Binance and Coinbase are both excellent cryptocurrency trading platforms, but which platform is better, and how is it better?
At a Glance
Any type of trading is risky. But the role of the investor is to mitigate their risk as much as humanly possible. The first risk mitigation action step is ensuring the platform one uses to transact follows regulations.
Coinbase is a US-based company known to follow regulations in every jurisdiction they operate in. They even trade in the NASDAQ. Unfortunately, the same does not apply to Binance. In addition, Binance is currently under investigation by the United States Department of Justice and Internal Revenue Services. So, in terms of regulatory adherence, Coinbase seems to have an upperhand over Binance.
Furthermore, when it comes to simplicity, Coinbase takes home the day. The types of transactions housed in Coinbase are way fewer compared to Binance. Although both platforms serve different people, Coinbase’s interface is far more straightforward and geared to address the needs of a beginner who does not have technical know-how in the crypto world.
That Being Said
Both Coinbase and Binance are among the best crypto trading platforms globally. The fact that they are among the best indicates that the two platforms satisfy the needs of specific people. But the two platforms are built for people with different needs.
Coinbase fits an amateur who does not have the technical knowledge of trading crypto. The Coinbase platform simply offers the ability to sell, request, buy and convert to fiat.
On the other hand, Binance caters to the technical traders with capabilities like a market order, limit order, stop-limit order, one-cancel-the-other, and much more.
Geographically, Coinbase is best for US residents. Binance has experienced a bumpy road in the US regarding regulations. The Binance US platform, which adheres to regulations, is not as good as the parent platform. Therefore, for US residents, Coinbase is a better option for them.
Before you make up your mind, let us dissect the two platforms, feature by feature. Then you will have a clear picture of what may make financial sense to you.
Coinbase started back in 2012 as a platform to exchange Bitcoin and has since grown to accommodate more transactions of up to 100 tradeable cryptocurrencies. Quarterly, Coinbase customers trade about $547 billion. In addition, their cryptocurrency ecosystem supports over 11,000 financial institutions.
Moreover, Coinbase is a remote company with no recognized headquarters and employs over 3700. These employees service over 89 million users and $278 billion worth of assets on the platform.
Pros/Cons of Coinbase
The platform has areas it thrives in and areas it doesn’t excel as much.
- Beginner-friendly – Coinbase is suitable for beginners as it offers simple options, including selling, buying, and exchanging. For beginners in the crypto world, Coinbase is the platform to start on.
- Variety of cryptocurrencies – Coinbase supports over 100 cryptocurrencies, and they keep adding. There are enough currencies to invest in and trade.
- Opportunity to earn crypto – Coinbase has a learning platform where users can earn altcoins by watching videos and taking quizzes to learn more about them.
- Ability to convert to fiat – Coinbase offers the option to withdraw crypto to fiat via bank account or PayPal. They also provide a Visa card to allow customers to spend their crypto.
- Built-in wallet – Coinbase has a built-in wallet that allows users to store their private keys on the platform.
- High transaction fees – Although users of Coinbase Pro have relatively lower transaction fees, Coinbase is more expensive than other platforms, including Binance.
- Poor customer service – A customer can only reach Coinbase via email or help ticket. There have been complaints from customers who could not reach them at critical times, including security issues.
- Fewer altcoins – Although the platform supports over 100 cryptocurrencies, there are a lot of other coins not on the platform, which can be limiting if you wish to trade in such specifically.
Binance is a decentralized crypto-exchange platform founded in 2017 by Changpeng Zhao. It is currently the world’s largest trading platform for cryptocurrencies.
Binance allows trading of over 500 cryptocurrencies on its platform. However, the platform might be a little complex because of the many options offered, from the tons of crypto one can trade to the various order types that one can place on the platform.
However, Binance has faced and is still facing regulatory challenges, being banned in certain countries and being under investigation in the US. It also does not help that all its options are unavailable in the US. It only supports less than 100 cryptocurrencies in the US. There are over 500 cryptocurrencies available to other users in other parts of the world.
Pros/Cons of Binance
Being the largest cryptocurrency exchange platform globally is a good indicator that Binance has pros, but there is always an equilibrium that dictates that they have cons too.
- A robust tradable cryptocurrencies portfolio – In markets outside the US, Binance allows the trading of over 500 cryptocurrencies. Unfortunately, they offer less than 100 in the US due to regulatory adherence. But even with the limited number in the US, it is still enough variety.
- Trading options and order types – Binance offer different trading options, including margin trading, spot trading, and peer-to-peer trading. Furthermore, they offer several order types, post-only order, limit order, stop-limit order, market order, stop market order, one cancels the other order, and trailing stop order.
- Low fees – Traders just pay a small token and keep the lion’s share of their trading margins. As a result, Binance is among the most favorable charge-wise platforms globally.
- Complex platform – Due to the robustness of Binance, its platform can be confusing at times. Their UI tries to improve the user experience, but it remains a complex platform to maneuver.
