What is Coinbase?

What Coinbase is, how the app and Advanced trading tiers differ, what KYC and custody actually mean here, and how its fees work in 2026.

Updated August 2026 · Reviewed by the PipeFlare team

Coinbase is a US-listed, regulated cryptocurrency exchange where you buy, sell, and hold crypto with a bank-linked account

It's one of the most widely used dollar-to-crypto on-ramps, especially for first-time US buyers

About what is coinbase

Coinbase is a US-based, publicly traded cryptocurrency exchange where you can buy, sell, and hold crypto using a bank account, debit card, or existing balance. Coinbase Global, Inc. has traded on the Nasdaq under the ticker COIN since a direct listing in April 2021, and the company holds a New York BitLicense along with money-transmitter licenses in most US states. By default, Coinbase is custodial — when you buy crypto on the app, Coinbase holds the private keys on its own servers, and you hold a login rather than the keys themselves. That's a different product from Coinbase Wallet, a separate self-custody app where you do control your own keys.

How it actually works

Signing up requires identity verification (KYC) before you can trade or withdraw, in line with US financial regulation. Once verified, you fund your account by linking a bank account, debit card, or wire transfer, then buy or sell crypto through one of two very different interfaces. The simple Coinbase app bakes a spread and a separate fee into each trade, aimed at first-time buyers who want a straightforward flow. Coinbase Advanced (formerly Coinbase Pro) is an order-book interface with transparent, much lower maker/taker fees that scale down with your trading volume — see Coinbase fees explained for the current rate structure. A Coinbase One membership can waive trading fees for a monthly cost. Coinbase also offers in-app staking for supported assets like ETH and SOL, where Coinbase runs the validator infrastructure and takes a commission from the rewards.

Because the standard account is custodial, anything you hold on Coinbase is subject to counterparty risk — Coinbase's own solvency and security, not just the underlying asset's. Coinbase states that it keeps the large majority of customer crypto in offline cold storage and maintains crime insurance covering a portion of its hot-wallet holdings; USD balances held via its cash product are separately eligible for FDIC pass-through insurance up to standard limits. To move to self-custody, you withdraw crypto from Coinbase to a wallet where you hold the keys yourself — Coinbase Wallet, a hardware wallet, or another self-custody app.

Start here

1Create an account and complete identity verification (KYC) — this is required before you can trade or withdraw.
2Link a funding method: bank transfer, debit card, or wire.
3Decide which interface fits you: the simple app for a first small purchase, or Coinbase Advanced once you're trading larger amounts and want lower fees.
4For anything you plan to hold long-term, consider withdrawing to a self-custody wallet you control rather than leaving it on the exchange.

Strengths

Nasdaq-listed public company (COIN) with US regulatory registration, which brings public financial disclosure most private exchanges don't provide.
Simple, beginner-friendly app for a first crypto purchase, with Coinbase Advanced available once you want lower, transparent fees.
Broad fiat on-ramp support (bank transfer, card, wire) and in-app staking for major assets.

Common misunderstandings

The default app's fees run well above Coinbase Advanced for the same trade — check which interface you're actually using.
It's custodial by default: you don't hold the private keys unless you withdraw to your own wallet.
Not available in every country or every US state, and some features vary by region.

Common questions

What is Coinbase used for?

Coinbase is used to buy, sell, and hold cryptocurrency using regular bank funding methods, and to earn staking rewards on supported assets. It functions as the on-ramp between dollars (or other fiat currencies) and crypto for many first-time buyers, and as a trading venue for more active users via Coinbase Advanced.

Is Coinbase the same as Coinbase Wallet?

No. The main Coinbase app is a custodial exchange account — Coinbase holds the private keys and you hold a login. Coinbase Wallet is a separate, self-custody app where you control your own private keys and seed phrase. You can use one, both, or move funds from the exchange into Coinbase Wallet for self-custody.

Does Coinbase require ID verification?

Yes. Coinbase requires identity verification (KYC) — typically a government ID and personal details — before you can deposit, trade, or withdraw, in line with US financial regulations. See What is KYC? for how that process works generally.

How do Coinbase's fees work?

Coinbase runs two fee structures under one account: the simple app bakes a spread plus a separate fee into each trade, while Coinbase Advanced charges transparent, lower maker/taker percentages that scale down with trading volume. See Coinbase fees explained for the current numbers, since rates change.

Is Coinbase safe?

Coinbase is a Nasdaq-listed, SEC-reporting, NY BitLicense-holding company that states it keeps most customer crypto in offline cold storage and carries crime insurance on a portion of hot-wallet holdings; USD cash balances are separately eligible for FDIC pass-through insurance up to standard limits. No exchange is risk-free, though — the standard account is custodial, so you're trusting Coinbase's security and solvency rather than holding the keys yourself. See /learn/cold-wallet-vs-hot-wallet for the self-custody alternative.

What's the difference between Coinbase and Coinbase Advanced?

Coinbase (the default app) is the simple buy/sell screen aimed at beginners, with a spread and fee built into the quoted price. Coinbase Advanced is an order-book trading interface on the same account, with transparent, much lower maker/taker fees for the identical asset. Both use the same login and the same underlying custody — Advanced is just a different, cheaper way to trade.

Sources

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