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Coinbase vs Coinbase Pro

With cryptocurrency taking the world by storm, many people are beginning for the best way to convert their fiat currency into Bitcoin as well as some of the best cryptocurrency projects like EOS, Ethereum, and NEO. For most people in western nations, Coinbase is currently the best way to enter the market.

If you’re looking into signing up for Coinbase, you’ll inevitably run into the question of what is the difference between Coinbase and Coinbase Pro? Let’s explore that.

Note – if you use any of the Coinbase links in this article, we’ll each get $10 of free Bitcoin as a signup bonus once you buy $100 worth of cryptocurrency on the regular Coinbase platform. With that said, any recommendations I make are from my experience using cryptocurrency for years, not for the financial incentives. There are many alternatives I could mention, but I choose only the best.

Coinbase vs Coinbase Pro

These two cryptocurrency trading platforms can ultimately accomplish the exact same things: you can start with fiat currency and end with cryptocurrency. The ease of use, fees, and sophistication are where these two differ significantly. After reading this article you’ll have a strong understanding of the differences and similarities between Coinbase and Coinbase Pro in the following categories:

  • Available Cryptocurrencies / Trading Pairs
  • Ease of Use
  • Fees
  • Security
  • Trading Power
  • Speed

So let’s dive right in, starting with the regular Coinbase platform:

What is Coinbase?

Coinbase is the user-friendly version of the popular trading platform. It allows you to easily sign up, connect a bank account, credit or debit card and buy cryptocurrency without having to learn about market orders, limit orders, spreads, or any of that (we cover it below if you’d like to learn about how to do technical trading).

Available Cryptocurrencies / Trading Pairs

Currently you can buy the exact same cryptocurrencies on Coinbase as you can on Coinbase Pro. Available for purchase from fiat are:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Bitcoin Cash (BCH)
  • Ethereum based ERC-20 tokens (announced but not yet implemented)

Trading Pairs

On regular Coinbase you can only exchange cryptocurrency for your home country’s fiat currency. I’m not sure why someone would want to change for another country’s currency in the first place, but if that’s a feature that seems attractive to you then it might be worth learning how to use the professional interface of Coinbase Pro.

Ease of use

Rating: 5/5

There’s a great reason the regular Coinbase platform exists: it’s a simple, straightforward way for people to buy the most popular cryptocurrencies without having to learn the tools of professional day traders.

Coinbase has a great smartphone app for their base version. With it you can do everything that the average Joe will need, you can do all of the following with the most popular cryptocurrencies:

  • Buy
  • Sell
  • Send
  • Receive
  • Check your wallet balances
  • Check prices

 

Fees

Rating: 3.5/5

If you think of Coinbase in terms of a regular retailer where they’re selling you a product they manufacture, the fees seem really high. But this just isn’t the case.

When you buy $1000 worth of Bitcoin from Coinbase, they line you up with someone or multiple people who are selling $1000 worth of Bitcoin. It isn’t Coinbase selling you Bitcoins, they’re providing access to a market full of buyers and sellers.

With this in mind, I think that the fees that Coinbase charges are very reasonable. You can’t have a huge organization with thousands of support staff and cutting edge technology without charging some kind of fee to use the platform.

With that said, there is a way to buy cryptocurrency for even lower fees with Coinbase Pro. For more on that check out how to pay little to no fees with Coinbase Pro.

Security

Rating: 4/5

If you’re going to be using an online wallet to store your cryptocurrency, Coinbase is probably the most bulletproof way to do so. Coinbase offers 2FA so you can add an extra layer of security to your account.

I personally wouldn’t recommend relying on Coinbase to store significant amounts of cryptocurrency for you though. For that, you should really only rely on a top-notch hardware wallet like the Ledger Nano S, or if you’re looking for a professional model the Ledger Blue. Both of these models offer enterprise-level security in the palm of your hand. Buy one of these and you can carry a bank around in your pocket.

Trading Power

Rating: 3.5/5

The regular Coinbase platform offers the vast majority of what 95% of people need for getting involved in cryptocurrencies. One of the limitations of the regular Coinbase platform is that you can only make market buys and sells. If you’re don’t actually know what a market buy is and aren’t too keen to learn about trading terminology, then the regular Coinbase platform is for you.

Speed

Rating: 3.5/5

This is a double edged sword. On one hand, once you have the money in your account, Coinbase is lightning fast from the moment you press buy to having the Bitcoin, Ethereum etc. in your account. However there are two caveats with the speed of Coinbase:

  1. Bank account transfer time
  2. Withdrawals/sending cryptocurrency

Bank account transfer time

This is pretty self explanatory. If you choose to deposit your funds via ACH or bank wire (or SEPA for you Europeans), it will take time to deposit:

  • 3-5 business days for ACH
  • 1-2 business days for bank wire
  • 1-2 business days for a SEPA transfer

Withdrawals/sending cryptocurrency outside of Coinbase

If you want to send your Bitcoin, Ethereum, Litecoin or Bitcoin Cash to another Coinbase user, transfers are insanely fast and free. This is because you aren’t actually making a transaction on the blockchain. Coinbase has what’s called sidechains which allows them to make transfers to it’s own accounts fast and free.

