This tutorial will cover how to import your Coinbase Commerce seed into an external wallet (such as Electrum). This could help online merchants who want to link their Coinbase Commerce wallet to third party wallets. Although Coinbase Commerce claims to enable you as the merchant to “be your own bank”, some users have reported having difficulty importing their wallets to third party wallets. Coinbase users on this reddit thread have hypothesized that Coinbase deliberately obfuscated the key derivation path in order to force users to use Coinbase Commerce’s own panel. This effectively boxes users inside the Coinbase platform while technically still providing the 12 seed words which gives the illusion of having complete control of the cryptocurrency wallet. Remember the adage usually given by Andreas Antonopoulos: “Not your keys, not your coin.” When the users on the thread tried connecting with Coinbase support through various channels, they were met with an unsatisfactory answer and at worse, none at all. Other users who had the same problem who tried to workaround the problem by just using the Coinbase platform to send out BTC, reported very high fees for the transfer.
The Solution to Importing Your Coinbase Commerce Seed into an External Wallet
- Install and open Electrum Wallet on desktop
- Create a wallet
- Import your seed phrase. Check BIP39 checkbox in advanced settings to proceed.
- 3a. Now, if your receiving addresses start with 1… select legacy (p2pkh) type of address.
- 3b. If your receiving addresses start with 3… select p2sh-segwit AND change derivation path to m/44'/0'/0'
- Again, make sure derivation path is m/44'/0'/0'
- Complete wallet setup. It should sync and show your incoming Coinbase Commerce transactions.
- If you want a fine-grain control over withdrawal fee (and know what you are doing…) go to Tools> Electrum Preferences > Transactions > Advanced preview ✔️. This will enable advanced sat/byte price controls when you click “on Pay” button.
- If you are not seeing some coins, you might need to increase your wallet gap limit.
- Go to View > Show Console. Then in the console enter wallet.change_gap_limit( 100 )
- If you run a website where you feel there might be more than 100 people initiating a transaction and not completing it in a row - you might want to increase that gap limit.
What is Coinbase Commerce?
Online merchants who want to make cryptocurrency payment options may use Coinbase Commerce as part of their service. If you’re a merchant and want to take advantage of the benefits of accepting cryptocurrencies as payment, Coinbase promises a seamless experience.
You will have to sign up to Coinbase Commerce apart from your personal Coinbase account. The service leans towards user-friendliness with WooCommerce and Shopify integration. Plugins for 12 other eCommerce platforms are also available. Through the service, your online business can accept Bitcoin, Ethereum, DAI, Litecoin, Bitcoin Cash or the USDC stable coin. This allows merchants to forego traditional solutions such as credit card payments which have to go through third party financial institutions such as banks and other intermediaries.
“Not your keys, not your coin”
True financial sovereignty means having complete control over the primary mode of access to your coins - this is your wallet. Although many services try to portray this attribute to their user-base, some of them may be misleading others. As a business, Coinbase has the right to come up with its own business model. But for best practices, it would be better if they do not claim to allow its users to rely on a third party service. The ethos of Bitcoin and the security of your funds means having control - and more importantly, responsibility over how you handle your coins.