BlockFi vs Coinbase: Trading, Fees, Altcoins, Security

Bitcoin Exchange

The rise in the popularity of cryptocurrencies has also increased the usage of crypto exchanges. Other than the sale and purchase of crypto coins, crypto exchanges nowadays are also being used to provide different financial services like lending, trading, and investment.

Coinbase and BlockFi have become very popular in this category. This article will give a brief overview of both the exchanges, discuss their pros and cons, and provide their comparison to help you choose an exchange that best meets your needs.

Key Takeaway

One of the distinguishing features of BlockFi is that they offer borrowing and lending services in cryptocurrencies. However, the exchange is quite limited in terms of supported crypto coins. Their main products are interest accounts and crypto-backed loans. Other than this they have also launched a crypto rewards card.

On the other hand, even though Coinbase is larger and more beginner-friendly, its downside is its relatively high fees. However, it has an easy-to-use app and offers a range of features including staking, educational rewards, and limited crypto-backed loans. Also, Coinbase supports more than 100 different crypto coins.

To sum up, BlockFi’s standing out features are its interest accounts, crypto loans, and commissions and fees. Whereas Coinbase can be regarded for its cryptocurrency trading, ease of use, and excellent research.

Products Overview


Both BlockFi and Coinbase are well-known cryptocurrency exchanges based in the US and allow investors to trade significant crypto coins. Furthermore, both of these exchanges offer an easy-to-use design and reasonable fees. Among the two, BlockFi is famous for its interest accounts. Through these accounts, users can earn daily interest on their crypto holdings. On the other hand, Coinbase supports more than 100 cryptocurrencies, and its Coinbase Pro platform offers additional trading features and lower trading fees.

Table of Contents

    Coinbase


    Coinbase is amongst the oldest cryptocurrency exchanges and the earliest adopters and providers of various cryptocurrency-related products. In terms of trading volume, Coinbase can be considered as one of the largest cryptocurrency exchanges in the world and is only beaten by Binance in this regard. Over the years, it has gained an excellent reputation for providing industry-leading security.

    Furthermore, especially for the crypto traders and investors in the US, it is considered one of the best ways to purchase Bitcoin. Over the years, it established its reputation in the industry and partnered with various mainstream companies like Dell, Overstock, Time Inc, etc. These partnerships have helped Coinbase establish itself as one of the most trusted organizations in the cryptocurrency community. Coinbase is a good fit for crypto investors and traders of all skill levels who want a solid all-around platform for buying, storing, and selling cryptocurrencies.

    Advantages

    • Top-rated mobile app
    • Advanced trading platform
    • Earn free crypto
    • Offers Coinbase debit card
    • New users can earn free crypto through coinbase.com/learn
    • User-friendly design with simple buy/sell buttons and clearly indicated prices
    • Large selection of crypto assets and tokens
    • Have their own stable coin (USDC)

    Disadvantages

    • High fees on standard Coinbase platform & Complex fee structure
    • Fees are right in the middle of industry standards
    • No ability to earn interest on holdings
    • Significant identity verification required
    • Potentially high transaction fees
    • Customer service issues
    • No access to trade many altcoins
    • No interest-bearing crypto accounts

    BlockFi


    BlockFi was launched in 2019 and, within a short period, has gained the reputation of being among the world’s most well-known crypto lending platforms in the market. Before its launch, BlockFi raised more than $60 million in funding. It is considered one of the pioneer platforms that offered users interest over their cryptocurrencies.

    BlockFi can be considered a crypto native neobank as it allows its users to either take out loans or earn interest on their crypto holdings. It also offers an exclusive Visa card that gives rewards in Bitcoin, the ability to purchase cryptocurrency directly, and no fee swaps between any of the supported cryptocurrencies.

    BlockFi offers a cryptocurrency exchange, interest-bearing accounts, and low-interest-rate loans worldwide. Furthermore, there are no transaction fees on trades, and hence one doesn’t have to worry about hidden fees or minimum balances. BlockFi can be considered a good fit for beginner and intermediate cryptocurrency investors who want to bridge the gap between cryptocurrencies and traditional finance.

    Advantages

    • U.S.-based and regulated
    • Instant trades & No commission fee. Plus, no monthly fees or minimum deposits
    • Available worldwide, except sanctioned or watch-listed countries
    • User-friendly design with simple buy/sell buttons and clearly indicated prices
    • Not required to lock up crypto for a set period of time
    • Integrated exchange with zero fees for swaps of supported assets
    • Lenders earn compound interest on deposits
    • You can choose the cryptocurrency in which they earn their interest
    • BlockFi Visa Card that offers Bitcoin rewards

    Disadvantages

    • No joint or custodial accounts
    • Limited free withdrawals from interest accounts
    • Savings aren’t protected against bank failure
    • APY (Annual Percentage Yield) and loan rate volatility
    • Each withdrawal is charged a flat fee, with the exception of one free withdrawal per month.
    • A limited number of cryptocurrency assets are supported
    • Withdrawals may take longer than with other platforms
    • Hot wallet (not your keys, not your crypto). It’s that simple.

