Coinbase – Buy & Sell Bitcoin. Crypto Wallet

Published:

Wallet Logo

This Android app was first launched on 1st March 2013 and currently has more than 10000000 downloads, a 3.9 stars rating from 204065 users and the latest release is version 8.2.1.

Our last analysis was done on 30th October 2019 based on data found in their Google Play description and their website. Our verdict was Custodial: The provider holds the coins (details below).

We found these ways of contacting the developers:

Help spread awareness for build reproducibility

Please help us spread the word, asking Coinbase – Buy & Sell Bitcoin. Crypto Wallet to support reproducible builds via their Twitter!

Do your own research!

Try out searching for "lost bitcoins", "stole my money" or "scammers" together with the wallet's name, even if you think the wallet is generally trustworthy. For all the bigger wallets you will find accusations. Make sure you understand why they were made and if you are comfortable with the provider's reaction.

The Analysis

The Coinbase app, not to be confused with Coinbas Wallet is one of the top two Bitcoin “wallets” on Google Play but beyond the name, nothing indicates this app to be an actual wallet.

Historically Coinbase was an exchange and like almost all exchanges, they allowed to hold Bitcoins in trading accounts. Later the Android app was released and called a “wallet”.

(On another historical note, Brian Armstrong, a co-founder of Coinbase did release an actual Bitcoin Wallet back in June 2011. It was open source and downloaded the full blockchain to your phone.)

As the wallet setup does not involve a way to backup private keys, we assume those private keys are under the sole control of Coinbase, making it a custodial wallet or non-wallet.

Verdict: This app is not verifiable.

Verdict Explained

Custodial: The provider holds the coins As the provider of this app holds the users coins, verifiability of the app is not relevant to the security of the funds!

This verdict means that the app might or might not publish source code and maybe it is even possible to reproduce the build from the source code but as it is custodial, the provider already has exclusive control over the funds, so it is not a wallet where you would be in sole control of your funds.

Custodial wallets might not be the worst option for all users.

  • Do your own research if the provider is trust-worthy.
  • Do you know at least enough about them so you can sue them when you have to?
  • Is the provider under a jurisdiction that will allow them to release your funds when you need them?
  • Is the provider taking security measures proportional to the amount of funds secured? If they have a million users and don't use cold storage, that hot wallet is a million times more valuable for hackers to attack. A million times more effort will be taken by hackers to infiltrate their security systems. Will they detect when for some software error a hacker is spending other people's money before the losses are unrecoverable?

The app cannot be independently verified. If the provider puts your funds at risk on purpose or by accident, you will probably not know about the issue before people start losing money. If the provider is more criminally inclined he might have collected all the backups of all the wallets, ready to be emptied at the press of a button. The app might have a formidable track record but out of distress or change in management turns out to be evil from some point on, with nobody outside ever knowing before it is too late.