The Technology of Coinbase Wallet
We can't talk about coinbase Wallet without talking about DeFi wallet.
DeFi wallet it’s crucial that the gateways for interacting with web 3 are intuitive, secure, and accessible while maintaining the core ethos of “being your own bank”.
Over the past few years, we’ve seen drastic improvements to wallets and other asset management tools, allowing investors and users to safely and easily access the next generation of financial technology.
An Overview on DeFi Wallets
Thanks to the non-custodial nature of DeFi wallets, users can safely store their own funds without having to rely on third-party institutions to hold their assets.
In the earlier days, wallets such as MyEtherWallet dominated the market while providing clunky UI/UX. Fortunately, within the past year, many wallets have upped their game and are creating better interfaces with significantly better user experience.
DeFi applications are accessed by connecting one of the web3 wallets mentioned below, so let’s dive into the overarching characteristics along with our top picks DeFi Wallet Characteristics
The core components of most DeFi wallets include:
Non-Custodial – Users can send and transfer funds knowing they are the only one who has access to those funds
Key-based – Underneath the hood, all DeFi wallets have a unique keypair. This is different from centralized wallets as users are responsible for the safekeeping of their private keys, often introduced through a 12-word seed phrase.
Accessible – Virtually all non-custodial wallets can handle a suit of assets, with Ethereum-specific DeFi wallets allowing users to deposit ETH in tandem with stablecoins like Dai, ERC20 tokens like KNC and ERC721 tokens like Axies.
Compatible – As stated above, virtually all DeFi wallets are accessed by connecting a web3 wallet. Mobile wallets have begun to integrate dApps browsers to make it easy to connect with DeFi applications without having to every leave the app. And they different types of wallet
Coinbase Wallet : is a software product that gives you access to a wide spectrum of decentralized innovation buy and store ERC-20 tokens, participate in airdrops and ICOs, collect rare digital art and other collectibles, browse decentralized apps (DApps), shop at stores that accept cryptocurrency, and send crypto to anyone around the world.
If you’re looking to simply invest in digital currency - Coinbase Consumer at coinbase.com remains the easiest place to buy, sell, and manage your digital currency.
Can I switch from my existing wallet app like Metamask, MyEtherWallet, etc.?
Every wallet uses a private key to secure its assets which you can import into Coinbase Wallet. Just look for the 12 word recovery phrase or mnemonic in the settings menu of your current wallet and then use that same 12 word phrase to sign into Coinbase Wallet.
Coinbase Wallet is a user-controlled, non-custodial product. The app generates a 12 word recovery phrase which is what gives you, and only you, access to your account to move received funds. Coinbase will never have access to this seed, meaning that we cannot move funds on your behalf even if you lose access to your recovery phrase.
We built an encrypted Google Drive and Cloud recovery phrase backup feature to help protect against seed loss.
We encourage you to back up your recovery phrase using both the cloud backup feature as well as writing down your recovery phrase and storing it in a secure location. To access the backup features, tap Settings, and then Recovery Phrase.
Can I transfer funds between Coinbase.com and Coinbase Wallet?
Transfer : transfer funds between both products at any time. You can link your Coinbase account to Coinbase Wallet from the settings page of your Coinbase Wallet app.
Connecting your accounts allows you to quickly and easily move funds between your Coinbase and Coinbase Wallet accounts. To transfer funds from Coinbase to Coinbase Wallet go to Settings in your Coinbase Wallet app and select Transfer. To transfer funds from Coinbase Wallet to Coinbase.com click Send on the Coinbase Wallet app home screen below your balance. Then you select the currency and amount you’d like to transfer. When prompted to enter the address you would like to send to, select Coinbase under suggested.
All transfers between your Coinbase and Coinbase Wallet account are not instant transactions. They are completed on-chain and require confirmation on the network before being processed.
All transfers from Coinbase Wallet to Coinbase.com will be subject to Coinbase availability to withdraw periods and any restrictions outlined in Terms.
