11 Differences Between BlockFi and Coinbase

What are the differences between BlockFi and Coinbase? If you are looking for reliable crypto exchange services from companies based in the United States, BlockFi and Coinbase are good options but which one to choose among these two platforms calls for research and some knowledge.

You have come to the right place if you do not know anything about it since this article entails all the major and minor differences between these two crypto exchange platforms.

BlockFi is a privately owned crypto exchange platform while Coinbase is a publicly traded company and comes with a ticker symbol COIN.

Both these platforms allow the crypto users to buy and sell crypto coins as well as invest in them but there is a slight difference in the operation of BlockFi since it also functions like a crypto bank.

This means that it offers interest-bearing accounts to its users and offers loan services. In comparison, the Coinbase platform mainly performs as a crypto exchange and brokerage service.

There are also several other aspects in which both these companies differ from one another such as the cost of trading and investing, the number of crypto coins supported and the products offered.

BlockFi is relatively less expensive than Coinbase exchange but investors may find that the currency supported by this platform to be quite limited being eight in number in comparison to sixty-six currencies supported by Coinbase.

11 Differences Between BlockFi and Coinbase

Differences Between BlockFi and Coinbase

Crypto investors who are new to this field and want to diversify their crypto investment portfolio will find that Coinbase excels BlockFi in this particular aspect.

However, both these platforms emphasize on the security aspect and are quite suitable for the users who are new in this space. That does not mean any of these two exchanges will satisfy your crypto needs fully.

In order to choose the right crypto exchange for you, you will need to know the differences to evaluate these two platforms fully.

Apart from the basic aspects, you will also need to look into the unique features, deposits and withdrawals and more. Here they are all for you.

1. Features

The approach of both these crypto exchange platforms is different when it comes to providing exchange services.

When it comes to making payments, as for Coinbase, the crypto investors are allowed to use Automated Clearing House or ACH Network, or wire transfer, or PayPal, or debit card and credit card to buy crypto coins on this platform.

Through these trades they can exchange their fiat funds with different types of Altcoins of their choice.

On the other hand, as for BlockFi, the users are allowed to use different payment methods to send their money such as through wire transfer or ACH transfer.

On this platform, the fiat currency is converted into GUSD or Gemini Dollars and then deposited into the BlockFi Interest Account. This allows earning an Annual Percentage Yield of 8.6% till the time the crypto investors use the money to buy crypto coins.

BlockFi is also favored a bit more than the Coinbase platform due to the interest-earning accounts offered by it. There are also a few other BlockFi products that also draw more users towards this crypto platform such as its consumer and business loans.

When it comes to the amounts offered in terms of these loans, the platform determines it on the basis of the amount of collateral posted as well as the Loan to Value or LTV ratio.

Also, the platform has rolled out a Rewards Visa Signature Credit Card which does not carry any annual fees and offers a cashback of 1.5% in Bitcoin on every purchase.

As for Coinbase, the platform basically focuses on educating the crypto investors through videos as well as short courses that they can take on to know more about the different currencies as well as the ways in which they can earn more crypto.

Like BlockFi, it also has rolled out a Visa debit card which does not have an annual fee but allows the users to have a cashback of up to 4% on every purchase. This card allows them to spend their crypto anywhere and everywhere provided Visa debit cards are accepted there.

The Coinbase platform offers its native USD Coin called USDC which allows the users to earn an interest on it up to 0.15% APY for holding it.

However, BlockFi does not have a native coin of its own but supports GUSD, the native coin of Gemini, its primary custodian.

2. Currencies

When it comes to the selection of currencies, it seems that Coinbase is much a better option since it offers a large number of crypto coins to its users to choose from.

The list of coins supported by this crypto exchange platform includes and is certainly not limited to BTC, BCH, ADA, DOGE, ETH, ETC, LTC, UNI, and BAND.

As for making deposits, the platform does not support fiat money. Instead, it converts bank or wire transfer into the GUSD stable coin. However, you can buy coin fractions if you wish on this platform.

On the other hand, the BlockFi platform only supports a limited number of crypto coins such as BTC, ETH, LTC, USDC, GUSD, PAXG, DAI, LINK, UNI, BAT, PAX, and USDT for non-US residents only.

