Introduction
Choosing which cryptocurrency exchange to use for your activities within the blockchain scene is an important decision. Different platforms provide varying services, cover a range of geographic locations, and charge a variety of prices. A good exchange is a matter that is subjective to the user as one platform may have features that are essential to one person and non-essential to another. Other exchanges may be a perfect fit but not available within the users’ jurisdiction. There’s a lot to consider when determining and comparing several crypto exchanges, and in this guide, we are focusing on two of the most popular exchanges: Coinbase (COIN) and Binance. It’s likely that you have access to one or both of these exchanges, depending on your requirements and where you live in the world. They are both popular for different reasons. One is recognized for being well established in a highly regulated jurisdiction, while the other is known for offering almost all the features that their users need while making them available to a wider audience. To determine which one may be better for your given situation, we will consider what each platform offers, including its features and services, how much they charge their customers, the security of the platform, and adherence to regulatory provisions. We will also look at each exchange’s pros and cons and deliver a final verdict. Continue reading to find out which platform, out of Coinbase and Binance, maybe a better fit for your cryptocurrency exchange needs.
Coinbase vs. Binance: Overview
Coinbase is one of the earliest crypto exchanges dating back to 2012, a time when Bitcoin exchanges were few and far between. It was co-founded by Brian Armstrong, who is serving as its current CEO, and Fred Ehrsam, a board director of the now publicly-traded company. The exchange is well known for its intuitive user interface and strict adherence to regulatory provisions in the United States and other jurisdictions in which it is operating. It is one of the few digital asset companies to receive the highly sought-after BitLicense that allows such companies to operate within the state of New York. Formerly a San Francisco-based company, Coinbase is considered one of the safest crypto exchange platforms buoyed by its impressive record of keeping its customers’ assets safe. Couple that with the fact that it has existed for close to a decade in the blockchain scene, and you can begin to understand why it is one of the most trusted places to buy, sell and exchange digital assets. On the other hand, Binance is a relatively much younger platform only launched in 2017, before the ICO-mania of late 2017 to early 2018. The exchange was co-founded by its current CEO Changpeng ‘CZ’ Zhao and Yi He in China but later moved to Japan then Malta. It currently operates without a headquarter due to regulatory challenges. Binance rose to prominence due to its aggressive product and jurisdiction expansion strategy, making it one of the widest accessible crypto exchange platforms. Additionally, Binance offered its services at highly competitive rates beating out its competitors to the punch. In 2019, Binance announced a security breach in which it lost 7,000 BTC (worth about $40 million) from its hot wallet, allegedly representing about 2% of total assets. However, the exchange absorbed the loss and refunded all affected users in full. Despite such a setback, the exchange has become a leader in the space and consistently reports the highest daily trading volume of any exchange. Additionally, according to Finbold data sources, it’s also recording class-leading web traffic figures amongst its peers. For instance, in October 2021, more than 171 million web users visited the Binance website compared to its closest competitor, Coinbase, with 91 million visitors.
Coinbase vs. Binance: Features & Services
This section looks into the products and services offered by each exchange. Even though they are both considered crypto exchanges, they offer varying value addition products that complement their core services.
Coinbase products and services
Brokerage: Coinbase’s main service is to enable its users to buy and sell their digital assets, but instead of swapping these assets with other users, the exchange takes the other end of the deal. Trading: the exchange has a complementary professional-oriented crypto exchange called Coinbase Pro, which has features such as trading and charting for advanced users. Earning: Coinbase users have a chance to earn small amounts of cryptocurrency by participating in the Earn program. The program is usually offered in partnership with third-party blockchain projects to incentivize prospective users to engage and learn about them in exchange for some tokens/coins. Staking: Coinbase enables its users to stake their assets within networks that support staking as a consensus mechanism to earn rewards for their efforts. Currently, six blockchain networks are supported, and the service is only limited to a few jurisdictions. Wallet: With Coinbase, users can store their assets within their exchange account or use the self-hosted Coinbase-branded standalone wallet app available as a web or mobile app for iOS and Android. Coinbase Card: The exchange currently allows some of its users to apply for a Coinbase debit card through which they can spend balances held within their Coinbase accounts. The debit card offered in partnership with Visa can be used to spend crypto in millions of places globally. Coinbase Borrow: Coinbase allows users to borrow cash using their crypto deposits as collateral for the loan, saving them from selling off their assets to get liquid cash. USDC stablecoin: Coinbase has partnered with the Circle organization to launch a US Dollar stablecoin called USD Coin (USDC), whose value tracks the fiat Dollar in a 1:1 ratio. The USDC asset can be used for value exchange across the expansive cryptocurrency ecosystem. Several other products are offered to Coinbase’s professional clientele and developers, including Custody, Prime, Analytics, Commerce, Ventures, Cloud, Connect, Rosetta, and Bison Trails. Note: To know more about Coinbase, be sure to read our in-depth Coinbase review. [coinbase]
