Coinbase address still has a balance

Question

I understand that Coinbase creates many btc addresses per wallet. I am not sure though that if you have an overall zero balance (or $0.01 overall) all your associated btc addresses should also have a zero balance.

So, here is the actual question: I see that one of my btc addresses associated to one of my coinbase wallets (let's call the address ABC123) still has a bitcoin non zero balance. It's not a rounding issue as the balance is too large for this. Overall my coinbase balance is almost zero. Does this make sense?

When I go to https://bitref.com and check ABC123 I can see the balance.

Answer 1

Coinbase (the company) is not bound to any value presented in any block explorer or even in the actual blockchain. They decide what will be presented as your balance on their service's website, and hopefully it is always the same value that you expect to see.

Coinbase might allow funding of your balance through payment to bitcoin addresses over the bitcoin network, but in reality they will maintain a separate, much more efficient database than a blockchain to track that balance from that point on.

When you operate on those funds, you're operating on the number kept in Coinbase's database, not the one in the blockchain. It costs money (as fees paid in bitcoin) to move funds between participants on the network, so any transactions that can be kept off chain are done within their own database (like sending between two Coinbase users).

In case you are withdrawing bitcoins from Coinbase, they will have to use an on-chain transaction (eventually), but the funding to it can come from any other payment made to them. It doesn't have to be the same payment that you made.