If you are sending an ERC-20 token (eg. USDC, DAI, BAT, MKR etc.): You will need ETH in your Coinbase Wallet account in order to pay a miner’s fee when sending
Coinbase Wallet is a multi-coin wallet, ethereum wallet, and ethereum browser app that lets you store coins, manage Ethereum-based tokens, and access DApps. Please note that “Coinbase Wallet” is not the same product as Coinbase’s main platform “Coinbase Consumer.”
In other words, Coinbase Wallet is a phone app for Android and IOS by the company Coinbase that pairs with their other products to let you store, send, and receive coins like Bitcoin and Bitcoin Cash, Ethereum, most Ethereum Tokens, and ETC… and let’s you access DApps on the Ethereum network!
That means:
Like the wallets on Coinbase account (Coinbase Consumer) you can store coins like Bitcoin on this wallet.
Like MyEtherWallet, Coinbase Wallet is a place to store Ethereum tokens (for example both ERC-20 and ERC-721 tokens).
Like MetaMask and a web browser, Coinbase Wallet is an interface for accessing Ethereum-based applications (for example decentralized exchanges or DEXs).
And, it is a wallet that qualifies you for airdrops and other giveaways (i.e. unlike coins kept on exchanges you qualify for airdrops with your Coinbase Wallet address).
Although it is neat that you can store some non-ethereum related assets on this wallet (that was an updated post launch), its main function right now is being a sort of Ethereum-based wallet and Ethereum DAapp browser, so the rest of the page will focus on those functions.
Bottomline: There is finally a user friendly alternative to Metamask and MyEtherWallet for newcomers who are just figuring out Coinbase. Also, it is worth noting that although Coinbase didn’t just add every ERC-20 and ERC-721… they kind of did via Coinbase Wallet.
IMPORTANT:
When you create Coinbase Wallet you’ll get a “recovery seed.” Make sure to copy it exactly and store it somewhere safe and offline. It is like a private key to a crypto address, it can be used to access your wallet, never share it and never lose it.
Coinbase Wallet essentially replaces the need to use MyEtherWallet plus MetaMask and thus greatly reduces the learning curve for new Ethereum users.You can play around with DApps using Coinbase Wallet without having any ETH. However, to get the full experience you’ll want to send ETH to your Coinbase Wallet address.
The main Coinbase [the company] platform, the one you access via Coinbase.com, is also sometimes called Coinbase Consumer.
Disadvantage
- Don’t Rely on Coinbase Wallet for Fiat Values: Coinbase Wallet tracks dollar values in theory, but some dollar values I’ve seen have been wildly inaccurate. It can help to use this feature, but don’t rely on it. Double check with Coin Market Cap for current rates before you buy/sell or if you simply want a correct tally of the fiat value of your tokens.
- You can’t reverse transactions, but failed transactions do refund tokens: Transactions done on DEX exchanges can’t be reversed once they happen. So if you overpay or underpay or buy sell the wrong token or amount, you are out of luck. However, if a transaction doesn’t go through, you’ll get your coins back minus a network fee. DEX exchanges are smart contract-based, so what happens after you commit funds is out of the hands of people and in the hands of the code behind the DEX.
- Coinbase Wallet is a type of custodial wallet. Ultimately you don’t directly control your private keys, and thus there are some limitations here. If for example you own a token that migrates to its own blockchain, and you need your private key to claim the token on the new blockchain, it won’t be possible with Coinbase Wallet.
Coinbase actually has two core products; a broker exchange and a professional trading platform named GDAX. However, the two can be used independently from one another.
So, you can keep your crypto on the Coinbase platform, if you wish. However.
You should think about getting a hardware wallet instead — these are the safest type of crypto wallets!
Coinbase is often used as an entry point into the crypto market. Through it, you can Purshase Bitcoin, Litecoin, Ether and Bitcoin Cash. These four digital currencies are the only ones you can buy from Coinbase.
>Conclusion.
Coinbase will only offer coins that are guaranteed currencies or commodities.
