Why you should not use Coinbase?

Why you should not use Coinbase?

Why you should not use Coinbase


Over the years, Coinbase has given its users many reasons to delete their accounts on the platform.

Unfortunately, Coinbase does not make it easy to close your account.

That is why we have created this detailed guide on how to close your Coinbase account for good in the easiest and fastest way.

We also give you some better alternatives and show you what you can do with the coins on the Coinbase platform before you close your account for good.

Let us go!

How to delete your Coinbase account FAST?

Deleting your Coinbase account is very easy (sort of).

Step 1: Withdraw all balances.

Withdraw all funds on all your accounts to a hardware wallet.

You probably already know how to do this. If not, you can read our step-by-step instructions. 

Take a look at them, and when you are done, come back here.

If you know how to withdraw your money but do not know what a hardware wallet is, you can check out this post about hardware wallets and why you need one.

Here is a list of some of our favorites that you can purchase in our store

Step 2: Select "Account Activity."

In your user settings, go to the "Account Activity" menu.

Step 3: Select "Close Account."

From here, scroll down until you see a red button that says "Close Account".

Step 4: Enter password

Coinbase will ask you one last time to enter your password for confirmation, and then you will finally be free to go.

Complications with closing your Coinbase account.

If the above steps do not work for you, there is a reason.

Coinbase is using a small hurdle against you.

If you have "dust" (small amounts of coins that you cannot transfer due to high fees), you will not be able to delete your Coinbase account.

For example, let us say you have some bitcoin on Coinbase and the network fee for a BTC transaction is 0.0000013 BTC (130 sats).

If you have only 0.0000009 BTC (90 Sats), you cannot trade them or delete your Coinbase account.

There are two solutions to this obstacle.

Good solution: email Coinbase.

Just send an email to Coinbase support and ask to remove the dust from your account so you can close it.

Remember that you will give the remaining 90 sats in your account to Coinbase.

This is annoying, but the remaining dust will not be worth much, and it will save you a lot of time.

Bad solution: deposit more bitcoin into your account

Your account
If you prefer not to contact Coinbase, there is another (much more complicated) option.

This solution is... depositing more bitcoin into your Coinbase account.

This solution may seem counter-intuitive, and frankly, I do not recommend it.

However, it is an option.

So... why would you deposit more Bitcoin into an account you want to close?

Because we need enough in the account to pay the network fee for transferring the remaining coins.

To go back to our example: If we have 90 sats in the account and the network fee is 130 sats, we need to deposit an additional 40 sats into our account.

Remember that when you send the bitcoin to your Coinbase account, you also pay a network fee to get them there, so your total fees will end up being 260 sats.

If the wallet you use to send to Coinbase deducts the fees from the total amount you send (rather than from the remaining balance in your wallet), you'll need to make sure you send 170 sats.

That's 130 sats to send the bitcoin to Coinbase, and 40 sats plus the 90 already in your account to send it all back.

When you are done with that, 0 sats should remain in the account, and you can close it.

In this example I used Bitcoin, but you will need to repeat these steps for any type of cryptocurrency you have on Coinbase.

Why you should delete your Coinbase account.

Now that you know how to delete Coinbase, let us talk about why you should delete Coinbase.

There are many reasons why you should.

Some of these reasons are for your own protection and convenience.

They are practical reasons.

And some of those reasons are ethical.

Coinbase is a shady company that has a track record of doing business with bad people and harming their own customers.

Let us take a look at both categories below.

Reasons for privacy

Coinbase wants to be a financial panopticon.

Yes, Coinbase is pretty secure and has a good record as a custodian.

But it's also responsible for hiring former Hacking Team employees for blockchain analysis.

In February 2019, Coinbase was "thrilled" to welcome Neutrino to its "family."

The blockchain analytics company was expected to play a complementary role to the KYC patent (see below)... except that it collaborated with members of the surveillance firm Hacking Team.

What followed were thousands of users closing their accounts in response.

Coinbase responded by making it more difficult to delete accounts through the "dust" obstacle described above.

The exchange also announced]living-up-to-our-values-and-the-neutrino-acquisition-ba98174cdcf6) that it would fire all former employees of the hacking team.

However, to this day we do not know if they actually fired them.

The picture that emerges is one of Coinbase being an enemy of your privacy. 

And this is how it works:

When a transaction is sent to someone else's Coinbase wallet, the originating address (the address you sent from) is analyzed.

And when someone withdraws coins from Coinbase, the monitoring system still tracks which address those coins go to.

The reason for this is that Coinbase wants to know everything about the cryptocurrencies that come in and out of the exchange. 

And why?

