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Coinbase: Trade BTC, ETH, SHIB

latest release: 9.47.2 ( 25th October 2021 ) last analysed  12th October 2021 Custodial: The provider holds the keys 
4.7 ★★★★★
22nd June 2014

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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.

If you find something we should include, you can create an issue or edit this analysis yourself and create a merge request for your changes.

The Analysis 

(Analysis from Android review)

Coinbase: Buy BTC, Ethereum, SHIB, Bitcoin Cash, not to be confused with Coinbase Wallet — Crypto Wallet & DApp Browser No Source!  is one of the top 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.

Note: Coinbase.com does link to this app. It does also link to a Wallet page that links to Coinbase Wallet — Crypto Wallet & DApp Browser No Source! 


Verdict Explained

As the provider of this product holds the keys, verifiability of the product is not relevant to the security of the funds!

As part of our Methodology, we ask:

Is the product self-custodial? If not, we tag it Custodial! 

A custodial service is a service where the funds are held by a third party like the provider. The custodial service can at any point steal all the funds of all the users at their discretion. Our investigations stop there.

Some services might claim their setup is super secure, that they don’t actually have access to the funds, or that the access is shared between multiple parties. For our evaluation of it being a wallet, these details are irrelevant. They might be a trustworthy Bitcoin bank and they might be a better fit for certain users than being your own bank but our investigation still stops there as we are only interested in wallets.

Products that claim to be non-custodial but feature custodial accounts without very clearly marking those as custodial are also considered “custodial” as a whole to avoid misguiding users that follow our assessment.

This verdict means that the provider 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 control over the funds, so it is not a wallet where you would be in exclusive control of your funds.

We have to acknowledge that a huge majority of Bitcoiners are currently using custodial Bitcoin banks. If you do, please:

  • Do your own research if the provider is trust-worthy!
  • Check if you know at least enough about them so you can sue them when you have to!
  • Check if the provider is under a jurisdiction that will allow them to release your funds when you need them?
  • Check if the provider is 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.
The product 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 product 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.