However, if you want to withdraw off of Coinbase or send your cryptocurrency to a user that isn’t on Coinbase, it’s a different (although just as easy) process. Both of these are accomplished the same way — by using the send button:

How to send on Coinbase
How to send bitcoin on Coinbase

When sending to other people or withdrawing to your own accounts like to Binance for trading to altcoins or to your Ledger Nano S to securely store your crypto, you’ll use this same process. Just just need to enter the address you want to send it (check it twice!), and enter the amount you’d like to send. The “Note” field is optional if you’d like to record something about the transaction for later use.

So why do I tell you all this under speed? Because withdrawals and sending to an external account take longer on Coinbase than it would from a regular wallet. Coinbase has security measures to detect fraud and that adds some extra time on before your transaction starts. Usually it’s pretty quick, 10-15 minutes. That’s another reason I really like having a nice hardware wallet like the Nano S, it’s lightning fast to do any kind of transfer because you own your own private keys, and therefore your own security.

What is Coinbase Pro?

Coinbase Pro trading interface

 

Coinbase Pro is a professional cryptocurrency trading platform that is basically Coinbase’s old trading platform, GDAX, with a new user interface. With Coinbase Pro you can buy the same cryptocurrencies as you can on Coinbase, but that’s where the similarities end.

For people how aren’t familiar with how a trading portal works it might look intimidating. Whether or not its worth venturing to learn the interface depends on how much you value the additional flexibility of the platform. To help you decide I’ve put together a quick bullet list of the pros of using Coinbase Pro:

  • Trade from crypto to crypto
  • Can place market, limit, and stop orders
  • More powerful charts to analyze short-term trends (depth chart, order book, volume, etc)
  • Lower fees, and even possible to have a zero-fee transaction with the right order type
Coinbase Pro depth chart
Coinbase Pro depth chart

Should you get Coinbase Pro or stick with Coinbase?

There are two main questions to ask yourself to decide this:

  1. Do you want to be a day trader – trying to guess where the market is headed? Or do you just want to buy and hold your crypto? Not to discourage you, but day trading crypto is not for the faint of heart, the wild swings mean you can lose everything very fast. It’s a good idea to learn what you’re doing in a more stable market like stocks before risking everything in a wild west market like crypto. Luckily, you don’t need to know any of that stuff to buy and hold!
  2. Is it worth it to you to learn how to use the trading portal to save a few percent on the fees versus regular Coinbase?

If the answer to either of those questions is yes, then read on. If you’re more interested in spending your time reading about blockchain projects to invest in than analyzing the charts trying to guess where bitcoin will be in a few hours, I’d suggest sticking with regular Coinbase.

Available Cryptocurrencies / Trading Pairs

As I mentioned above the available cryptocurrencies are currently the same between Coinbase and Coinbase Pro. The cryptocurrencies you can buy on Coinbase Pro are:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Bitcoin Cash (BCH)
  • Ethereum based ERC-20 tokens (announced but not yet implemented)

Trading Pairs

This is a bit different about Coinbase Pro. If you have a Coinbase Pro account you’re able to trade not only for your home country’s currency, but also for three of the world’s largest currencies:

With USD and EUR you can trade for any of the available currencies on Coinbase Pro. With GBP you can only trade directly for Bitcoin — which you’d then be able to trade for any of the available cryptocurrencies.

So if you can buy the same cryptocurrencies, what’s the difference? Nearly everything about you interact with the platform, as well as the fees you’ll pay to make your exchange.

Ease of use

Rating: 4/5

Coinbase Pro is without a doubt more tricky to use than the regular Coinbase platform. Whenever you’re talking about using a trading portal, there’s going to be some learning and acclimation — even if you already know how to use other trading portals.

With that said, Coinbase is a very user-focused company and if there’s any trading platform that would be best to learn on, I’d say Coinbase Pro is it. If you’ve already spent some time using a stock brokerage account then you should be able to figure out what you’re doing with a couple hours and Google at your finger tips.

Overall the user-interface is really well designed, with easy navigation between USD, EUR, and GBP, as well as easy navigation to each cryptocurrency that you can trade: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash (ERC-20 tokens on the way!)

Fees

Rating: 4.5/5

The fees are where Coinbase Pro really starts to shine. Standard fees on Coinbase Pro are 0.3% (But this is only if you’ve already got the funds on Coinbase Pro, there are no credit/debit card buys on Coinbase Pro).