Read Also:  7 Differences Between Crypto Market Maker and Taker

However, this platform allows making cash deposits and accepts payments made in more than twenty different fiat currencies which include and is not limited to USD, GBP, and EUR. This platform, like Coinbase, also allows buying coin fractions.

3. Wallets

The BlockFi platform offers its users a custodial wallet. This wallet allows the users to transfer as well as hold crypto coins.

However, this wallet is controlled by the exchange itself, technically, and here in comes the risk which is that you do not have full control of the crypto funds held in this custodial wallet. You will not be allowed to access your holdings in the wallet if the platform freezes your account.

On the other hand, the Coinbase platform also offers a custodial wallet but along with that it also offers a non-custodial wallet. This Coinbase Wallet allows the users to have full control of their crypto funds.

However, this is a hot wallet, which means that it is linked with the internet and you can download it on your desktop as well as on your mobile devices. The best part is that it is free for anyone to use, even those who are not Coinbase users.

4. Security

Though both these platforms are quite safe and secure to use due to their advanced security and safety measures, there are some differences that are worth noting.

As for BlockFi, the platform uses Gemini as its primary custodian with SOC 2 Type 1 security compliance. This means that Gemini will handle the keys and oversee your funds stored on the platform.

Gemini is their partner and has better security certifications to protect the funds of the users, 95% of which are stored in a cold storage and insured through Aaron. It also offers two-factor authentication, address allowlisting, and PII verification.

On the other hand, Coinbase stores 98% of the funds of the users in cold storage and protects them against frauds and thefts with an insurance policy offered by The Federal Deposit Insurance Corporation or FDIC.

However, when it comes to managing the keys, it is done by Coinbase. It also incorporates security features like two-factor authentication, biometric login, and address allowlisting.

5. Fees

In terms of the fees charged by these two crypto platforms, you can notice a stark difference.

As for Coinbase, the fees are charged on the basis of the location of the users and payment methods. In addition to that, the platform also charges a spread from the users of about 0.50%.

That is not all. The platform also charges a convenience fee or a variable fee related to payments which are in all possible ways on the higher side of ‘flat’ fees.

The breakup of the Coinbase convenience fees are as follows:

  • For $10 or less, it is $0.99
  • For more than $10 and up to $25 or less, the fee is $1.49
  • For more than $25 and up to $50 or less, the convenience fee charged is $1.99 and
  • For more than $50 and up to $200 or less, the users need to pay a convenience fee of $2.99.

As for the Coinbase Pro platform, the maker fees typically range from 0% to 0.50% and the taker fees may be between 0.04% and 0.50% in addition to a spread charged for about 0.50%.

On the other hand, the BlockFi platform claims to be a zero-fee exchange. There are no convenience fees charged along with the trading costs.

Users can send money through wire transfer or ACH transfer for free and investors are allowed to connect their bank account.

However, the prices may vary at the time of trade which is +/- 1% on average and is based on the spot index price of the crypto asset at that particular time.

In any case, this is much lower than the fees charged by the main Coinbase platform but is much more than the fees on the Coinbase Pro platform.

As for withdrawals, both these exchanges charge fees when the users convert their crypto assets into USD.

The BlockFi platform allows the users to make one free crypto coin and one free stable coin withdrawal in a month. After that, they charge a fee depending on the type of coin used. It varies as under:

  • For BTC, it is 0.00075 BTC
  • For ETH, it is 0.02 ETH
  • For LINK, it is 0.95 LINK
  • For LTC, it is 0.0025 LTC
  • For PAXG, it is 0.015 PAXG and
  • For stable coins, it is 10 USD

In contrast, Coinbase users are required to pay a fee to the tune of 1.49% when they send their money to the Coinbase USD wallet or to a bank account.

6. Ease of Use

Though both these platforms are good for the beginners in the crypto space to use, both are easy to use but there are a few significant differences in the features and functionalities offered to the users.

Coinbase offers a wide range of tips and tutorials in addition to its large knowledge base. The mobile app is intuitive, easy to navigate and therefore receives a high rating in terms of usability.

BlockFi, on the other hand, is also a good platform for the beginner investors, considering both its website and mobile app.

Both these are easy to use but instead of offering assistance toward crypto learning much, it offers advice about paying crypto taxes, understanding the terms of loans, and other things related to crypto.