Binance Products and Services
Trade: As a cryptocurrency exchange platform, trading is Binance’s core product allowing its users to buy, sell and trade digital assets both directly with one another or with the company as a brokerage service. Binance also offers several other trading services, including margin, futures, leverage tokens, over-the-counter (OTC), derivatives, peer-to-peer, and strategy trading. The exchange also offers professional-grade tools for free to its advanced trading clients. Binance Earn: there are several products offered by Binance that allow its users to earn cryptocurrency. These include Fixed and Flexible Savings, ETH2.0 staking, DeFi Staking, Binance Launchpool, and Liquid Swap. These products are available to both individual and institutional investors. Binance mining pool: mining is the process of competing to solve arbitrary puzzles for a chance to create blocks on the blockchain. Binance offers its users a mining pool through which they can combine their computing power, mine together, and share the rewards of their combined efforts. Binance Visa Card: Like the Coinbase Card, the Binance Visa Card is a debit card allowing Binance users in select jurisdictions to spend their crypto in millions of places that accept Visa payment cards globally. Binance Launchpad: The Launchpad is Binance’s investment platform whereby new blockchain projects are pitched to prospective investors on Binance. The exchange helped popularize the concept of an initial exchange offering (IEO), a phenomenon that followed the controversial ICO-mania. Binance Pay: a recent addition to the Binance family of products, the Binance Pay is the exchange’s answer to PayPal. It is a solution to promote cryptocurrencies’ use for e-commerce purposes. Users can pay through their Binance account for everything from online shopping, traveling and booking hotel rooms, and buying gifts. All these are offered at zero processing fees. NFT Marketplace: Non-fungible tokens (NFTs)have been trending for the better part of 2021, and Binance opted to take advantage of this market shift to launch their NFT marketplace and platform, allowing users to buy, sell, trade, and create NFTs within their Binance accounts. Academy: Binance has invested a lot in the creation and dissemination of crypto-related content both for educational and entertainment purposes. The content on the Binance Academy section is ideal for beginners and experts. Trust Wallet: Binance encourages its users to store their assets on their online accounts because they have more utility within the exchange than they do with an offline wallet. However, anyone wishing to store their assets elsewhere on a self-hosted wallet can do so on the Binance-owned Trust Wallet available for mobile platforms. Recurring Buy: Binance has recently introduced an automated crypto purchasing feature through which its users can buy their favorite coins/tokens at regular time intervals for a predetermined amount. Binance is constantly launching new products and services through its #Buidl campaign. We haven’t mentioned other features in the list above, such as the new blockchain network called Binance Smart Chain (BSC), on which developers can launch smart contracts. There’s also a native cryptocurrency Binance Coin (BNB), facilitating value exchange across the entire Binance ecosystem. Evidently, there’s a lot more than Binance offers than its US-based counterpart Coinbase. Note: To learn more about Binance, check our comprehensive Binance review. [binance]
Coinbase vs. Binance: Coverage & Coins Supported
Both Coinbase and Binance are global exchanges with customers from several countries. Coinbase currently offers its services to customers from a hundred countries, but Binance has a wider reach at over 180. It’s worth noting that due to Binance’s regulatory situation, it has experienced incidents where authorities have banned it in countries where it previously operated. This happened a lot in 2021, but even then, it still enjoys a wider coverage than Coinbase. In the United States, where Binance was previously operating, it had to exit the market due to regulatory violations. It, however, launched a stripped-down version of its global platform called Binance America (Binance.US) to cater to the needs of its US-based customers. The new entity now operates in all US states except Connecticut, Hawaii, Idaho, Louisiana, New York, Texas, and Vermont. The number of cryptocurrencies supported on either platform varies, with Binance Global offering over 500 digital assets while its US-based subsidiary offers around 65 assets compared to Coinbase’s ~100.