    What’s the difference between Coinbase and BlockFi?


    For a casual observer, at first sight, it can be thought that both Coinbase and BlockFi are pretty similar. However, certain features may differ, for example, the fees charged by either of them, choices available for investment, and crypto products.

    Features Comparison 


    Below we provide a comparison of the major features offered by both products. 

    Beginner Friendliness


    Both Coinbase and BlockFi are designed to be very beginner-friendly. They offer mobile apps to enable users to sign up from their phones quickly. Nevertheless, BlockFi does not allow its users to purchase cryptocurrencies using credit cards when it comes to the ease of purchasing.

    On the other hand, Coinbase allows purchasing crypto using credit cards, making it a slightly more beginner-friendly option. Both Coinbase and BlockFi have user interfaces designed to navigate and utilize. In terms of ease of use for a beginner, both the platforms have similar degrees of friendliness and hence can choose either of them based on their preference.

    Security and Trust


    In terms of security, none of the two platforms, BlockFi nor Coinbase, have ever been successfully hacked. However, in spring 2020, there was a SIM card swap incident for BlockFi however it resulted in zero funds lost.

    Both platforms offer two-factor authentication (2FA) and IP logging in terms of mobile app security. Furthermore, both platforms hold most of their users’ funds in cold storage to avoid hacks due to internet connectivity. Coinbase holds up to 98%, and BlockFi holds up to 95%. Coinbase furthers its users by providing FDIC’s insurance of up to $250,000 on cash deposits. Furthermore, Coinbase privately ensures all other assets are held online.

    The remaining 5% of users’ funds of BlockFi are held in hot wallets insured by Aron. However, they do not offer FDIC insurance over their funds/assets. To ensure their wallets are regulatory compliance, BlockFi wallets are provided by Gemini Exchange. Gemini Exchange is one of the top American exchanges known for regulatory compliance.

    Both platforms offer their users an almost equal level of assurance concerning security. However, since no case has ever been reported since its launch, nearly a decade, Coinbase can be considered a better choice in this regard.

    Fees


    Fees comparison between Coinbase and BlockFi can be divided into different parts. In terms of trading fees, BlockFi is a better option than Coinbase as they do not charge their users any fees for swapping cryptos. Furthermore, it also provides up to a 1% spread which is still less than the maker fees on Coinbase. At the same time, both platforms are equal and do not charge their users regarding the deposit fees. 

    In case of fees charged upon withdrawals, Coinbase only charges its users with the blockchain network fee and no other additional charges on every withdrawal. On the other hand, BlockFi offers its users one free withdrawal in stablecoins and one free withdrawal per calendar month for other cryptos. If these free withdrawals are availed, users have to pay a significant fee for withdrawing various assets on BlockFi. The fee for Bitcoin is over USD 30 for any withdrawal amount and USD 60 for Ethereum.

    Sign-Up Process


    Both Coinbase and BlockFi offer quick and easy sign-up processes. However, both of them require complete identity verification for the usage of their platforms. For identity verification (KYC process), users are supposed to provide personal information like name, address, personal identification (driver’s license, passport, national identity card, etc.), and a recent photograph.

    Supported Cryptocurrencies


    In terms of supported cryptocurrencies, there is absolutely no contest between the two. This is because BlockFi supports just 13 total cryptocurrencies. Coinbase has extensive support for more than 100 different crypto coins and tokens that its users can purchase and sell. In this regard, if you are a user who is looking for a platform with the most selection of assets, then Coinbase should be your choice. However, besides Bitcoin and the most popular stablecoins, BlockFi also offers many top Ethereum-based assets like Uniswap (UNI), Chainlink (LINK), etc.

    Mobile App


    Both Coinbase and BlockFi provide mobile apps for Android and iOS devices. Users can access their accounts and trade cryptos using these mobile apps. As both the companies primarily focus on beginner-level users, one fails to find any advanced charting or profit and loss information on these mobile apps. Instead, the apps are designed to be straightforward and beginner-friendly and allow users to buy or sell cryptos directly from their mobile phones. 

    In addition to this, BlockFi also offers its users to view their BIA account or apply for a loan through their mobile application. 

    Access in terms of supported regions


    Coinbase is available in 49 states in the USA, excluding Hawaii. It is also available in Canada, the United Kingdom, Singapore, and 39 European countries. However, New York residents have a specific restriction to purchase certain crypto coins.

    On the other hand, BlockFi is available in all the 50 states in the USA and international locations, except for the countries sanctioned by the United States. However, the trading of popular cryptocurrencies using BlockFi is only available in 45 states. Also, the BlockFi Interest Account (BIA) isn’t known for New York residents. Furthermore, USDT is only open to non-U.S. residents as a stablecoin trading pair.