7. Customer Support

In terms of customer support, BlockFi seems to be much better. It is a good option to choose because the platform offers support to its customers through different methods such as:

  • Live chat
  • Phone and
  • Email
Read Also:  6 Differences Between Crypto.com and Binance

They are known to reply to a large number of emails within a period of 24 hours.

On the other hand, the customer support of Coinbase is disgracefully slow. Most importantly, you cannot reach out to their customer support team over the phone.

8. Accessibility

The Coinbase crypto exchange platform is accessible from nearly fifty different states, except Hawaii and also from Canada, the United Kingdom, Australia, Singapore, and across thirty-six European countries.

As for the resident of New York State, the platform however does not allow them to access a few particular coins such as:

  • DASH
  • DNT
  • 1INCH
  • CTSI
  • ENJ
  • EOS
  • SUSHI
  • TRB
  • FORTH
  • REP
  • USDT and
  • XTZ

On the other hand, the BlockFi platform is accessible to the users residing in all of the fifty states in the US as well as several other international locations except those countries that are sanctioned by the United States.

However, the BlockFi Interest Account or BIA is not accessible by the residents of New York and the USDT is available as a stable coin trading pair only to the non-U.S. residents. Moreover, accessibility to the products offered by the BlockFi platform varies by the states in question.

Here are the states where BlockFi products are not available:

  • BTC, LTC, ETH, PAXG trading pairs are not available in New Mexico, West Virginia, Nevada, and New York.
  • Stable coin trading pairs are not available in Arkansas, Iowa, Mississippi, North Dakota, Louisiana, Maine, New York, Vermont, New Mexico, and West Virginia.
  • Business loans are not offered by this platform in Gaum, Vermont, North Dakota, and South Dakota.
  • Consumer loans are not available to the residents of Iowa, Idaho, Montana, Nevada, Louisiana, Mississippi, South Dakota, and Vermont.
  • Fiat wire transfers or ACH transfers are not supported by the platform in Delaware, Guam, Maine, Mississippi, Iowa, Louisiana, North Dakota, New Mexico, South Dakota, Vermont, Nevada, New York, and West Virginia.

However, where ACH transfer is not available, the platform suggests the users to deposit crypto into their BlockFi account or to send USD to Gemini or Coinbase and then fund their BlockFi Account with the stable coin of Gemini, GUSD or USDC, the stable coin of Coinbase.

9. Account Perks Offered

The perks offered by the accounts of the respective platform are also different. BlockFi offers interests on its accounts up to 8% APY and does not charge any transaction fee from the users while trading, even if they make instant trades or recurring trades.

In addition to that, the BlockFi platform offers crypto-backed loans, institutional services, and benefits for spending by using credit cards.

On the other hand, the account perks offered by Coinbase apart from providing a wide range of crypto coins to its users to choose from include wallet services, crypto staking, Coinbase Earn feature for getting crypto rewards, a separate Coinbase Pro platform, a Coinbase card for spending, as well as several institutional services.

10. Mobile App

Though both these platforms offer a mobile app for their users, which of Coinbase is a tad better than the one offered by BlockFi. It is easy to use and comes with a simple design.

However, it lacks charts and graphs and also comes with high fees. Most importantly, the transactions placed are potentially kept on hold for a period of 24 hours or longer as a measure to prevent fraud.

On the other hand, the BlockFi app is simple and secure to use. However, it lacks support and sometimes fails to work properly or verify identities and even signs out automatically.

11. Some Other Differences

A few smaller yet significant differences, if known, will also help you in differentiating these two crypto trading platforms.

BlockFi does not have an account minimum but as for Coinbase the minimum requirement is $2.

Both the platforms offer some rewards as their promotional programs. If you refer a person to the BlockFi you can earn a reward of $10 in Bitcoin provided the person referred funds the interest account with a minimum of $100. On the other hand, the Coinbase platform offers only $5 in Bitcoin to the users when they sign up.

The account type offered by BlockFi includes personal and business crypto interest accounts. On the other hand, Coinbase offers only personal investment and institutional investment accounts.

The users of the BlockFi platform have an option to get customer support from human advisors and expert client service representatives.

The institutions can also avail of private client support. In comparison, there is no such option available to the users of the Coinbase platform.

Which is Better – BlockFi or Coinbase?

