by Jake Wengroff
Binance and Coinbase are two of the most widely used online brokerage platforms for cryptocurrencies. Using these platforms, investors can buy, sell and trade Bitcoin and other cryptocurrencies. Both Binance and Coinbase experience the highest volumes of crypto trading activity in the world. But which one is right for you?
Binance vs Coinbase: An Overview
With both, users must first deposit fiat funds, such as dollars or euros. However, each has a different approach and target market. U.S.-based Coinbase is designed to attract newbies with its simple interface, easy-to-use features, and limited transaction types. Coinbase is U.S.-regulated, adding a layer of protection to users.
Binance, on the other hand, supports more advanced crypto traders, providing hundreds of currency trading options, including limit orders, stop-limit orders, market orders, post-only orders and peer-to-peer trading. U.S. customers cannot use Binance; they must use Binance.US, Binance’s U.S. arm. Binance.US is a separate company to Binance, operated by BAM trading services, but bears its name and logo. Only available in 41 U.S. states, Binance.US only offers 52 cryptocurrencies for trade, which is still greater than the number of cryptocurrencies offered by Coinbase and other exchanges.
While the signup process is similar for both, Binance users outside the U.S. do not need to show a photo ID to verify their account (Binance users in the U.S., however, do need to show a photo ID). This lack of the need for photo ID for international Binance users, some believe, can lead to abuse of the system.
It’s important to understand the crucial differences between the two platforms, as we’ve outlined below. Everyone has their own level of experience with Bitcoin and cryptocurrencies, and therefore their own needs.
- More than 500 cryptocurrencies for trade
- One of the most cost-effective platforms to use
- Large selection and availability of transaction types
- U.S. customers can’t use the Binance platform, and Binance.US is very limited
- Difficult to navigate, a steep learning curve, even for experienced crypto traders
- No built-in digital wallet
- Extremely user-friendly platform
- Well-known and trusted by U.S. regulators
- Multiple ways to purchase cryptocurrency to add to a wallet
- Expensive fees for transactions and for use in payments
- Limited advanced options for expert traders
- Fewer transaction types than other platforms
Binance vs Coinbase: A Look at Security
While transaction fees are important when evaluating trading platforms, security is perhaps even more so. Which one will help you recover crypto assets if your account is compromised or your credentials are stolen?
Although both platforms are considered secure, Coinbase is considered safer by many American observers because it is U.S.-based and a publicly traded company. Founded in 2012, Coinbase went public via a direct listing on the Nasdaq on April 15, 2021. Adhering to public company regulations forces Coinbase to maintain stricter financial controls.
Binance was first established in China before moving to Japan, and the Binance-U.S. platform operates out of San Francisco, California. Binance isn’t regulated, so it initially banned all U.S. residents from accessing the platform. However, its Binance-U.S. exchange stays within U.S. regulations.
Both cryptocurrency exchanges provide two-factor authentication (2FA) via the Google Authenticator app or short message service (SMS). While Coinbase requests identification verification from all users via a photo or government-issued ID, Binance only requires this of the U.S.-based users or those wanting to invest and trade larger amounts.
However, Binance’s advanced security features also include address whitelisting, device management, and the ability to restrict device access.
In both Binance and Coinbase, all USD balances are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) and are held in custodial bank accounts.
Coinbase security features consist of fingerprint biometric access for its digital wallet, and 98% of cryptocurrency funds are stored in air-gapped cold storage via vaults and safe deposit boxes.
To help safeguard against compromise, Coinbase has an insurance policy to cover the 2% of funds kept in hot (digital online) storage. However, this insurance policy only covers security breaches on the company’s end, not those resulting from user-related issues.
Changing the Industry by Adding Title to Crypto Assets
While heightened security measures, such as stronger passwords, mobile authenticator apps and vaults, can be utilized, they still do not provide 100% protection against theft or compromise.
Once cryptocurrency is stolen, it is nearly impossible to prove ownership and recover the stolen assets.
TransitNet is close to launching a game-changing infrastructure that will verify the rightful ownership of cryptographic assets. As an additional layer of protection and record-keeping for cryptocurrency assets, crypto investors will soon be able to access the first of its kind of off-chain title registry of record for digital wallets.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce, and IoT.
Investopedia – Binance vs Coinbase