In this review, I will highlight the main differences between Exodus, the Coinbase Wallet and Coinbase exchange
Let’s dive in.
Exodus vs Coinbase exchange vs Coinbase wallet at a glance
Exodus is a cryptocurrency wallet in which you can store multiple types of cryptocurrencies. Coinbase on the other hand is one of the largest cryptocurrency exchanges where you can trade a variety of crypto assets. Confuginly enough Coinbase also operates a wallet called Coinbase Wallet that is for storing cryptocurrency assets and is not part of the exchange.
Here are the key differences between the three
1. Private keys
With Exodus and Coinbase wallet, you are in complete control of your private keys to your wallet. These are locally encrypted on your device. Only you have access to them and if you lose them customer support can’t help you restore them*.
The coinbase exchange however does not give you the private keys to the crypto stored on the exchange. The address is unique and only holds your crypto but you can’t move it. The exchange has to do it for you.
In crypto speak we say that Exodus and Coinbase wallet are non-custodial wallets.
Why should you care?
Most crypto techies believe you should hold the keys to your wallet. For example, if Coinbase, the exchange, were to go bankrupt you would not be able to recover your crypto. Crypto exchanges are not FDIC or SIPC-insured like banks are. On the other hand, storing your crypto in a non-custodial wallet such as Coinbase Wallet or Exodus means no one can mess with your crypto.
Self custody vs no custody
The drawback of a self-custody wallet is that you are responsible for your seedphrase. If you lose the seedphrase that’s it. There is no one who can help you. There are exceptions to this rule with some wallets providing backup options. But then again a backup option involves a third party managing that process for you which increases the risk of getting hacked.
Most people consider hardware wallets to be the safest option. These are devices that look like a USB and are not connected to the internet. You still need a hot wallet to manage your hardware wallet. Exodus is compatible with Trezor hardware wallets while Coinbase wallet is compatible with Ledger.
In scared to store a seed phrase
Most people either don’t know about wallets or are too scared to manage their own keys. For them, they prefer to trust a large crypto exchange such as Coinbase. Coinbase is a publicly traded company with a reputation to manage. While it has been hacked in the past it compensated users. In addition, the Coinbase exchange has a free storage solution called vaults. When you store your crypto in a coinbase vault there is a minimum time limit of 48 hours for transactions to go through during which time you would be alerted about any transactions and would have time to act in case you didn’t initiate them. You can also set multiple approvers. You can find out more about Coinvase vaults here. It’s a good solution if you want to increase the security of your funds on the exchange but don’t want to manage a separate wallet.
How private keys and wallets work
The private keys to your wallets are derived from a 12-word recovery phrase that is generated when you first set up a wallet.
It might look like this
cat phone university potato raft situation control desk sunlight house checkers fun
Any geek can cryptographically derive all your private keys from this seed phrase.
You need to write this down on paper, offline so that no one can steal them by hacking into your computer.
*The coinbase wallet mobile app gives you the option to encrypt the keys in your Google Cloud account which protects you against your own idiocy of losing them. Critics argue that storing keys in any form online is not safe.
It’s important to know that a wallet does not store your crypto. Your crypto by definition lives on a digital ledger called a blockchain and has data such as address xyz owns 2 BTC. You can only move that crypto if you have a secret code called a private key. If you have the private key to the address you can move the crypto. Anyone with access to the private key of an address will be able to send those crypto coins elsewhere.
2. Web 3 integration
Both Exodus and Coinbase wallets allow you to participate in decentralized finance DeFi. Here are some examples of what you can do with these wallets
- Staking: you send your crypto to a validator who verifies transactions on a proof-of-stake blockchain. In return for doing this, you earn a yield. This can be anywhere between 3% and 20% depending on the coin. If you plan on holding crypto for a long time it does not make sense not to stake. It’s like leaving your dollars to devalue at the rate of inflation in a current account rather than investing them in short-term treasuries for 4.5%. Here are some resources you can use to understand staking better. Keep in mind that coinbase exchange allows you to stake your asset directly from the exchange interface. Find out more here https://elementalcrypto.com/tips-and-tricks/what-is-a-coinbase-vault/
- Join a liquidity pool. By providing a pair of cryptocurrencies to a decentralized exchange you can earn fees from users who swap cryptocurrencies on the exchange. You can find out more about how this works by learning about Uniswap
- Lend your crypto and earn interest. There are loads of protocols out there that automate crypto lending. Check out Compound and What is DAI for more.
- Use your crypto to take out a loan.
Those are just a few examples. There’s a whole new world that opens up as you become more involved in crypto and you need a wallet to do that.
Also, note that both Coinbase Wallet and Exodus have a Chrome browser extension that you can use to connect to different decentralized apps (dApps) in DeFi.
KYC stands for Know-your-customer. In short, exchanges need to comply with local KYC and AML (anti-money laundering) regulations which means they need to collect your personal information and you need to verify your ID. Most wallets on the other hand including Exodus and Coinbase Wallet don’t ask for any information. They won’t even ask you for an email address to set up your wallet. If you care about preserving your privacy then choose one of the wallets. You are still going to need to get your hands on some crypto and doing that anonymously nowadays is way more challenging. See buying Bitcoin anonymously for more.