Coinbase claims that it is to prevent theft and illegal activity, and that is true to a certain extent.

But there are other reasons why Coinbase tracks these coins, and the very fact that they are tracked is dangerous for users.

For one, Coinbase is able to censor certain addresses.

They can tell their customers where not to send coins, so those who rely on Coinbase's services are never free to transact with whomever they want.

And that defeats one of the most important use cases of a cryptocurrency like Bitcoin from the start. 

To illustrate this point, your traditional bank works very similarly.

There are certain bank accounts that are considered illegal by the authorities if you transact with them.

Since banks control your money, they can tell you who you can and cannot transact with.

Sometimes we think that's good.

Of course, it's good if people can not fund terrorist organizations so easily.

But sometimes there are very good reasons to send money to and receive money from people who have been banned by the banks.

People who are not criminals and have done nothing wrong, but are in the unfortunate position of living in sanctioned countries.

Or sometimes morality is gray.

Think of an organization like WikiLeaks, which publishes secret material to increase the transparency of governments.

Because of their activities, WikiLeaks' bank accounts are blacklisted or frozen.

While it is not illegal to donate money to them, it is virtually impossible to do so through traditional banks and payment networks.

Regardless of what you think of WikiLeaks or sanctioning countries in general, you can see how we have given up a lot of financial freedom in our efforts to curb crime and terrorism by turning it over to highly regulated banking institutions.

Bitcoin bypasses all of that, but when you store your coins with Coinbase, or even just transact through them, you give up all of that freedom.

And in many ways, Coinbase is even worse than traditional banks because they do not deal in cash.

Instead, they trade with an open-ledger protocol.

Every bitcoin transaction is recorded in the public blockchain.

That gives them a lot of power as custodians.

And while other exchanges have chosen to be more reasonable, Coinbase is particularly draconian.

Through its patented KYC/AML tools, Coinbase has created identities for all addresses.

So it's impossible for anyone to remain anonymous when trading on Coinbase.

In fact, Coinbase has a record of users who use gambling sites or dark markets.

If caught, they face account closure and can even be reported to the police.

So Coinbase is a worse custodian than even your bank.

High fees 

And then there's the argument of fees: Coinbase has some of the highest fees in the business.

Kraken (which has a much better privacy record) charges much less.

Coinmama's fees also help you buy more coins with the same budget.

And if you want the lowest fees, you should choose Binance (although their security record is not that great).

Pretty much every exchange charges lower fees than Coinbase.

And no other exchange has been under as much scrutiny for its attacks on Bitcoin.

Support for centralized forks

Coinbase made its first billion dollars just selling bitcoin.

But at some point, it got political and tried to undermine Bitcoin's decentralization.

Back in 2015, CEO Brian Armstrong pushed for the introduction of big block hard forks.

Initially, Armstrong praised BIP 101 and Bitcoin XT.

During the scaling debate, he also showed support for Classic and Unlimited.

And in 2017, Coinbase was one of the last companies to drop support for SegWit2X.

Overall, Coinbase has supported every major hard fork initiative.

If any of them had been successful, the company would have gained more control over the Bitcoin network.

Being a top supporter of a project with clear leaders would have given them an advantage, and that is completely contrary to the mission Bitcoin originally set out to fulfill.

In contrast, Coinbase did not consider supporting the SegWit soft fork until mid-December 2017.

Then they added it six months after the UASF movement began.

Coinbase did not lead by example, but just followed the market pressure.

Insider trading scandals

And Coinbase never abandoned the idea of big block Bitcoin.

The exchange added Bitcoin Cash in December 2017, triggering a market frenzy that destroyed thousands of people's fortunes.

Some transactions that took place after BCH went public have raised suspicions of insider trading, in which Coinbase employees profited immensely after the exchange went under shortly after.

After the BCH listing hit an all-time high, a massive dump followed.

CEO Brian Armstrong had promised to conduct an investigation into the matter.

But five years later, we still do not know what happened.

This says a lot about Coinbase's integrity and fairness with regular users.

Shitcoin development grants Speaking of supporting value:

Coinbase's Ventures program does not fund bitcoin development projects.

There are plenty of Ethereum and Altcoin projects that are funded, but that's about it.

For a company that sold only BTC in its first five years of existence, that should be shameful.

Coinbase has become a giant in this space by selling Bitcoins.

But at some point along the way, it became more distant and controversial.

Coinbase makes its money from fees from trading, so they have backed as many shitcoins as possible and actively encourage you to trade often.

Even though they know that trading coins frequently is the best way to destroy your portfolio. 

CEO Brian Armstrong even recommended Shitcoins for a fake JK Rowling account.

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