- No inbuilt wallet – Binance recommends Trust wallet. However, the lack of an inbuilt wallet can make it difficult for the user because there is no dedicated wallet curated for Binance.
- Regulatory constraints – Binance has been banned in the UK and is under investigation in the US.
- The US version is not robust – Binance US does not offer as many services as Binance Global. In the US, Binance fees are also higher than the fees in the rest of the globe.
Both Binance and Coinbase have features that make them stand out. We will compare the different features and establish which platform performs better.
Unlike physical wallets that hold cash, crypto wallets store private keys. Private keys are the passwords that you use to access your crypto. Crypto holdings remain on the blockchain. To prove that you own the assets on the blockchain, you use your private keys. You can use a hardware wallet or a trusted provider to store your private keys.
Coinbase provides an inbuilt crypto wallet. This is beneficial as you can access your holdings and transact them as you want easily under one platform.
Binance does not have an inbuilt wallet and recommends the Trust wallet. However, as much as the Trust wallet reviews are positive, challenges can arise during the transaction. In addition, since these are two different services, it might be challenging to address your issue promptly.
It is beneficial to have everything you need to transact under one umbrella for crypto-wallets. Therefore, Coinbase wins.
Transaction options are the different ways traders and investors can trade different cryptocurrencies. Just like in a stock market, there are various options that traders can choose from.
Coinbase offers simple transaction options, including buying, selling, and exchanging. While these options are sufficient for beginners, they do not cater to the pros. However, Coinbase Pro offers more technical trading options.
The Binance platform is for the experts. Therefore, it offers way much more trading options. These options include:
Investors might want to acquire more assets, and they do not have the muscle at the time. With margin trading, the investor uses funds from a third party to conduct their transaction. Then, they get their money back and pay the third party.
For most beginners, they start participating in a spot trade. Spot trading is the purchase of crypto assets at a spot price and hoping that it will go up, and then you will sell at a higher spot price.
Peer to Peer Trading
Peer-to-peer trading is the transaction of crypto assets with fellow crypto assets with other assets without the need to track orders and charts.
Binance also offers different order types, including:
- Post-only order – Post-only orders are immediately added, but they are not executed immediately.
- Limit order – A limit order allows you to place your order at a given price. A buy limit order executes the buy when the price is below or where you set it. A sell limit order executes when the price is higher or where you set it. This order is not a guaranteed execution.
- Stop limit order – A stop-limit order allows the trader to set the amount of money they want to make or are willing to lose. It combines a limit order and a stop trigger. Once you set the stop limit order and the price set is achieved, an order is automatically placed even when logged off the system.
- Market order – When you place an order, it is matched immediately at the best market price. That is a market order.
- Stop market order – A stop market order is similar to a stop limit order in that, after the stop price reaches, the system automatically triggers an order. Still, the order placed is a market order instead of a limit order.
- Trailing stop order – A trailing stop order allows an investor to set the selling trigger point at a given percentage away from the market price. If the market swings upwards, the investor can participate, but an automatic market order is placed if the market moves the opposite way and the trigger point reaches.
Binance wins easily. The amount of options available on Binance caters to every type of investor and investment scenario.
The idea behind cryptocurrency is security and privacy. Both platforms, Coinbase and Binance, have gone to significant lengths to assure the security of their platforms. Unfortunately, Binance has suffered a security breach, and Coinbase has reported being attacked, but the hackers were unsuccessful.
Here are the security measures each platform has employed.
- Built-in wallet – The digital wallet by Coinbase is protected using biometric access and a password. In addition, it has a twelve-word recovery phrase that one can use in case they forget their password. Protecting the wallet is a high priority in the wallets where users store their private keys. If they lose the private keys, they lose their entire crypto assets.
- Two-factor authentication – Coinbase uses SMS or Google Authenticator to send a time-sensitive six-digit code that you have to enter to access your account.
- Cold storage – 98% of the crypto balances in Coinbase are stored in cold storage. Coinbase is the only platform that offers this security feature. Cold storage helps keep assets safe from online thieves.
- Crypto vaults – These vaults secure your assets further. They might require approval from multiple users before completing a transition. If they are time-locked when all the users do not authenticate within 24 hours, the transaction is canceled. Crypto vaults curb fraudulent withdrawals.
- FDIC Insurance – Coinbase is the only crypto exchange platform with FDIC insurance backing. The insurance is up to USD 250,000.
- Sign-up authentication – When one signs up to Coinbase, they have to provide a government-issued ID or driver’s license to be approved.
- Two-factor authentication – Binance uses SMS or Google authenticator to verify its users.
- Advanced verification – Binance requires advanced verification, which includes uploading a government-issued ID or passport and a picture of yourself if one is to make a big transaction. Also, you might opt to submit your advanced verification to ensure no one creates a fake account using your identity.
- Device management – If you use multiple devices, Binance will allow you to review device activity, approve devices you have used, and restrict those you do not recognize.