Coinbase vs. Binance: Fees & Costs
Binance grew in popularity within its first year to become one of the leading cryptocurrency exchanges, partly due to its attractive pricing model. At the start, it offered a 50% discount on trading fees for any transaction paid for in BNB. According to the Binance whitepaper, this discount was scheduled to drop by half every year to hit zero, but the exchange opted to maintain it at 25%. Even without claiming the discount, Binance users pay lower fees than most trading platforms at a high of 0.1%. HIgher volume traders get to enjoy lower rates of up to 0.02%. With the discount accounted for, this figure is further reduced to a low of 0.015%. Binance uses a maker/taker pricing model whereby costs are cheaper for liquidity providers (makers) compared to the liquidity takers. The same pricing model applied on the Binance global platform is the same that is applied on the Binance.US subsidiary. Note: For more information on the expenses associated with utilizing the exchange, please check our in-depth Binance Fees Explained guide. In comparison, Coinbase has extremely high fees across all its products. The exchange charges flat fees ranging from $0.99 to $3.99 for crypto sales and purchases in the consumer-facing brokerage platform. Trading transactions are charged 0.5%, which is at least 5X more expensive than the same transaction on the Binance platform. Other fees, including bank account deposits, withdrawals, debit/credit card transactions, and wire transfers, are just as expensive. It’s worth noting that with Binance, crypto deposits and withdrawals are free while the latter are charged on Coinbase. The advanced trading version of Coinbase, Coinbase Pro, offers much fee friendlier terms with trading starting from as low as 0.1% to a high of 0.25%, which is fairer and more competitive to several other US-based exchanges. Binance’s America outfit, however, still manages to outclass its direct competitor by matching the global platform’s fee schedule. Note: Please see our thorough Coinbase Fees Explained guide for more information on the costs associated with using the exchange.
Coinbase vs. Binance: Compliance & Regulations
The one place that Coinbase shines against its counterpart is in the regulations and compliance department. Coinbase may have opted for a remote-first work environment, but it is firmly grounded in compliance with local and international financial regulations. Coinbase is one of a handful of virtual asset service providers (VASPs) authorized to operate in the state of New York by the New York Department of Financial Services (NYDFS). Its services are accessible across the United States and 100 other countries. In contrast, Binance has a more obscure background. It was first launched and based in China in 2017 but moved its headquarters to Japan to avoid regulatory bottlenecks. Later it again moved to Malta for similar reasons. Currently, the leading exchange by daily reported trading volume has no headquarters, and few know where the CEO operates the company. Due to its regulatory arbitrage techniques, it has faced a lot of backlash from regulators in some countries it has been operating, such as Singapore, parts of Europe, and the United States. Investing in Binance, even as a user, can be considered risky given the regulatory uncertainty of not knowing whether you will be able to continue using the platform in the future.
Coinbase vs. Binance: Security
Security is and ought to be a matter of priority to most cryptocurrency investors, and the good news is that both Coinbase and Binance have implemented robust security systems and offer their users some of the best tools to secure their accounts. Here are some of the ways each platform approaches the security issue:
Coinbase security measures
Second-factor authentication (2FA): involves using an extra verification method such as email, SMS, or an authentication app as an addition to the conventional username/password combination. Cold storage: Coinbase claims that as much as 98% of all assets under its management are kept in cold storage in secure vaults and safety deposit boxes. Multi-party signatures: Coinbase allows its customers to set up multi-signature withdrawals, a security feature whereby multiple individuals or accounts have to provide approval before a withdrawal is processed. Additionally, there is a delayed withdrawal time-lapse, allowing the possibility of canceling a transaction. Biometric verification: this feature is implemented on the Coinbase mobile apps and its standalone mobile wallet app. Deposit insurance: We mentioned earlier that Coinbase keeps 98% of its assets in cold storage. The Federal Deposit Insurance Corporation (FDIC) has insured the remaining 2% that is held on hot storage media to the tune of $250,000. KYC compliance: as a mandatory security provision, all regulated exchanges, including Coinbase, need to comply with know-your-customer (KYC) measures to curb money laundering and unauthorized account access and usage. Note: For a comprehensive overview of all of the platform’s security and safety standards, please see our Is Coinbase safe? guide for beginners. Please refer to our Coinbase KYC guide if you just want step-by-step instructions on how to finish the verification process.
Binance security measures
2FA account security: the second-factor authentication measures are almost basic at this point for every cryptocurrency exchange to implement, and Binance is no exception. With Binance, you can enable 2FA for email, SMS, and Google authenticator app. Withdrawal address whitelisting: there is a provision within your Binance account to enable address whitelisting whereby only identified and approved addresses are used for withdrawal. Any new addresses added have a 48-hour time gap before they are effective for usage. Device management: Binance has a device management settings section where the account holder can view all devices accessing the account and choose to limit or prohibit their access. Advanced verification (KYC): Binance uses tiered verification whereby users can provide more information about them whenever they need to access more features or transact higher volumes. Asset insurance: Binance global platform insures its users’ assets through a program dubbed Secure Asset Fund for Users (#SAFU). The same insurance program covered the $40 million May 2019 hack. Its US-based subsidiary employs the same FDIC coverage as Coinbase does. Universal 2nd Factor (U2F) authentication: for added security, Binance has enabled the U2F feature where a user can use compatible physical authenticators such as Yubico to gain access to their accounts. This feature is considered an advanced 2FA, and both can be used together if the user wishes. Note: Please refer to our how-to secure your Binance account guide for a full review of all of the platform’s security and safety measures. For step-by-step instructions on how to complete the KYC procedure, please refer to our Binance KYC guide for more detailed information.
