In summary
Coinbase wallet supports a massive number of coins and is well designed to make it easy for new crypto investors who want to take ownership of their key storage.
Coinbase Wallet explained
Coinbase Wallet is a smartphone app offering self-custody storage for investors’ public and private crypto keys, which are used to make trades. Coinbase Wallet also exists in the form of Chrome browser extension, though it has limited features.
This is different to an investor storing keys with a crypto exchange directly under a custodial arrangement. Coinbase says self-custody gives users “complete control” of their crypto holdings, and arguably makes it harder for hackers to steal users’ keys.
The app is secured with two-factor authentication (2FA) to protect users’ accounts.
Coinbase supports “hundreds of thousands” of coins, tokens and decentralised apps (dApps).
The app also has a web browser for access to the decentralised web, giving users access to decentralised exchanges (DEXs) and decentralised autonomous organisations (DAOs).
Advantages of Coinbase Wallet
In terms of wallet providers, Coinbase Wallet has an unparalleled breadth of support for coins and tokens. It’s compatible with all ERC-20 tokens, of which there are hundreds of thousands, and it can also be used to store keys to Dogecoin and Litecoin holdings.
The wallet integrates directly with the Coinbase exchange, meaning users can execute trades directly from the app. It also offers integration with Ledger hardware wallets.
For those wishing to make money from their crypto holdings, Coinbase Wallet allows users to stake Ethereum, Polygon and The Graph.
Being a Coinbase product, there’s a wealth of educational material available to help users understand various crypto-market concepts and technologies.
The app is also free to use, though transaction fees apply to any trades investors make via the Coinbase exchange using the app.
Disadvantages of Coinbase Wallet
Coinbase Wallet no longer supports Bitcoin, the world’s first and biggest cryptocurrency.
When a user stores their keys in a custodial wallet, they can’t rely on any support to regain access if they were to lose their login credentials. With a custodial wallet, users can simply go through their provider’s password recovery process. As such, a lost password could mean lost keys and lost crypto.
This also goes for security. Users’ keys held in Coinbase Wallet are only as secure as the measures they take to keep them safe – ensuring, for example, nobody is able to find their password, or access the devices they use for two factor authentication.
Who might Coinbase Wallet be good for?
Anyone who wants to take custody of their own public and private keys and, perhaps, who already has an account and trades via the Coinbase exchange. The Coinbase Wallet may also be suitable for relative newcomers who want to learn more about crypto markets, technology and trading.
Is Coinbase Wallet safe?
Coinbase Wallet is widely considered safe, so long as users take the proper care of their log-in credentials. A custodial wallet might keep investors’ private keys safer than if they were kept on a non-custodial wallet, but the onus is on the investor to keep their accounts secure.
Coinbase Wallet uses two-factor authentication to secure accounts, which means users need to verify log-in attempts by entering a code sent to their phone or email addresses. If someone were to leave their phone unattended or unlocked, or had a weak password associated with their email address, their account could be compromised.
If a user were to lose their seed phrase (a string of random words used to unlock a wallet), they would risk losing access to their account. It’s crucial, therefore, that users keep secure, secret, hard copies of their seed phrases.
Other good security hygiene includes not connecting to unfamiliar wifi networks, using biometric security where possible and keeping an eye out for scam messages and emails claiming to represent Coinbase Wallet.
Alternatives to Coinbase Wallet
Forbes Advisor has assembled a list of what we believe are the best crypto wallets, including Uphold and eToro.
Hardware or ‘cold’ wallets are another option. These USB devices provide an additional layer of security as they aren’t connected to the web by default, making it harder for hackers to breach them. Once plugged into a web-connected computer however, some of that additional security may be compromised.