coinbase offers another useful feature known as Coinbase Learn. This allows you to learn about cryptocurrency, Coinbase’s services, NFTs, and more. You can even earn rewards using Coinbase Learn by reading about and answering questions about certain topics. For example, Coinbase offers NEAR tokens in return for learning about NEAR Protocol.

Coinbase can hold your funds in a custodial form, with the platform being the custodian. This means that Coinbase is held responsible for the funds you hold in your exchange account. Coinbase uses the KYC (Know Your Customer) process in its custodial model, wherein you must verify your identity to use the exchange and its custodial storage.

Coinbase’s custodial storage option keeps your private keys for you, so you don’t have to worry about keeping them safe. But this means that you’re putting your trust in the custodian to responsibly and safely store your sensitive information. If the platform fails to do this, your crypto assets could become vulnerable to malicious actors. Furthermore, it’s still on you to keep your password safe, protect your account with 2FA, and take security precautions.

If you want to store funds on a long-term basis, it might be better to use a separate non-custodial wallet that you have control over. This puts you in the driving seat and gives you total custody of your assets.

This is why Coinbase Wallet could be useful for you. So, what is it?

What Is Coinbase Wallet?

Coinbase Wallet is a free non-custodial wallet that you can use to store your private keys. However, because Coinbase Wallet is non-custodial, you are ultimately responsible for the safe storage of your assets. We’ll discuss this further a little later.

Coinbase Wallet is entirely virtual, as it is a software wallet. This means you’ll be able to access your Coinbase Wallet account via your desktop or mobile app. In addition, Coinbase Wallet offers a desktop browser extension for quick and easy access, which is available for Chrome users. The smartphone app is available for Android and iOS devices.

While Coinbase only supports 170 or so assets, Coinbase Wallet supports thousands of cryptocurrencies, including ERC-20 tokens, such as Shiba Inu and Tether. All the industry’s big names are also supported, including Bitcoin, Bitcoin Cash, Solana, and Litecoin. You can even store NFTs using Coinbase Wallet. Both ERC-721 and ERC-1155 tokens are supported.

But is Coinbase Wallet really safe? Well, its non-custodial feature would certainly be considered a wise security move by many, but this isn’t all that Coinbase Wallet offers in terms of protection. When you sign up for Coinbase Wallet, you’ll need to set up a four-digit security PIN. This must then be used for all future logins. Coinbase Wallet also offers two-factor authentication, which provides an additional layer of security to each sign-in via verification from a separate device or account (such as email or text).

The Coinbase Wallet interface is very easy to use, so it’s well-suited to all levels of crypto and technological experience. So you don’t need to worry too much about navigating the platform when you get started.

While Coinbase Wallet is a solid option for private key storage, it’s important to note that security vulnerabilities are present. Namely, the fact that it is a software wallet exposes it to certain attacks. With a hardware cryptocurrency wallet, your private keys are kept in cold storage on an offline device. These devices can sometimes offer Bluetooth connectivity but never connect to the internet.

Software wallets, on the other hand, require an internet connection. This makes them more vulnerable to remote attacks that rely on an online connection to be carried out. This doesn’t mean that software wallets are unsafe, but it is a factor worth noting if you want to use the most secure wallet possible.

You can sign up for Coinbase Wallet without even providing your email address, which is great for anonymity if that’s a priority for you.

If you’re not a fan of the Coinbase exchange but would like to give Coinbase Wallet a try, you may be wondering if you need the former to use the latter. But thankfully, this isn’t the case. You do not need to be signed up for the Coinbase exchange to use Coinbase Wallet. While both services are products of the same company, they are not reliant on each other for use.

But is it a good idea to use Coinbase.com if you use Coinbase Wallet? Does it make the entire experience more streamlined?

While Coinbase does connect to Coinbase Wallet for fund transfers, the platform also allows transfers to various other hardware and software wallets, including MetaMask, Trust Wallet, Exodus, and Ledger. So using Coinbase Wallet won’t really make your Coinbase.com experience any smoother, though it is a sensible option for storing your private keys.

Coinbase.com and Coinbase Wallet are by no means one and the same, but you can use both platforms when dealing with your crypto. Coinbase.com is a great option for trading, staking, and earning, while Coinbase Wallet is a trustworthy software wallet provider that gives you total control of your assets. Either platform can aid you in your crypto journey, regardless of whether you use them together.

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