    Furthermore, access to BlockFi products varies from state to state. For example, in states where wire transfer or ACH isn’t available, BlockFi suggests depositing crypto into your BlockFi account, sending USD to Gemini or Coinbase, and funding your BlockFi Account with GUSD (Gemini’s stablecoin) or USDC (Coinbase’s stablecoin).

    BlockFi Product or Trading PairsNot Available in These States or Territories
    BTC/ETH/LTC/PAXG Trading Pairs Kentucky, New Mexico, New York, Vermont, and West Virginia 
    Stablecoin Trading Pairs Arkansas, Iowa, Louisiana, Maine, Mississippi, North Dakota, New Mexico, New York, Vermont, and West Virginia 
    Fiat Wire or ACH Transfers Delaware, Guam, Iowa, Louisiana, Maine, Mississippi, North Dakota, New Mexico, Nevada, New York, South Dakota, Vermont, and West Virginia 
    Business Loans Gaum, North Dakota, South Dakota, and Vermont 
    Consumer Loans Iowa, Idaho, Louisiana, Mississippi, Montana, Nevada, South Dakota, and Vermont 

    Standout Features of Coinbase and BlockFi


    Below are some distinguishing features offered by either of the two exchanges.

    BlockFi


    • BlockFi Interest Accounts

    One of the distinguishing features of  BlockFi is their BlockFi Interest Accounts (BIA). Users can earn interest on their crypto funds or stablecoins holdings of up to 8.25% APY through BIA accounts.

    • BlockFi Visa Credit Card

    BlockFi offers a BlockFi Visa Credit card which is currently one of the only crypto credit cards. The card gives users a 1.5% cashback reward in Bitcoin for all spending. Furthermore, users can earn 2% once they have spent USD 50,000 over one year.

    Coinbase 


    • Coinbase Card

    Even though it is not a credit card, Coinbase allows its users to earn crypto rewards for their spending through this card. The Coinbase Card is a Visa Debit card through which users can spend their Coinbase holdings anywhere Visa is accepted. Coinbase also offers up to 4% in crypto rewards for your spending using their Coinbase Card.

    • Coinbase Earn and Staking

    Coinbase Earn is a way to earn free crypto rewards for taking short lessons on specific cryptocurrencies. Assets are then immediately sent to users who can do what they please with their rewards. Staking is available for certain assets and lets you earn interest on your held crypto assets.

    Coinbase vs BlockFi: Quick Comparison 


    CoinbaseBlockFi
    HeadquartersSan Francisco, USANew York, USA
    Company TypeBroker exchange, easy buy & sell optionsLending, trading, interest-bearing accounts
    FeesUp to 0.50% spread per trade, 2% for credit card purchases, and 1.49% for Coinbase wallet or bank account purchases. 0-0.5% for Coinbase ProNo fees on trades but up to 1% price spread per trade
    SecurityTwo-step verification, FDIC-insured USD balances up to $250,000, bug bounty program, platform insurance against theft, and cold storage.Two-factor authentication (2FA), cold storage, insurance on hot storage, and a bug bounty program
    Beginner FriendlyYesYes
    Verification RequiredYesYes
    Supported Cryptocurrencies100+13
    Proprietary TokenYes (USDC)No
    On-site WalletYesYes
    Wallet typesAES-256 encryption, whitelisting, and multi-signature walletsAES-256 encryption and allow listing
    Buy/Deposit MethodsDebit Card, Bank Transfer, CryptoBank Wire Transfer, Cryptocurrency
    Sell/Withdraw MethodsBank transfer, PayPal, cryptoBank Wire Transfer, Cryptocurrency
    Year Established20122019
    Fiat TradingYes Yes (Stablecoins)
    Gold or Other Precious MetalsNoNo
    Transactions SupportedBuy, sell, exchange, send, withdraw, and receiveBuy, sell, exchange, send, withdraw, and receive
    Max. Trading AmountBased on the user’s account size and historical activity, and varies by customer.Limits vary based on your payment method and region
    Mobile AppAndroid and iOSAndroid and iOS

    Final Verdict


    Our final verdict is that Coinbase is a better choice for trading cryptocurrencies and assets from the above provided. Whereas, BlockFi can be used for Hodl-ing your crypto assets and funds. Nevertheless, when it comes to deciding between Coinbase and BlockFi, it depends on the user’s intent regarding their primary reason for using a particular platform.

    Suppose a user is interested in trading on a platform that supports multiple cryptocurrencies or offers staking while also spending your holdings with a Visa Debit card. In that case, Coinbase is undoubtedly the right choice.

    However, suppose a user is interested in earning interest on their crypto holdings for Bitcoin or Ethereum and wants to have a crypto credit card that gets rewards in Bitcoin cashback. In that case, BlockFi is the right choice that you should be looking at. Furthermore, both platforms are highly secure and user-friendly.

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