BlockFi vs. Coinbase: Fees, Security, Sign Up And Features

As cryptocurrencies like Bitcoin and Ethereum continue to grow despite an unstable market, more and more people are jumping into the crypto bandwagon. In fact, 8% of adults in the U.S. now own crypto and they are doing it through a cryptocurrency exchange.

When it comes to centralized exchanges, two that easily standout are BlockFi and Coinbase. But which of the two is better? Let’s compare.

BlockFi vs. Coinbase: What you need to know

About BlockFi

Founded in 2017, BlockFi is a relatively young New York-based company. Built by a team with combined years of experience in traditional financial services, BlockFi operates as your one-stop-shop for crypto storage, management and leveraging. It also offers low-interest loans and interest-bearing accounts to its users, aside from operating like your usual cryptocurrency exchange.

The platform is great for both beginners and intermediate crypto investors who want to use their smarts in traditional finance in a crypto setting.

About Coinbase

On the other hand, Coinbase is one of the largest crypto companies in the world. It offers support for more than 100 countries and 40 million users. It is one of the first crypto exchanges in the U.S. to be fully regulated. Founded just three years after Bitcoin, Coinbase now offers a wide array of services including brokerage services, investment options and of course, the ability to buy and sell different types of crypto through a bank account, debit or credit card.

Coinbase is best known for being an on-ramp service for beginners to dip their toes in the crypto market and make their first trades and sales.

Features

When it comes to features, both exchanges provide their own set of offerings.

Here's what you can expect from BlockFi:

• Investment options
• Instant trades on your cryptos
• Eight different cryptocurrencies
• No commission fee
• No monthly fees or minimum deposits
• User-friendly interface
• Loan services

The main draw for BlockFi is its interest account where users can earn between 3% and 8.6% compounding interest on crypto holdings. You can earn a higher-than-normal interest rate by simply storing and holding your crypto on BlockFi. What’s more, the account has no hidden fees and no minimum balance requirement.

BlockFi also lets you borrow against your portfolio, removing the need to sell to a down market. The platform is currently taking preorders for a credit card with Bitcoin rewards, which is an innovative idea that further bridges the gap between traditional finance and crypto.

Coinbase on the other hand, works like a “traditional” crypto exchange and is known as one of the best in the business. It achieved this status by giving a comprehensive crypto trading and selling experience to beginners.

Check out what Coinbase offers:

• A user-friendly and easy-to-understand interface
• Low fees
• One-click crypto trading and selling
• More than 50 cryptocurrencies to sell and trade
• Crypto storage and wallet
• Commerce services
• Investment services for individuals and businesses

Coinbase also rewards users who value education via Coinbase Earn, a feature that allows you to earn free crypto assets by learning about different cryptocurrency topics. Coinbase offers USD Coin, which is a USD-backed crypto that stays stable, letting you redeem one USD coin for one US dollar everytime. There’s also the Coinbase Card, which is a Visa debit card that lets you spend on any asset in your portfolio while simultaneously earning rewards for your purchases. This card can be used anywhere where Visa is accepted.

Coinbase also offers Coinbase Pro, which is a more in-depth and comprehensive platform for more advanced traders who want to take a deep dive in the markets.

Fees

While both exchanges offer low fees for clients, the fee structure differs between the two.

For BlockFi, the company is big on its “no hidden fees” policy, which is why all fees are disclosed upfront. BlockFi also does not charge any fees for trading either crypto or stablecoin. However, the platform charges fees for most withdrawals and the fee structure is as follows:

• BTC: 0.0025 BTC per withdrawal, 100 BTC withdrawal limit per 7-day period.
• ETH: 0.0015 ETH per withdrawal, 5,000 ETH withdrawal limit per 7-day period.
• LTC: 0.0025 LTC per withdrawal, 10,000 LTC withdrawal limit per 7-day period.
• Stablecoins: $0.25 USD per withdrawal, $1,000,000 withdrawal limit per 7-day period.
• PAXG: 0.0025 PAXG per withdrawal, 500 PAXG withdrawal limit per 7-day period.

BlockFi also gives you one free crypto withdrawal per calendar month and there’s no minimum account balance needed to earn interest.

As for Coinbase, the platform has a bit of a convoluted fee system. The fees are still relatively lower than other exchanges. The platform’s fee structure depends on two factors: Coinbase charges a spread of about 0.5% for cryptocurrency sales and purchases and it also charges a fee that is greater than either a flat fee or a variable one depending on the amount purchased and the payment type.

For example, trades of $10 or less has a fee of $0.99, while more than $50 up to $200 would have a fee of $2.99. By comparison, Coinbase Pro’s fee structure is more straightforward, which is great for users who will eventually upgrade.

Sign Up

Sign up is easy for both BlockFi and Coinbase.

For BlockFi, signing up consists of uploading a clear photo of a supported ID document. Once approved (which only takes minutes), you can securely link a bank account and transfer funds. For new accounts, there is a daily limit of $500, while established ones can transfer up to $1,000.

Additionally, new BlockFi users can receive up to $250 BTC bonus when they make a qualifying deposit within the first 30 days of opening.

As for Coinbase, you simply need to verify the email you used and prove your identity via state identification, such as your social security number. Once done, you can add your bank account, credit or debit card information to enable deposits and withdrawals.

Security

When it comes to security, it’s important to understand that using an exchange will never be as safe as a bank in the sense that your money is not insured by the FDIC or SIPC. Still, these exchanges take great measures to keep your trading experience worry-free and secure.

For example, BlockFi keeps your crypto deposits safe by letting Gemini handle 95% of the platform’s accounts in cold storage and the rest in hot wallets insured by Aron. In addition, Gemini itself is regulated by the New York Department of Financial Services and has received SOC2 compliance from Deloitte based on their custody-solution practices.

Coinbase on the other hand, stores its funds in cold storage and servers protected by the company’s own insurance policy. In case of any security breach, the insurance policy ensures any customer funds that were lost are paid out. Coinbase also employs time-delayed withdrawals on funds to better protect them.

On the user end, both exchanges employ additional security features like identity verification and 2-factor authentication.

Verdict

Depending on your needs and financial goals, BlockFi and Coinbase are great crypto platforms. Both take their security seriously, are user-friendly and provide a wide array of features that cater to their clients' needs.

Whichever of the two you decide to go with depends on you. If you’re a beginner in trading crypto, then Coinbase is a good platform to start. If you want a more traditional investment-based platform, then BlockFi is for you.

Learn more about BlockFi by clicking here or start your trading journey on Coinbase by clicking here.