Coinmama is a digital currency exchange that was founded in 2013. It is renowned for its variation in the payment options, which includes the ability to buy digital currency with Visa or MasterCard credit cards. This practice of this exchange may have earned its fans but mostly not among the investment advisors like purchasing any investment like digital currency with a high interest credit card and be risky for many investors. In September 2020, Coinmama negotiated a deal with Apple to enable the utilization of Apple Pay for the purchase of digital coins.
There are two ways in which Coinmama is different from other exchanges. One is that Coinmama does not allow transactions between the buyer and the seller. All the digital currencies that are sold are from the own inventory of this exchange, so the transaction takes place between the user and the company. And the second one is that Coinmama does not provide any wallet, which is a storage system for keeping the digital currencies. While there is no chance of the cryptos getting stolen, the user will have to use their own digital wallet for doing any transaction. This exchange is ideal for:
- Cryptocurrency traders.
- Bitcoin sellers.
This eight year old digital currency exchange has already gained massive popularity in the crypto market because of the unique features that it has to offer. Here is a list of all such features:
The users of Coinmama can purchase Ethereum, Bitcoin, Litecoin, Qtum, Ripple, Bitcoin Cash, Ethereum Classic, Tezos, Cardano, and EOS. However, the users can only sell BTC for fiat currency on this exchange. This can be a turnoff for the users who are looking to cash out their other digital currencies to make crypto-to-crypto trade.
The simple transaction flow of Coinmama which is purchasing and selling from the company directly offers itself to the simple design of the site. Users will have to select the amount they wish to buy either by amounts of BTC or by U.S dollar amount. This site offers fractional shares of Bitcoin so that the user can buy for as low as $50 worth of Bitcoin that is based on its present price of spot trading.
Cost And Transaction Fee
For trading in cryptocurrency, Coinmama charges a 2% fee above the market rate as set by TradeBlock’s XBX Index. Along with that, there is a commission fee of nearly 3.9% on crypto buys and up to 0.9% to sell BTC. By comparison, SoFi Active Investing charges 1.25% for trading Bitcoin, eToro takes less than 1% and Robinhood does not charge any fees for Bitcoin trades.
No Mobile App Or Crypto Wallet
While no crypto wallet for the storage of your funds discards the risk of the cryptos being stolen, the user will also have to purchase a crypto wallet from an outside vendor to store their cryptos. Many crypto beginners may want a one stop destination for all their crypto needs but Coinmama has failed to achieve this. Along with that kit does not offer any mobile application. The user will have to use it from the browser.
Coinmama never holds the digital currency funds of the user nor do they store the payment information which discards the risk of the user losing their crypto in any hack. This also prevents the user’s personal information from getting leaked out to the hackers.
Coinmama Pros And Cons
By now we know that the security and other features of this exchange are good enough, but there are also certain disadvantages of this exchange. Let us have a look at the advantages and disadvantages of Coinmama.
- Provides access to 10 cryptocurrencies.
- No fees for crypto withdrawals or deposits.
- Range of payment options.
- Higher fees compared to some other providers.
- Doesn’t enable crypto-to-crypto transactions.
- Do not offer any crypto wallet or mobile app.
The easy-to-use interface of Coinmama and the easy transaction flow may seem lucrative to those who are new to digital currency trading, but the fees of transaction and trading are high compared to other crypto exchanges. Regardless of the user’s choice, the user needs to understand that investing in digital currencies like BTC is highly fluctuating, it is always wise to never invest more than the amount you are ready to lose.