In simple words, BlockFi and Coinbase are both trusted and well-known cryptocurrency exchanges, suitable for beginners. Furthermore, both these crypto exchange platforms support institutional users as well.

Both these platforms being based in the US, typically follow strict regulatory measures and standards to meet, if not exceed, the industry guidelines.

They have a strict Know Your Client or KYC verification process as well as an account verification procedure. Both these platforms are safe to use since they use bug bounty programs to detect any weaknesses in the security system.

If you are used to mobile apps, both these platforms will offer an almost similar user experience since both the apps support iOS and Android devices.

Read Also:  9 Differences Between Binance and Binance US

You can use them both easily if you want to access your account and trade your crypto assets. There is no advanced charting, profit and loss information, or other complicated tools since both these apps are designed for the beginners to use it on the go using their cell phones to buy or sell crypto coins.

However, the BlockFi app allows its users to view their accounts and even apply for a loan directly from the app.

Both these crypto platforms offer their users a hot wallet and follow specific and advanced security measures such as a password, 2FA, and device confirmation.

They also follow allowlisting in order to protect the funds of the users even further. However, do keep in mind that you will not have control over your private keys on any of these two platforms.

However, the similarities seem to end just there and therefore it does not mean any one of these platforms will be able to meet all of the crypto trading needs of all users.

Coinbase is the best option for the crypto investors who are new to this crypto space. And, it is also more suitable for the advanced traders and investors since it supports more crypto coins and supports multiple payment options.

Also, the features of the Coinbase Pro platform are very helpful for the investors who trade on a regular basis and wish to diversify their crypto portfolio with more Altcoins.

If you consider the crypto coin selection offered by BlockFi it is no doubt anywhere near that offered by the Coinbase platform but it could still be a very good option for those particular crypto traders and investors who are looking for lower transaction fees and reasonable interest rewards.

Add to that, this is one of the best options users can have to avail crypto-backed loans at an interest rate as low as 4.5%. In comparison, the Bitcoin-backed loans offered by Coinbase carries an APY of 8%

Still, Coinbase is one of the most favored crypto trading platforms for people looking for various educational resources which include Coinbase Earn apart from its wide range of crypto assets.

Users can learn a lot about cryptocurrencies from these educational tools while using the Coinbase platform.

To summarize, BlockFi is the right platform to choose by those users who are looking for a platform that:

  • Has no minimum requirement to set up an account
  • Allows making trades free from any commissions, though a small spread fee is applicable
  • Allows making both instant trades and recurring trades and
  • Allows the account holders to earn immediate interest on their crypto balances.

This US-based crypto exchange platform provides a large variety of crypto services with its limited coin support to both the individuals as well as the institutions within the US and abroad as well.

However, one thing that should be kept in mind when you choose this platform is that there are several US states that have alleged that the interest accounts of this platform have violated securities laws earlier in July 2021.

Also, if you are a resident of New York, you will not get the advantage of interest perks.

The good thing about BlockFi is that the investments of the users add up pretty fast because the interests offered on holdings are compounded and are paid on the first business day of every month.

The trading accounts allow making fast trades with reasonable returns at a low cost. It offers multiple options and various services.

And, the crypto-backed loans are one of the most striking features of this platform which allows the users to get cash without having to sell their crypto assets for it.

And, to summarize the features of Coinbase, it can be said that this platform is right for those users who are looking for:

  • More currency support
  • A low account minimum
  • Interests and rewards for completing courses on varied crypto assets
  • Earning an income from staking crypto coins
  • A digital wallet storage
  • Educational resources
  • Crypto-backed loans and
  • Various trading platforms.

However, if you choose Coinbase then you should also not overlook the fact that it will not allow futures trading and not offer margin accounts. And, the lower balances in the account will cost you much more.

The Coinbase platform comes with a unique Coinbase Commerce feature which is actually a digital payment service. It allows the businesses to accept payments in all forms of crypto including Bitcoin, Ethereum, and others directly into the wallet controlled by them.

This expedites the workflow and at the same time makes the entire process of making a transaction much smoother. And, its ventures feature provides adequate support to the early-stage blockchain and crypto startups financially.

Conclusion

Comparing two crypto exchanges like BlockFi and Coinbase is not an easy task but this article now has surely made it easier for you to uncover how each of the two platforms differ and select the right crypto exchange according to your needs.