Last updated on April 25th, 2017 at 10:18 am
IMPORTANT: As of December 7th 2016 Circle no longer allows the option of buying or selling Bitcoins through their services. They are now referring all of their customers to Coinbase.
Probably the biggest competition in the Bitcoin marketplace today lies within Bitcoin exchanges, the most dominant being Coinbase and Circle.
Today I’ve decide to test out these 2 exchanges head to head and see how much value for money I can get using $500. But I didn’t test only the fees and exchange rate, I also tried to figure which website makes the process easier.
Coinbase charges fees, Circle Doesn’t – Is that so….
The most noticeable difference between Coinbase and Circle are the transaction fees. Circle states:
“You shouldn’t have to pay fees to use your own money. We don’t charge fees when you convert funds to or from bitcoin with a linked bank account, when you store your bitcoin, or for bitcoin transactions”
Indeed when you buy Bitcoins with Circle you won’t pay a fee but it seems that circle $500 don’t come up as $500 worth of Bitcoins. This is due to several reasons:
- There is a credit card processing fee that is applied when buying your Bitcoins with a credit card through Circle. From what I’ve seen this adds up to 2.9% which is not exactly negligible.
- It seems that Circle doesn’t guarantee the exchange rate at the time of placing the order (unlike Coinbase). This can cause a difference in how much you pay (initially found this issue on Reddit).
Coinbase on the other hand charges a fixed 1% transaction fee no matter what payment method you use and a $ 0.15 fee for ACH deposits. These fees are pretty low compared to other alternatives out there that allow you to buy Bitcoins.
Circle has the easiest buying process I’ve seen to date
Until today I’ve bought Bitcoins through almost 10 different exchanges. I don’t think I’ve ever encountered a website that’s so intuitive as Circle’s. The simple design and sleek animation make it appealing and easy to use for even non tech savvy users.
But the real “magic moment” comes from the ability to purchase Bitcoin with a credit card within 2 minutes of setting up an account. Most websites require some sort of initial verification and until today the process of buying Bitcoins with a credit card was pretty complex. It takes about 2 minutes to complete the process with Circle and I’m willing to pay extra for that.
Coinbase has also done a great job on their website but the process is a bit lengthy and can wear you out. The main issue being the fact that you need to verify your back account and sometimes this can take a day or two.
Coinbase has something fishy going on..
Since 99Bitcoins deals with a lot of people who buy their first Bitcoin I’ve noticed something strange going on lately. On several occasions I’ve gotten emails from people claiming they placed an order on Coinbase and it got canceled claiming that their account is in “high risk”. Oddly enough all of these cancelation happened when the price of Bitcoin went up drastically.
Here’s an example of such a case which caused a delay of purchase for the user. One user was so angry that he went out and made a website called Coinbase Fraud, this websites shows real live examples of Coinbase cancelling orders when it benefits them due to changes in the price of Bitcoin.
I can’t say I’ve experienced such issues with Coinbase myself but it seems to me that I’ve heard about these kinds of stories so many times that there’s probably some truth in it.
Both mobile apps work great, support is also fine
Both Circle’s and Coinbase’s mobile app are pretty intuitive and easy to use. Having said that Circle does a much better job at creating an enjoyable experience (just like their website). At times when I needed support from Coinbase and Circle they both seemed to have responded in a timely manner and got my questions answered.
If you buy $500 worth of Bitcoin here’s what you’ll get
If you spend $500 with Coinbase at today’s exchange rate you’d get 1.3103BTC (all fees included). If you go with Circle you’d receive 1.2782BTC. This may seem that Circle is much more expensive than Coinbase, but it important to note that I’ve measured Coinbase’s ACH payment method with Circle’s credit card method (since I don’t have an American credit card which Coinbase accepts).
This mean that with Coinbase you’ll get the coin 2-4 days after you’ve made the purchase and with Circle you’ll get it instantly – so I guess you should figure out if 0.0321BTC is worth waiting 2 days (~roughly $11 at today’s exchange rate).
Circle is the winner by a nose in my book
After all is said and done, I prefer Circle to Coinbase. Their sleek design, ease of use and lightning fast transaction delivery creates a real “magic moment” for me. I also don’t mind paying more fees for this outstanding experience. If you’re all about saving as much as possible than Coinbase is probably the way to go, but if you want to avoid the hassle choose Circle.