Binance vs. Coinbase

Binance and Coinbase Global (COIN -3.17%) are two of the most popular cryptocurrency exchanges. Both allow you to buy, sell, and trade cryptocurrency, although their platforms are quite different.

Launched in 2017, Binance has quickly become the world's leading cryptocurrency exchange. It typically records the most daily activity of any crypto exchange and provides a wealth of features. But only investors outside the United States can use the main Binance.com platform. U.S. investors are limited to using the exchange's Binance.us version, which has fewer options in order to comply with federal government regulations.

Coinbase started in 2012, making it one of the oldest cryptocurrency exchanges. It's particularly popular in the U.S., and investors appreciate its user-friendly web platform and mobile app. For those interested in owning cryptocurrency stocks, it's also a publicly traded company.

For help with deciding between Binance and Coinbase, keep reading to learn more about each cryptocurrency exchange, including the platforms' unique features, fees, available cryptocurrencies, and security measures.

Image source: Getty Images.

Binance vs. Coinbase

Here's an overview of how Binance and Coinbase compare:

Source: Binance and Coinbase websites.

Does Binance or Coinbase have more features?

Both Binance and Coinbase are powerful cryptocurrency exchanges. With either one, you can buy and sell various types of cryptocurrencies using fiat money and other cryptocurrencies. Both exchanges also have web platforms and mobile apps.

Now let's look at what makes them different.

Binance features

Binance is clearly designed for advanced traders, and it offers considerably more features than Coinbase and most other exchanges. Multiple trading interfaces, including classic and advanced versions, are available on all versions of the Binance platform, and Binance users worldwide can stake — lend — their crypto to earn interest.

These features are only available on the non-U.S. version of the Binance platform:

• Margin trading
• Derivatives, including crypto futures, options, and leveraged tokens
• Crypto borrowing
  
• Non-fungible tokens

Coinbase features

Coinbase prioritizes usability for traders of all experience levels. The Coinbase platform is easy to navigate with an intuitive design, whether you access it on a computer or through the Coinbase mobile app. It functions similarly to any stock brokerage.

Coinbase Pro is the more advanced version of the Coinbase trading platform that is available at no extra charge. Coinbase Pro provides an exchange where cryptocurrency traders can buy and sell from one another, and it also offers charting features.

There are a few special features that stand out on the Coinbase platform:

• Learn and earn: This section allows users to earn free crypto by completing educational modules.
• Newsfeed: A built-in newsfeed that keeps users informed about the latest in crypto.
  
• PayPal integration: Users can buy crypto using PayPal (PYPL -1.45%) and withdraw funds directly to PayPal accounts.

Comparison of Binance and Coinbase fees

Trading fees are reasonable on both Binance and Coinbase. Binance charges fees that are lower overall and also less complicated. One of the main criticisms leveled against Coinbase is that its fees are difficult to understand.

Binance fees

Binance charges these fees:

Source: Binance.

The Binance trading fee is between 0.02% and 0.10%, depending on your trading level. Binance has multiple VIP levels, with discounted fees for investors who meet minimum trading and balance requirements.

Coinbase fees

Coinbase charges a spread of about 0.50% on cryptocurrency purchases and sales, meaning that buyers pay about 0.5% more and sellers receive about 0.5% less. The actual spread as a percentage varies, depending on market fluctuations in cryptocurrency prices.

In addition to the spread, Coinbase charges a fee for every transaction, including deposits and withdrawals. This is either a flat rate or a variable percentage, whichever is greater.

Here are the flat rates that Coinbase charges, which are based on the transaction amount:

Source: Coinbase.

Coinbase also assesses the payment method, and if the fee associated with the payment method is greater than the fee associated with the transaction amount, then the payment method fee is charged. The variable percentage rates change by region and the payment method. For U.S. Coinbase users, these are the variable percentage rates associated with each payment or withdrawal method:

Source: Coinbase.

Currencies available on Binance and Coinbase

Binance.com offers 591 cryptocurrencies, while Binance.us supports only 58. Coinbase offers 75 cryptocurrencies. Binance has issued its own currency, Binance Coin (BNB 3.72%), which is one of the largest cryptocurrencies, but it is not available on Coinbase.

Even though the international version of Binance clearly has the largest number of currencies, cryptocurrency selection is a strong point of all three exchanges. Many top cryptocurrency exchanges offer only 20 to 40 coins.

What security measures do Coinbase and Binance use?

Both Binance and Coinbase employ strong security measures. Coinbase says its platform has never been hacked whereas Binance was hacked on May 7, 2019. The hackers stole 7,000 Bitcoin (BTC 0.83%) worth approximately $40 million at the time. Binance pledged to cover the incident in full so that none of its users' funds would be affected.

Both exchanges offer many of the same security features, including:

• Two-factor authentication (2FA): Account access requires two forms of authentication, such as entering a password and verifying a code sent to your phone or email address.
• Address whitelisting: This optional feature enables withdrawals only to addresses that you "whitelist" or pre-approve.
• Device management: Records are kept of the devices that access your account, and you can sign out devices that you don't recognize.
• Cold storage: Funds are held in cold storage, which is offline, making them more difficult to steal. Coinbase reports that 98% of customer funds are in cold storage, while Binance doesn't provide an exact percentage but reports that the vast majority of customer funds are in cold storage.
• FDIC insurance: Just like with bank deposits of fiat money, Federal Deposit Insurance Corporation (FDIC) insurance guarantees against losses of up to $250,000 per individual. Binance.us and Coinbase both offer FDIC insurance on U.S. dollar deposits.
• Crypto wallets: High-quality hot (online) wallets, which enable users to store their crypto funds.
  

Should you use Binance or Coinbase?

The international version of Binance is best for experienced investors who want advanced features and low fees. Binance.com is a powerful platform with many different features, including multiple trading interfaces, staking, and derivatives. It also has a great cryptocurrency selection, with hundreds of coins available for trade.

But for U.S. investors, Coinbase is likely your best option. It's one of the best crypto exchanges for beginners because of its ease of use and educational content, and more experienced traders can opt for Coinbase Pro. Both versions of the Coinbase platform have plenty of cryptocurrencies from which to choose.