All three options allow you to swap one crypto for another.
However, if you plan to trade frequently then you should choose Coinbase exchange. Here you have a wide variety of cryptocurrencies to choose from and you can set custom orders such as stop loss orders or limit orders.
If you want to store your NFTs and those NFTS belong to different blockchains then Exodus is your best bet. Because it supports multiple crypto blockchains you can store all your NFTs and view them in the integrated NFT gallery. The Coinbase wallet also supports NFTs but it is more restricted as supports fewer networks
6. Networks and tokens
The coinbase exchange has the widest range of token and coin support. So if you want to buy and store a random coin you are more likely to find it on Coinbase that the other two. Exodus comes in second with support for 364 cryptocurrencies while Coinbase Wallet comes in third with support for
- Avalanche C-Chain
- BNB Chain
- Gnosis Chain
- Fantom Opera
Coinbase wallet: English
Coinbase exchange: English, Spanish, French, German, Italian, Russian, Portuguese, Japanese, Korean, Chinese Traditional and Chinese Simplified.
Exodus: English and Spanish (being tested)
Coinbase is being scrutinized by the Securities Exchange Commission at the time of writing. Any exchange is always at the risk of being shut down or ordered to freeze assets and so on. Walles on the other hand are not managed by any central intermediary and have thus far escaped the purview of regulation.
Here are similarities between the three that make me indifferent
1. Buying crypto
You can buy crypto from within the app interface for all three products
The coinbase exchange allows you to deposit cash via multiple methods. You can do instant debit card or credit card purchases or you can do an ACH bank transfer in the United States or a wire transfer or sepa transfer if you are based outside the US. The bank transfers usually take 3-5 business days
To buy on the Coinbase Wallet you need to hook it up to the Coinbase exchange. This is where the main synergy is between the two and why coinbase developed the wallet in the first place.
To buy crypto using fiat currency on Exodus, Exodus partners with third-party integrations such as MoonPay. You need to KYC on MoonPay and then you will be able to use the same methods to deposit cash and buy crypto as you can on the Coinbase Exchange
The Exodus platform has a desktop app and mobile app for iOS and Android plus a Chrome extension
Coinbase Wallet is only available as a mobile app and a Chrome extension
Coinbase exchange is available as an app on mobile devices and as a website in your web browser
You will need to pay network fees to send crypto no matter which options you choose. This is because when you make a blockchain transaction the miner and validators who confirm that transaction need to be rewarded.
Coinbase exchange charges between 0.6% and 0.0% depending on the amount you are trading and the type of trade you are making. If you are a rookie and plan to trade with less than $10,000 then you should account for 0.6% in trading fees.
Neither of the wallets charges you anything for storing crypto on the wallets. The way they make their money is through the deals they cut with the third-party providers they use. For example, both Coinbase Wallet and Exodus app have a built-in exchange and partner with other exchanges so that you can swap one crypto for another. They may charge a surcharge or have a kickback from the exchanges they work with. Neither is very transparent about what they charge
All three score cookie points for transparency. While the only one that is completely open source is the COinbas wallet both the exchange and exodus are publicly traded. Exocuds is the only wallet I know of that files quarterly financial reports and you can easily find information on the Exodus team.
5. UX and ease of use
The user experience for all three apps is well thought out. If I was a stickler I’d call out Exodus for not tagging their bottom menu which makes it less intuitive to navigate in the beginning. The other thing about Exodus is that it does not tell you that you need to back up your secret recovery phrase. For new users, this is a critical step they need to take and the interface does not force them to do that.
6. Security settings
You can secure both Exodus and Coinbase Wallet with a password and fingerprint ID. Coinbase Wallet allows you to set up two-factor authentication which makes it slightly harder for hackers to get into your wallet.
Final verdict: which one should you choose
If you need a place to store your digital assets and feel you are responsible enough to manage your own see phrase then use either of the two wallets. Exodus will provide you with a bit more breadth in terms of cryptocurrencies supports. Coinbase Wallet backs up your seed phrase in you cloud drive so you have some way to recover your seed phrase of you lose it.
If you want to be able to participate in Defi then use a wallet
Those who have a large amount of crypto should consider a cold storage wallet such as a Trezor hardware wallet or ledger device.
If you don’t trust yourself with managing seed phrases then use Coinbase and use the Coinbase vault.
In general, it would be good to be diversified across multiple wallets if you have a large amount of digital currencies.
If you plan on trading multiple cryptocurrencies then just the Coinbase exchange.
As you forage into crypto you are bound to use multiple exchanges and multiple wallets.
- Official exodus website
- Coinbase wallet
- Coinbase exchange
- Exodus wallet review
- Ledger wallet review
- Trezor wallet review
Are you wondering whether you should use multiple crypto wallets or one wallet to rule them all? Using many wallets means you need to manage multiple seed phrases and makes it hard to keep track of your total portfolio. Using a single wallet exposes you to more risk. What if you get hacked or lose your seed phrase? What if you lose your device if you use a hardware wallet? Is there even a single wallet that can accommodate everything you want to do with your crypto assets? Having used more than 17 different wallets, I guarantee you that you will end up using many wallets yourself as you become better acquainted with the world of crypto. Read more.