There are fees for every exchange, not sure where you saw the no fees part.

Do you mean they give me a slightly worse exchange rate than I could get somewhere else? The “fee” line when I do an exchange is $0.00

They make money off the spread on exchanges. Exact same principle as Forex “no fees” - it’s the difference between buy/sell rates.

On the OTC side (which I guess you’re referring to?, CB sets their own spread , which makes it more akin to a fee. Even if CB is technically correct saying “0 fee”, they can still charge any price they want for buying vs selling.

> What does a decentralized exchange give me that beats that?

Owning the actual asset and not just an IOU

You can transfer from Coinbase to your own wallet.

Uh that'd be stealing and would make them immediately lose credibility. But if you're really concerned about it, move funds to your wallet as soon as you buy.

Because that's never happened (see: QuadrigaCX, Cryptopia, ...)

Doesn't Coinbase give you a wallet? What am I missing?

You don't have the private keys. If coinbase loses them, you're out of money. Possibly. They're insured supposedly, but if you have your own private keys then the only entity you have to deal with in this case is yourself (this can be both a positive and a negative, depending on how careful you are)

There is a "Coinbase Wallet," though, which is somewhat confusingly a separate app where you actually do hold your own private keys.[0]

You can seamlessly link your exchange account and your Wallet account so you can move the money right into your own Coinbase Wallet with your own private keys as soon as you're done with the exchange.

I'm not sure the parent comment meant that wallet, but Coinbase does "give you a wallet" if you want, complete with your own private keys.

[0] https://wallet.coinbase.com/faq/

You need to transfer the funds from your Coinbase account to Coinbase wallet. You’ll never have access to the private keys on Coinbase.

At that point, Coinbase wallet is the equivalent of Metamask et al

It would be, except that you can easily link the two accounts. Sure, that's roughly equivalent to making sure you have the Coinbase exchange address assigned to your wallet loaded into Metamask and your Metamask address loaded into the Coinbase exchange, but that takes a level of understanding that linking Coinbase Wallet to Coinbase exchange doesn't require.

Coinbase does "provide you a wallet." It just isn't part of the exchange.

For the average person, Coinbase is less likely to lose your coins than you are to lose your private key or get hacked.

I'm less worried about coinbase losing my keys than them randomly shutting my account down.

This will change in some years though. Conversion will cost less gas with L2. Things are progressing quickly on those problems. Dexs and liquidity pools will have near zero fees.

Personally, I think unless coinbase pivots, their current business model is not sustainable in the long term. But right now, coinbase is capturing value in a way that the early majority of crypto's adoption curve can digest.