It’s been 6 years since the cryptocurrency trading platform Coinbase was established, and in that time they have managed to rack up an impressive 10 million users, and have traded more than $50 billion. That in itself tells a story of its own. Different from its competition, Coinbase offers its users the opportunity to trade digital currencies at a set price, based on their market value, allowing users to make faster purchases that other cryptocurrency exchanges. This is just one of the Coinbase features that have made them one of the most popular and used platforms on the web today. But just is Coinbase safe in 2018?
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When it comes to securing their users’ data, the Coinbase app uses multiple layers of protection, starting with the storage of their users personal and sensitive data done on an offline server. The disconnection from the internet protects this sensitive information from the threat of hackers. As an additional security measure, Coinbase splits this information with redundancy, and is encrypted, before being copied onto paper back-ups and USB drives.
These paper back-ups and USB drives, along with 98% of their customers’ funds, are then distributed to various vaults and safe deposit boxes across various geographical locations throughout the world.
As an organization, Coinbase ensures that the people that they employ do not have a history of criminal activity, use strong passwords, enable screen locking on their computers, as well as encrypt the hard drives that they use. In addition to these measures, customers are also required to make use of the two-factor authentication security measure to protect unauthorized entrants from accessing personal accounts.
It is due to the fact that Coinbase operates out of the United States that they are subject to abide by the rules, regulations, and legislation laid down by US State and Federal laws, providing their users with even more safeguards against their untimely loss of funds.
Insurance of Clients’ Funds
The remaining 2% of their users’ funds that are held by Coinbase, and not stored offline, are insured against any cybersecurity attacks, physical theft, and theft by an employee. These insurance policies do not however cover any losses incurred due to a breach of a users’ personal account. It is worth keeping in mind that because digital currencies are not seen as legal tender, they do not have the backing of the government, and as such, are not covered by the Securities Investor Protection Corporation, nor is protection offered by way of the Federal Insurance Deposit Corporation (FDIC).
Insurance is offered to the cash balances that are held by the company. Cash balances that have been stored in the Coinbase wallet that is, although this protection is offered to US residents only. The FDIC covers the cash deposits of US residents for their Coinbase USD Wallet of up to $250,000.
Protecting Yourself when Using Coinbase
One security issue that need to take to heart is the part you play in the protection of your account access information. Sharing your username and pass codes are not recommended, and Coinbase customer support will never ask you for these details. Be aware of the scams that are doing their rounds at the moment, and do not give out your information to anyone. Even if you think you trust them. The additional two-factor authentication provided by Coinbase must be for your eyes only, and does require the use of the Google Authenticator app to be functional. For additional protection, it is suggested that you make use of a Hardware wallet. Something offline and off the Coinbase platform should be more than sufficient.
Is Coinbase safe in 2018? The answer would be resounding yes. With their host of security measures employed and the additional insurance as well as offline storage, Coinbase is one of the safest cryptocurrency trading platforms around today.