- Whistling crypto addresses – Whistling addresses is when one can restrict addresses that can withdraw from their account, locking out all other addresses from accessing your cryptocurrency.
Although both platforms have invested significantly in their security, Coinbase gives an edge over Binance since they are better regulated and employ cold storage and crypto vaults.
Fees are the cost of trading on either platform. Both platforms use a maker-taker pricing structure. The maker-taker system classifies the transaction into trades that add to the market liquidity and those that take away liquidity. Maker trades are charged lower because they add to liquidity, while taker trades charges are a little higher.
The other determinant of the fees one pays is dependent on the volume moved. The larger the volume, the lesser the fee charged. For instance, using Binance, a maker transaction of more than $100 million in 30-day volume will be charged at zero percent. While the same taker transaction will be charged 0.06%
Generally, Coinbase charges 0.50 percent per Coinbase transaction. After the charge, there are additional convenience charges that can build up to 4% per transaction.
For a regular user, Binance will charge 0.10% for both a maker and a taker. But if the transaction uses a Binance coin, the traders qualify for a 25% discount which takes the fee down to 0.075%.
With an increase in scale and the Binance coin discount, Binance wins the fees contest.
First, before purchasing crypto, one has to use a fiat currency. For example, Coinbase supports three currencies, the US dollar, the British pound sterling, and the Euro. On the other hand, Binance supports 18 fiat currencies, including the three supported by Coinbase, the Australian dollar, the Hong Kong dollar, and the Indian rupee, among other currencies.
Both platforms support the most common currencies, including:
- Cardano (ADA)
- Litecoin (LTC)
- Ethereum (ETH)
- Bitcoin (BTC)
- Compound (COMP)
- Cosmos (ATOM)
- Storj (STORJ)
- Dash (DASH)
In terms of cryptocurrencies, Coinbase supports 107 currencies on their regular platform and 57 currencies on Coinbase Pro.
Some currencies exclusive to Coinbase include:
- Wrapped Bitcoin (WBTC)
- Aave (AAVE)
- Sushiwap (SUSHI)
- Celo (CGLD)
Globally, Binance supports over 500 currencies but depending on location. Users have a varied number of currencies accessible. In the US, Binance US supports only 80 currencies.
Some of the currencies supported by Binance and not Coinbase include:
- Vechain (VET)
- Harmony (ONE)
- Vethor token (VTHO)
- Dogecoin (DOGE)
- Qtum (QTUM)
Binance takes home this easily because of the variety it offers its users.
Education and Learning Tools
Crypto is just catching up. There is a need for education for anyone to interact with it and transact with it. They have to invest significant time in learning. Therefore, both platforms have invested in putting out learning material for anyone interested.
Coinbase has a blog that publishes all information on cryptocurrencies, trading, and investing. They have also invested in videos that teach more about them. If a user watches and takes a quiz, they stand a chance to win some altcoin.
Whether expert or beginner, you will find information that suits you at Binance academy. Binance Academy is the platform’s site where one can learn everything there is to learn about blockchain and cryptocurrencies.
Both platforms have significant information that one might need to engage with the crypto world. For this one, there is a tie as both sites offer the utmost value.
Binance vs Coinbase: Best Overall
After a comprehensive look into the platform’s features, it is clear that both platforms serve different people. Binance is very advanced and very technical. Therefore, a more crypto-savvy individual would benefit most from Binance. Coinbase, on the other hand, is straightforward and offers simple, clear trading options. These are all a beginner needs. That, coupled with the simple user interface, Coinbase is definitely for beginners.
Both platforms are exchange platforms for cryptocurrencies, and in terms of building a better platform, Binance takes home the price because of the platform’s robustness. There is typically nothing you can’t do on Binance that involves crypto trading and investing.
Best for Beginners
If you are a beginner, go for Coinbase. It is easier to use. It offers straightforward options. It might be a little expensive, but until you become savvy enough to optimize your trades.
How To Sign up for Coinbase
- Go to coinbase.com
- Click on “Get Started”
- Enter your information, including full legal name + proof, date of birth, email address, and your location.
- Check the box and click “Create Account.”
- Verify from the email sent to you
- Sign back in
- Enter required personal information
- Answer some security questions
- Click “Continue” to finish
To secure your account further, you can go ahead and set up a two-step verification before linking your payment method.
Best for Experts
Binance offers over 500 currencies to trade. In addition, it offers multiple trading and order options. So if you are an expert and have the know-how to work the market, the Binance is for you. You will curate trades and set up orders exactly as you’d like. In addition, there is a huge 25 percent discount when you transact using the Binance coin.
How to Sign up to Binance
- Go to Binance.com
- Click “register”
- Choose either Email or Mobile.
- Enter your details
- Click “Create an account.”
- Complete security verification
- Enter the six-digit code and verify
- Congratulations, you have signed up for Binance.
To enhance security, go to security and enable two-factor authentication for Google verification and phone verification.