Known first as Toshi following its launch, Coinbase wallet does not use custodial services for any reason. Instead, private keys are saved straight to the user’s device. The wallet is a product of Coinbase.
At this point, please know that there is a difference between Coinbase Wallet and Coinbase Consumer, which is the popular one. Many people think of Coinbase as the first place to consider when there is a need to buy some digital assets. Another reason why people sign up on Coinbase for its consumer services is that they want to store their assets. Holding of assets is also a privilege for those who did not buy the assets from them. No third party comes in between you and Coinbase so you have to trust it to keep your private keys secure. You see, this has been an issue surrounding Coinbase and its consumers. In decentralization, it is believed that any network that claims to be decentralized will not be trusted with keys and Bitcoin.
Because of that, Coinbase decided to come up with a non-custodial wallet where users can keep their private keys.
Coinbase wallet appears to give satisfaction to its users as it has attracted a star rating of 4.6 according to the reviews of nearly 2,000 users on iOS. The wallet is also available for Android users. With its user rating, one can see it is not far from being a popular demand just like Binance and Blockchain wallet that have star ratings of 5 and 4.8 from 3,690 and 34,000 respectively. Notwithstanding, Coinbase still deserves accolades for creating a wallet that is easy to use and still able to serve many more users.
What it offers
Coinbase Wallet offers users the ability to do things that are the privileges of those that join a decentralized network. They can purchase and keep ERC-20 tokens, Bitcoin, Ethereum, plus other crypto assets. With Coinbase Wallet, it is also possible to make use of web3 applications. Persons looking at getting rare digital collectibles can also do it with this wallet.
Assets you will find
There are several assets that Coinbase Wallet supports. Though more is yet to be added, presently, one can keep, transfer, and obtain these assets:
Basic Attention (BAT)
And many others
The dApp browser from Coinbase Wallet is an easy means of accessing web3 apps and performing operations on them. The browser doesn’t look too different from the ones used daily for browsing websites but with this one, it is possible to log into Compound and other DeFi sites without going through web3 wallets such as Metamask. The browser is designed in a way that it accesses Compound (and similar projects) directly, thereby linking it to your Coinbase wallet to perform any transaction such as borrowing or lending.
Use of only username for payments
Something that will astonish you when you start using Coinbase Wallet is the fact that you will no longer need those long and difficult-to-memorize wallet addresses. With just your username, transferring and receiving crypto assets are possible. This takes away the worries of checking those long addresses frequently to be sure there is no mistake before sending money or asking someone else to do the same. Now that usernames are the only requirements for sending and receiving payments, those that never wanted to own a crypto wallet can do so. This includes a vast majority of Venmo users.
Relationship with Coinbase Consumer
Finally, it is possible to add the Coinbase Wallet to a Coinbase Consumer account. This makes it possible for people to now enjoy the traditional benefits of Coinbase and combine it with the trustless services that are required of any decentralized network.
Although the wallet comes with promises to safeguard money and make it easy to access funds, it is yet to perform as good as similar DeFi networks that do not engage custodial services with regard to having other DeFi projects on it.
For instance, Argent and Coinbase Wallet look similar but users of Argent find it possible to go from their wallet to other DeFi projects. For example, it is possible to trade ERC-20 tokens through Kyber, take part in lending on Compound or generate Dai on Maker without logging out of your Argent Wallet account. Although Coinbase’s dApp browser aims to achieve this, not many people think of it because it is more laborious than what Argent has brought to the table. As a result, Coinbase would have to do something if it truly wants to compete in the developing DeFi space.
Furthermore, it is not possible to buy and sell digital assets straight from the Coinbase Wallet. To do this, users would have to connect to Coinbase Consumer network where your details are noted to prevent money laundering. In addition to depriving one the benefits of being anonymous, Coinbase Consumer also charges higher fees than most of its contemporaries. This is unlike the case with Binance Trust Wallet and Argent Wallet which do not fulfill KYC/AML rules and have an avenue to connect straight to decentralized exchanges.
Nevertheless, Coinbase Wallet deserves some credit for being a better version than some wallets that existed before now such as MyEtherWallet. Coinbase Wallet is easy to use by a newbie but it still needs to step up its features to gain the hearts of more crypto users.
With Coinbase Wallet, users can manage their money in a way that is common to all decentralized networks. It is important for new comers to know this so that they can choose the wallet instead of Coinbase Consumer where something bad can happen due to its centralized nature.
If something unfortunate happens to Coinbase such as a cyber fraud or closure by the authorities, it is possible that you will take back nothing with you. Some people have got a wrong idea about what FDIC insurance for Coinbase Consumer actually means. The insurance does not protect an individual’s account if it gets hacked but it does so for the entire customers if Coinbase is attacked as a whole. But Coinbase Wallet and others that use no custody do not even have this insurance. This stresses the need for custodial wallets to begin thinking of what to do regarding this before long.
Coinbase wallet has gone through several changes since its inception. In the next three years, it is likely that even more changes will be applied to the wallet. This is not peculiar to Coinbase as other wallets are working hard to be the most recognized among crypto users. Thus, Coinbase must not relent in its efforts if it truly wants to remain important.
Finally, the Coinbase Wallet is easy to use and recommended for new comers who are just using a non-custodial wallet for the first time. It’s not a bad start since they can also enjoy the availability of several assets, important tools, and a decentralized app browser for accessing web3 applications.