How to pay no fees on Coinbase Pro

Okay so this might be the only reason you’re considering going with Coinbase Pro. What you need to do to get free trades is to create your orders as a limit order, NOT a market order.

On trades there can be a maker and a taker. Let’s do an example. Let’s say my friend George wants to sell 1 bitcoin. He is really worried that bitcoin is a scam and that the price is going to zero tomorrow. He’ll take anything she can get for it, he just wants it gone right now. He goes on, makes a market order to sell it at whatever the market is currently willing to pay him for it. When he makes that trade, he is a taker, because he’s taking whatever the market will give.

Then lets say we have Chris, he has been holding his 1 bitcoin for three years. He’s seen the price go up and down over and over. With that said, he does need the cash by next month so that he can remodel his home. He goes on, sees that the current price is $8100. He decides He’s going to wait until the price goes to $8300 before selling. He places a limit order for 1 bitcoin at $8300. The trade doesn’t execute right away, so he walks away and comes back the next day. Looks like overnight the price popped up and the trade went through. He was a market maker because he was willing to wait for someone to come along and take the offer he had listed.

As a maker there are no guarantees that your price will ever be reached, meaning you may never be execute the trade you created. However, as a reward for being a market maker, you will pay 0 fees to Coinbase Pro.

In order to place a limit order and pay no fees with Coinbase Pro, simply deposit your funds into Coinbase Pro and choose “Limit” on the sidebar on the left. Enter the amount you want to buy or sell, and the best price you’re willing to buy or sell for. Then wait and see if it executes!

Security

Rating: 4/5

The security of Coinbase Pro is equal to that of Coinbase. You’re able to set up 2FA to add an extra layer of security to your withdrawals. The issue with Coinbase however is that you don’t actually own your private keys. You are completely reliant on Coinbase to make any transfers you want to.

For that reason, I personally only use a Ledger Nano S to store my cryptocurrency. I’ll happily buy and sell on Coinbase, but when I’m not making any conversions I’ll definitely keep it on my Nano S.

Trading Power

Rating: 4.5/5

Besides paying lower fees, this is where Coinbase Pro really starts to shine over the regular Coinbase platform. On Coinbase Pro you can make do the following:

  • Market order – Buys & sells
  • Limit order – Buys & sells
  • Stop order – Buys & sells

Market Order

As described above, a market order is when you want to buy or sell right now and you’re happy with the price that the asset is currently trading at. This is the easiest way to buy something without sitting around and watching where the market is going minute by minute. You’ll probably won’t get the absolute best price possible (we’re talking fractions of a percentage), but you do know you will get what you wanted to buy. For this reason, this is the default that most exchanges go to.

Limit Order

This is the way to buy or sell an asset if you have a set price in mind that you aren’t willing to go above or below. You set the quantity you want to sell, and at what price you’d sell it at. As the market fluctuates up and down your order may or may not become the next order in the book to be filled. With a limit order, your order may only fill partially depending on the quantity that wants to either buy your crypto or sell it to you at your limit price.

With limit orders there’s no guarantee your order will fill. This means you could have the limit order open for days, weeks, or even months and not actually end up buying anything. I can’t tell you the amount of times I’ve placed a limit order and then ended up paying more because the price never went where I wanted it to, but deep down I was actually happy to pay the original price it was at.

Stop Order

A stop order is very similar to a limit order. You can place a stop sell if you’re worried that the price of your asset will go down below a certain amount. So if you have one bitcoin, and the price is currently $9000, you may be naively thinking “if the price goes below $8000, bitcoin is dead and I don’t want to have it anymore”. If this is the case, you’d place a stop sell order at $7999.

If the price drops to $7999 or less, your order will essentially convert to a market order and sell all of it at whatever price the market will bear. It does NOT mean you will only sell what you can for $7999 or more like a limit order.

This is a method that traders often use to protect their downside so that they don’t have to constantly keep an eye on the price and can still sleep at night. There is a tactic used by whales where they go stop hunting — meaning they will sell large amounts of an asset with the goal of dropping the price to popular stop-loss levels… say $7999.

Once they find the sweet spot and stop-loss order begin filling, they flip their trade and become buyers, buying up the asset as it’s being sold at fire-sale prices. This is textbook market manipulation and can only exist in a market where people hold a huge amount of an asset as a portion of the total — such as early cryptocurrency adoptors.

Speed

Rating: 3.5/5

Coinbase Pro is identical to regular Coinbase when it comes to the speed. It can take a bit of extra time to send crypto off the platform, but if you’re sending to another address on Coinbase it’s lightning fast and free. See Coinbase speed above for more information on the speed.

 

About the author

Nick Hastreiter

I like to write about the future of different technologies and business models. With Future of Everything I approach this by interviewing founders, CEO's, and other game changers to share their vision for the future of their industry. Apply today to be a contributor (link on the menu at top)