Purchasing your first Bitcoin can be smooth and easy on the right platform. For this, two of the best are Paxful and Coinbase, both of which are highly regarded for their friendly interfaces and secure environment. However, it’s important to know that Paxful is a peer-to-peer (P2P) marketplace while Coinbase is a cryptocurrency exchange. This significant difference is crucial when deciding which platform to use for your crypto trading needs.
Paxful vs Coinbase Cryptocurrency Exchange Comparison Chart
|Fees||Check Fees at Paxful.com||Check Fees at Coinbase.com|
|Fiat Currencies||300+||EUR, USD, GBP|
|Deposit Methods||300+||Cryptocurrency, SEPA, Wire Transfer|
|Exchange Volume||n/a||$380 million|
|Has Been Hacked||No||No|
Coinbase offers a more secure experience than Paxful.
As a fully regulated and licensed exchange in every country it’s available in, Coinbase guarantees a secure crypto trading experience. Customer funds are kept in offline storage so they’re inaccessible in case of a breach, which has never happened in the company’s history. US residents also get the benefit of having their USD deposits insured by the FDIC, up to a maximum of $250,000. As far as exchanges go, Coinbase is one of the few to have a stellar reputation recognized by investors and regulating bodies alike.
To compare, where Coinbase is a fiat-to-crypto brokerage, Paxful is instead a peer-to-peer marketplace. Paxful provides a secure platform for Bitcoin buyers and sellers to meet and interact. Key to this is Paxful’s secure escrow feature, which holds a seller’s Bitcoin to guarantee that it’s delivered to the buyer upon purchase confirmation. According to its founders, Paxful is like PayPal + Uber, and it certainly applies since transactions can complete quickly and Bitcoin sellers can be rated and reviewed by buyers.
Another critical difference between Paxful and Coinbase is KYC/AML requirements. ID verification is mandatory on Coinbase before a user can begin trading on the platform. Completing additional levels of verification will increase account limits accordingly, resulting in higher withdrawal amounts and the like. The same applies for Paxful; however, users can choose not to verify their identity and still be able to buy Bitcoin, though at a $1,500 trade limit. Creating an offer to sell Bitcoin requires ID verification though.
Because buyers will need to interact with sellers for a trade on Paxful, there’s potential for non-secure transactions, such as if one party requests trading outside the platform. Still, Paxful’s rating system helps newcomers recognize trusted sellers, and trading within the marketplace is foolproof. In comparison, Coinbase lets you skip this whole step since you purchase crypto at market value and all customer funds are held securely within the broker-style platform.
Paxful has more supported payment methods than Coinbase.
Paxful’s goal is to make Bitcoin easy for everyone. They enable this by allowing more than 300 payment methods on the platform, so you can have full control over your money. This includes bank transfers, credit/debit cards, online wallets, gift cards, goods and assets, and of course, digital coins. Paxful operates in more than 200 countries (whose fiat currencies are accepted), and you can choose local payment methods, even meeting up for cash. There are currently 26 listed cryptocurrencies you can trade in Paxful and you can find the pairing you need with the method you prefer using their advanced search.
Meanwhile, Coinbase’s markets are more limited, as it’s a strictly fiat-to-crypto exchange. You can purchase Bitcoin with your country’s fiat, though a conversion fee applies if it’s not USD, EUR, or GBP. Coinbase has increased its listed cryptocurrencies from 4 to over 20, choosing only the more stable and popular ones such as USDC, ZRX, EOS, XRP, BAT, etc. You can link your bank account directly to your Coinbase account to make transactions faster. There’s also a recurring buy feature that lets you invest in crypto regularly over time through scheduled purchases.
Due to its popularity and reputation for security, Coinbase’s liquidity is one of the highest in the industry. Its upgraded version for professional traders, Coinbase Pro, also sees some of the highest daily trading volumes. Coinbase’s charting features and interface lets you see how the market is moving, allowing you to discover opportune times for profitable trades. Buying and selling fiat or crypto happens instantly as soon as you press the respective buttons. As such, it’s just as conducive for regular or aggressive trading as for buy and hold strategies.
In comparison, Paxful works quite differently, since you’ll be searching and browsing through offers. Once you find an attractive offer that suits your preferred currency and payment method, you’re advised to check the user’s profile and rating as well as the offer’s terms. If you want to proceed, starting the trade will open a live chat where you can go over the process with the other party. Confirming payments will release funds held in escrow. As you can see, it’s a much more involved process than in an exchange.
Fees and Support
Paxful charges lower fees than Coinbase.
Paxful makes buying Bitcoin on its marketplace enticing by charging zero fees no matter your selected payment method. The company gets revenue by charging fees for selling Bitcoin only, starting at 0.5% for bank transfers and 1% for other non-gift card methods. The only other fees that Paxful charges is when you send out Bitcoins to external wallets, which will then vary based on the amount of funds being transferred.
In comparison, Coinbase’s fees are a bit more complex, since it charges a spread plus a Coinbase Fee for every crypto trade. The spread typically starts at 0.5% but can fluctuate depending on Coinbase Pro prices. The Coinbase Fee will be the greater of either a flat fee or a percentage dependent on your region, payment type, and feature selected. In addition, purchases made with your country’s fiat will apply a conversion fee, while converting crypto-to-crypto has a spread margin of its own. Withdrawals also have minimal fees based on the method you choose.
While you can experience lower fees selling on Coinbase, the relevant fees that apply are a bit more complex than on Paxful. Moreover, buying Bitcoin on Paxful is strictly better since it incurs no fees.
As for customer support, Coinbase has the edge in offering phone support for selected countries. Its email ticketing system is still the primary channel for account concerns and general inquiries, just like on Paxful. While both sites are pretty welcoming to brand new users and crypto buyers, Coinbase provides an interactive learning portal that also provides payouts for completed courses. It’s another reason why Coinbase is the recommended on-ramp for cryptocurrency trading, though Paxful prides itself in having helpful users for newbies as well.
Paxful is better for buyers while Coinbase is better for regular trading.
Ultimately, Paxful and Coinbase provide very different trading experiences. As a P2P marketplace, Paxful is an attractive option for acquiring Bitcoin, especially since you can choose nearly any payment method you prefer. Its escrow and user ratings features make transactions secure, and you can even choose to trade in complete anonymity up to a certain volume limit.
On the other hand, if you’re looking to trade crypto regularly, Coinbase will provide more ease of use and smoother overall experience. As a full cryptocurrency exchange, Coinbase lets you see how asset prices are moving over time, giving you information to use for potential earnings. Its status as a fully regulated company and reputation as a secure platform are also not to be taken lightly, as there are only a few in the still young blockchain industry.
Yes, as long as you conduct transactions strictly within the platform, your funds will be securely handled by Paxful. Paxful has an escrow feature that protects against scams as it holds assets until the purchase has been successfully confirmed by both parties. Moreover, users receive ratings from other users to show their trustworthiness, responsiveness, etc.
Yes, creating an account in Paxful will get you a Bitcoin wallet. Currently, more than 3 million people have used Paxful’s wallets to send and receive thousands of Bitcoins.
Yes, you can. You’ll only need the receive address of the Paxful wallet and enter it into the recipient field within your Coinbase account.
Yes, Coinbase has never suffered a breach and so has never lost any customer funds. Moreover, Coinbase keeps 98% of user funds in offline storage so it can’t be accessed even if hackers manage to find their way in.