Do You Own Your Crypto on Coinbase? (2024)

The answer to whether or not you own the crypto in your Coinbase account is complicated.

The answer is:

You kind of do, but also kind of do not!

Understanding Ownership on Coinbase

Before we delve into whether or not you truly own your crypto on Coinbase, let’s first understand how ownership works on this popular exchange.

When you purchase a cryptocurrency through Coinbase:

• Coinbase technically owns that particular asset while it is stored in their digital wallet
• Coinbase is only holding it on your behalf.

This means that Coinbase has full control and custody over your crypto, however you’re entitled to it.

Think of it exactly like storing money in the bank.

• The bank holds your money for you.
• They control it and hold it.

But who owns it?

Well, the bank physically owns it but the money is really owned by you.

That is how it works when you have money on Coinbase.

What Does This Mean for You?

At first glance, this may seem concerning.

After all, the whole point of cryptocurrency is to have decentralized ownership and control over your assets.

The main things to note are:

If you want to own your crypto fully, use Coinbase to buy but don’t store it long term.

Move your coins of Coinbase into a wallet that you control.

Owning Cryptocurrency on Coinbase vs. Holding Physical Cash

Many people compare owning cryptocurrency on an exchange like Coinbase to holding physical cash in a bank.

Just like how the bank technically owns your money while it is deposited with them, Coinbase technically owns your crypto while you store it with them. However, you can still access and use your funds as you please.

The main difference is that with cryptocurrency, you have more control over when and how you want to use your assets.

How to Take Full Ownership of Your Cryptocurrency

If you prefer to have complete ownership and control over your cryptocurrency, there are a few ways to achieve this while still using Coinbase as your exchange.

One option is to transfer your crypto to an offline wallet, which is a physical device that stores your private keys offline. This way, you have complete control over your assets and they are not vulnerable to online hacks.

Understanding Coinbase’s Security Measures

While it is important to have ownership and control over your cryptocurrency, it is also crucial to consider the security measures in place on Coinbase. As one of the largest and most trusted exchanges in the industry, Coinbase has robust security protocols in place to protect user funds.

Some of these security measures include:

• multi-signature technology
• cold storage

This means that even though Coinbase technically owns your crypto while it is stored on their platform, they have taken extensive precautions to ensure the safety of your assets.

The Importance of Proper Security Practices

Even with the security measures in place on Coinbase, it is always important to practice proper security measures when it comes to managing your cryptocurrency. This includes using strong passwords, enabling two-factor authentication, and keeping a backup of your private keys in a secure location.

The Bottom Line

Ultimately, the decision to fully own your cryptocurrency on Coinbase or transfer it to an external wallet depends on personal preference and risk tolerance. Both options have their own advantages and disadvantages, so it is important to do your research and understand the implications before making a decision.