What is Coinbase Wallet?

Coinbase Wallet is a non-custodial cryptocurrency wallet that allows users to manage and store their digital assets. The wallet was developed and created by popular cryptocurrency exchange Coinbase, from where it draws its name.

Unlike Coinbase’s wallet for its main exchange, Coinbase Wallet gives users complete control over their private keys. This means that users, rather than Coinbase, are in full control over their digital assets and are responsible for the security of their cryptocurrencies and NFTs. 

Coinbase Wallet acts as a gateway to decentralized applications and web3, enabling users to explore, trade and interact with various blockchain-based platforms.

History of Coinbase Wallet

Coinbase Wallet was originally called Toshi when it was launched in 2017 and was initially focused on the Ethereum ecosystem. Toshi was launched as a mobile app and featured a browser that enabled users to easily find and interact with various dapps. Toshi was rebranded to Coinbase Wallet in August 2018. 

In February 2019, Coinbase Wallet extended support to Bitcoin, Bitcoin Cash, and Litecoin.

In February 2020, Coinbase Wallet added a username feature that allowed users to send and receive funds from their address names rather than having to find long crypto addresses.

Coinbase Wallet rolled out in-app purchases of cryptocurrency with fiat in October 2020. Before this, users had to set up an account with a centralized exchange, purchase crypto and send it to the wallet for storage.

In July 2021, support was extended to the Polygon Network. Later that year, Coinbase Wallet launched its own standalone browser extension. This extended the use of Coinbase Wallet beyond just mobile applications and allowed users to access their wallets across different platforms.

In 2022, Coinbase Wallet expanded its support to Solana, Avalanche and Binance Smart Chain, allowing users to store and trade thousands of tokens and NFTs in the app.

Coinbase Wallet launched in-app messaging and Ethereum staking solutions in collaboration with Kiln in 2023.

In July 2024, Coinbase Wallet announced its new smart wallet. Smart wallets use smart contracts to simplify and abstract away certain aspects and complexities associated with setting up and managing a traditional non-custodial wallet. Coinbase claims it simplifies onboarding and removes the need for speed phrases, saying that users can use their Face ID, Google Chrome profile, Yubi Key or fingerprints to access and use their funds.

Furthermore, developers can choose to sponsor transaction gas fees for their customers, removing the need for users to top up their accounts before transacting.

Features and functions

Coinbase Wallet offers various features that cater to both novice and experienced users. Users can securely store, manage, send and receive cryptocurrencies and NFTs across many layer 1 networks.

Users can carry out token swaps within the app by connecting to various decentralized exchanges, with adjustable network fees depending on their transaction speed preferences. The wallet also supports fiat purchases of crypto, allowing users to make purchases directly in the app with credit or debit cards, depending on their location.

Coinbase Wallet can integrate and interact with countless dapps across the cryptocurrency ecosystem and on a wide variety of networks. Users can access and explore DeFi projects and other decentralized applications through the built-in dapp browser.

Coinbase Wallet’s security features include two-factor authentication, biometric security options and the ability to connect with hardware wallets like Ledger for added protection. Furthermore, community and customer support is available for those who run into issues.

What’s needed for a Coinbase Wallet account?

To access Coinbase Wallet, prospective users either need a mobile device for the app or a browser for the Coinbase Wallet extension. 

Setting up the wallet involves creating a secure password and backing up a 12-word seed phrase, which is crucial for regaining access to the wallet if a user loses their device, or to transfer it to another platform. 

Unlike Coinbase.com, users do not need to create an account with Coinbase to use the wallet, and don't have to provide personal identification details. Coinbase Wallet accounts are free to create.

Are there any risks to using Coinbase Wallet?

While Coinbase Wallet offers many security features, using Coinbase Wallet nevertheless involves certain risks that users should be aware of. As a self-custody wallet, the responsibility for storing the private keys lies entirely with the user; losing these keys or the recovery phrase could result in permanent loss of access to the wallet.  Coinbase Wallet does not offer institutional support for recovery, meaning users are fully responsible for their wallet's security and access. 

While Coinbase Wallet includes security measures like transaction previews and a dapp blocklist, users must remain vigilant, as interacting with dapps still carries the risk of encountering malicious platforms that could compromise assets.

Additionally, since private keys are stored on the user's device, the security of the wallet is directly tied to the security of the device itself; a compromised device could put the wallet at risk.