Coinbase vs. Binance: User Experience
When it comes to cryptocurrency exchanges, Coinbase boasts one of the most user-friendly interfaces available. It is simple and intuitive, making it ideal for beginners to navigate. The limited features offered by the platform make it possible to offer a clean interface devoid of any unnecessary clutter that may overwhelm users. Even the pro version of the exchange, Coinbase Pro, is more user-friendly than other advanced trading platforms. The fluidity and ease of use are shared amongst all the Coinbase interfaces from the consumer, the professional and mobile versions of either platform, to the standalone mobile wallet. In contrast, Binance has a lot going on on its interfaces, from the web to the mobile apps. Given that the exchange offers lots of features, it has opted to segment its interface to several sections to aid easier navigation when using the platform. Sadly the same experience on the web is also transferred to the mobile apps, designed to enable users to access their favorite functions on the go easily. Advanced users may find it less intimidating to use, but beginners have a steep learning curve before comfortably using Binance. However, Binance has recently introduced a ‘Lite Mode’ on the mobile app that makes it less overwhelming especially for those new to crypto. Lite Mode offers a stripped-down experience making it easier to navigate through the app. Additionally, to help beginners trying to learn about crypto, the exchange has a resource-packed knowledge center dubbed Binance Academy that covers everything from using the platform to general crypto knowledge and an exhaustive glossary list. The Binance America subsidiary, with its limited features, is a little easier to navigate, but still, Coinbase is way more intuitive to use.
Coinbase vs. Binance: Pros & Cons
Now that you are familiar with the similarities and differences between the two leading digital asset exchange platforms let’s examine the benefits of using them and their drawbacks.
Coinbase Pros
Highly regulated and therefore available to most US residents; Has a solid security and safety reputation with no single incident since its launch in 2012; The exchange has an intuitive user interface across all its properties, including mobile apps and subsidiaries; Coinbase is available in over 100 countries and growing; It can be accessed on the web and mobile phones on Android and iOS. Its standalone self-hosted mobile wallet has recently launched a web version through which users can interact with web3 applications; Offers services to individuals and institutional clients alike.
Coinbase Drawbacks
Compared to Binance, Coinbase has limited coverage and has fewer assets on offer. However, compared to the US version of Binance, the exchange supports more assets and operates in more states. Coinbase has fewer features. In several countries it operates in, the exchange only supports basic functionalities such as crypto conversions. The exchange charges steep fees for its services, and when compared to Binance, even its cheaper variant, the Coinbase Pro platform is still too expensive to use.
Binance Pros
The biggest selling point for Binance is its low fees. Trading on Binance is so cheap that few other exchanges rival it in this aspect. Binance offers many features, including margin and derivatives trading mining, staking, venture investment, lending, and a robust NFT marketplace. Available to a wider audience and supports over 500 cryptocurrencies. Highly secure and insured for any undesired incidents. Supports several payment options and order types. It is actively improving its service to serve customers better.
Binance Cons
It has a questionable reputation, especially when complying with regulations; In some jurisdictions, such as the United States, the global platform is prohibited, forcing locals to contend with a stripped-down version; Inexperienced users could find the UI of Binance’s trading platform overwhelming/cluttered.
Final Verdict
Both Coinbase and Binance excel in many aspects, but most importantly, they are great digital asset exchanges. Why Coinbase: For most residents in the United States, the better option may be to use Coinbase as the version of Binance that is available to them may be limited by features and coverage even though it may offer cheaper services. Not only that, but also Coinbase offers a beginner-friendly brokerage service compared to Binance. [coinbase] Why Binance: For everyone else living outside the US and in a country that allows Binance operations, Binance has a clear advantage. It is cheap to transact, has more features, wider coverage, gives access to a wider selection of assets, and has a more aggressive product expansion strategy. [binance]
Conclusion
It is easy to get caught up in the conversation of which between Coinbase and Binance is better, but this should not be the case. Both exchanges are very good, as evidenced by their user numbers. Most of the services they offer are similar or slightly different, so that if you can use both, they can serve as complements of each other. For instance, you trade on Binance because it’s cheaper and store your profits on Coinbase due to its security reputation. All in all, you can’t go wrong with either choice, and we always recommend both to our readers.
