How to Set Up a Coinbase Wallet (and Why You Should)
Coinbase is the largest cryptocurrency exchange in the United States and one of the largest in the world by trading volume. Known for its beginner-friendly design, it also has a crypto wallet that you can use both on the web and on your mobile device.
If you are new to Coinbase Wallet, it’s time to learn how to set up a Coinbase Wallet and use it to easily buy, sell, receive and send cryptocurrencies.
What is a Coinbase wallet?
So what is a Coinbase wallet? The Coinbase Wallet is a crypto wallet for Coinbase users to store, buy, sell, send or receive cryptocurrencies without using the Coinbase exchange. This is where Coinbase, the exchange where you can trade cryptocurrencies, differs from the wallet where you buy them directly.
On the exchange, you can trade cryptocurrencies with spread and other fees that are not available in the wallet. You should also note that you can store cryptocurrencies on the Coinbase exchange wallet, but this is not the same as the Coinbase wallet.
Unlike the exchange wallet, you can use the Coinbase wallet as a mobile app, which means it’s a wallet like any other hot wallet, separate from the exchange. This article focuses on setting up the mobile wallet as the exchange wallet is set up automatically when you create a Coinbase account.
What are the features of Coinbase Wallet?
The Coinbase wallet has many functions besides buying, selling, receiving, sending and holding cryptocurrencies. You can hold and manage non-fungible tokens (NFTs) in the wallet.
This is not surprising since Coinbase has an entire platform dedicated to trading NFTs known as the Coinbase NFT Marketplace. Supported cryptocurrencies include DeFi tokens, which you can also easily manage directly in the wallet.
Coinbase wallet has also evolved to support decentralized applications (DApps). This means you can interact with decentralized applications from top blockchains like Ethereum without ever leaving the wallet.
How to set up Coinbase Wallet
To get your Coinbase wallet set, you need to install the Coinbase wallet app on your mobile device. It’s available for both Android and iOS devices, so just go to the right store and install it for free.
Downloads: Coinbase for Android | iOS (free)
- After you do that, open it and you will see two options, either to login or register. We’re assuming you don’t have a Coinbase wallet yet, so you should select that Create a new wallet button below the screen.
- This will take you to a new screen that will ask you to create a username that you will use to access your wallet. The username should be a unique name that no one has used before to log into Coinbase Wallet.
- Check the box below that prompts you to allow other Coinbase users to search for your username and the Submit button becomes active. click it
The next screen is the most important because the security of your wallet depends on it. You will be prompted to back up your wallet with your secret recovery phrase. This is a 12-word string that you need to copy and save somewhere.
- You can choose to back up with Google Drive or manually. To back up to Google Drive, tap Backup to Google Drive press and follow the instructions. For a manual backup, tap the blurry key phrase to reveal the words.
- You can also tap Copy to clipboard button under the words and copy them to a digital platform if you don’t write them down manually.
- If you choose to do a manual backup, copy the words in the order in which they appear onto a piece of paper or some other safe place you can think of. You must never give this to anyone else as they can use the key set to access and empty your wallet. For this reason, we advise against copying them to your Google Drive or any other means.
The next screen will ask you to choose the words in the order in which they appear. This ensures that you really copied and saved the key phrase. After you pass the test, click Continue button to continue. You will be taken to the next screen where you should create a passcode as an extra layer of security.
This ensures that no one can access your wallet simply by tapping on the wallet app on your mobile device. Instead, they need the passcode to access it, which only you should know. The passcode should be easy for you to remember but difficult for others to guess.
Review the “Terms and Privacy Policy” button and click “ create a password Button. As a general rule, your passcode, a six-digit number, shouldn’t be your birthday or anything that someone close to you can easily guess. Make it as random as possible; Just make sure you don’t forget it easily.
7 Pros and Cons of Coinbase Wallet
The Coinbase wallet is easy to use, which is absolutely one of its strong points. But there are some other pros and cons of the Coinbase wallet that you should also consider.
advantages
- Beginner-friendly wallet
- Has a long list of supported cryptocurrencies
- Coinbase Wallet is regulated
- You are in full control of your funds
Disadvantages
- Fees can be high
- You have no control over your private keys
Is Coinbase wallet safe?
Security is a major concern when using a cryptocurrency wallet. Coinbase wallet is as secure as any hot wallet can get. Of course, you have your 12-word recovery seed phrase and a passcode. However, hot wallets are generally more risky than cold wallets.
This is because they are always online, which leaves them vulnerable to attacks from hackers. Coinbase Wallet is not exempt from this risk, so you should know how much security you enjoy when using it.
Should You Use Coinbase Wallet?
Coinbase Wallet is suitable for those who are just entering the crypto space due to its design. It’s easy to navigate and doesn’t have any unnecessary features that make other wallets confusing for beginners. So if you are a beginner, Coinbase wallet is a good option until you get used to the crypto space.
As a rule of thumb, don’t store more money on it than you’re willing to lose in case the wallet gets hacked or something else goes wrong.