Wallets are one area where these exchanges really differ. Coinify does not have a custodial wallet, which means it does not keep your assets on the stock market. To use Coinify, you will need a separate crypto wallet that you link to your account during purchase. Coinbase has a partnership with Ledger, one of the leading providers of hardware wallets.
If you’re new to using virtual currency, setting up a separate wallet can seem a bit daunting. It’s pretty easy to do, but you’ll need to do some research online to figure out the steps involved. You can choose a hot wallet (a wallet connected to the Internet) such as a Metamask wallet, or a cold wallet or a hardware wallet that is not connected to the Internet.
You will need to make sure that the cryptocurrency wallet supports the crypto you are purchasing. Some wallets, for example, only support assets built on the Ethereum network. You will end up with a starter sentence, which is usually a series of 12 words. Make sure you keep this in a safe place. If you lose it, you could lose access to your funds.
In contrast, Coinbase has both a custodial wallet and an external wallet. People who don’t want to worry about managing an external portfolio can leave their assets on the market. However, many crypto enthusiasts believe that you do not fully own your crypto if it is in a custodial wallet. If the crypto exchange gets hacked, you could lose your funds and the exchange could also freeze access to your account.
Coinbase also has its own non-depository hot wallet. The Coinbase wallet is easy to use and connects to your Coinbase account. Coinbase also works with other external wallets, but you may need to pay withdrawal fees to move your crypto. The Coinbase Wallet is a separate app which is also available for non-Coinbase customers.