It’s been 5 years since I first made a tutorial on Coinbase and I feel we are due an update, so for anyone who is new to crypto and is looking to get their hands on some Bitcoin or another cryptocurrency, here’s a quick guide to Coinbase – the most popular and easy-to-use fiat to crypto App (and website).
Founded in 2012, Coinbase is considered by the majority of investors as one of the best places to buy Bitcoin. At the end of 2017, Coinbase announced that it reached a user base of 13 million people. Since then, with the increased adoption of cryptocurrencies, it is no surprise that their user base have grown way over the 30 million mark. It’s become the go-to place for any new and seasonal investor alike.
It is fair to sat that this makes Coinbase the biggest and most respected Bitcoin platform in the world.
It is based in San Francisco (United States) and it operates in more than 30 countries worldwide.
It offers both an exchange and wallet in one, making it one of the easiest places to start with Bitcoin. Coinbase also supports other coins (altcoins) such as Bitcoin Cash, Ethereum and Litecoin.
You can use the desktop (website) version or their phone App which I find easier and quicker to handle.
Once you sign up and connect your bank card (or bank account is an option too), you can easily transfer funds in and out of your account and convert them to Bitcoin and back to fiat at will. Fiat is your government issued currency such as USD or EUR for instance. The currency you will use depends on the region you are in. If you are in the EU region, it will automatically default to EUR for you, while if you are in the states, it will be USD. You can check the list of all the countries that are supported here.
Coinbase charges a variable percentage fee of one percent for U.S. transactions ($1 min, $50 max) from a bank account or Coinbase USD wallet.
Purchases with a credit or debit card add on a 2.49 percent fixed fee (*if you are using a card in a foreign currency, please note that most likely your card provider will have a fee for the currency conversion. I use a British-based credit card but my account is in Euro since I am in Europe so I pay what they call “non-sterling fee” which is a percentage and will depend on your card.)
If you are located in the US you might be able to use Paypal too but this option is not yet open to the rest of the world.
If you register for Coinbase with this link, you will also get $10 worth in Bitcoin on your first $100 purchase (can be done in smaller amounts, doesn’t have to be one transaction).
The Coinbase wallet is very secure, accessed through the Web app or mobile app, utilises two-factor authentication and keeps redundant digital and paper backups of data “in safe deposit boxes and vaults around the world.” Plus, cash balances are insured up to $250,000 against theft or a breach in online storage. Further, Coinbase holds 98 percent of customer currencies offline to keep them safe from malicious hackers. This is further evidence to why Coinbase is a leader in digital currencies.
I won’t go into lengthy details on how to do the purchase since the interface is very intuitive and user-friendly but will list the steps you have to take.
- You sign up and verify your account.
As per every online regulated finance-related business you will be asked to verify your identity. This is the process known as KYC (know your customer) and as is the standard, you will be required to send a photo of your ID (or passport) and proof of address.
- Once this process is complete you will be able to start operating with the app/website and I urge you to go through the security settings in your account and make sure you have 2FA (two-factor authentication) enabled which will be with the help of an app called Google Authenticator (or another one if you have, such as Authy). This way you will have to input a code from your phone every time you login which makes it a little more secure.
To access this setting you will go to your profile settings and then security settings.
- You will notice that by default you have a few wallets/accounts already in your dashboard. These include a BTC – main Bitcoin wallet, a fiat wallet (for your base currency – usd or eur or whichever else you might have) and a few altcoins such as ETH (Ethereum) BCH (Bitcoin cash) BSV (Bitcoin SV) LTC (Litecoin) and many more.It is very important to notice that there is a difference between the main Bitcoin and the two forks of it which look very similar (but are way lower in value).
Bitcoin has a ticker symbol BTC while the two derivative forks are BCH (bitcoin cash) and BSV (satoshi vision) – these are not the actual Bitcoin you are looking to buy. At least not when you first get into crypto.
The main crypto is Bitcoin BTC and if you are investing for a longer term, it is the most safe and trusted of them all.
It might not be the first one on the list and in my case it’s further down as I have no balance in there currently, so make sure you find it – see where I highlighted it on my dashboard view. Just remember that it’s with an orange “B” logo while the bitcoin cash fork is with green and SV fork is lighter orange with some furry dragon. Currently you can’t actually buy SV anyway, so you probably will not have it in your dashboard, it was only sent to those who owed BCH prior to the fork in 2018.
- When you choose to buy Bitcoin (or another coin) you will go to the “Trade” option.
- You will select the amount you want to spend in your own currency
- You will choose the coin you are buying (it’s a drop-menu so you can choose Bitcoin or another one)
- Then you will select the card you will pay with (if it’s the first time you will have to enter the details, then it will be stored and you don’t have to input all the details again)
- once you do this, it will send you to the confirmation page as a last step and then you will complete the purchase.
Bear in mind that some banks do not want their customers to buy crypto so some cards will not go through or they might cancel your transaction later on and your funds will not be taken out. I had this done to me by MBNA – bank of America – after 2 years of using the card one day it got rejected and my Bitcoin purchase got cancelled. Barclays worked and many other cards are okay but not all. It’s a trial and error kinda thing.
Also, if you just go to the accounts page where you can see all the assets that are on offer, there should be the “buy” button next to each of them so you can also just use that.
- After you complete your purchase, the amount you bought will be added to your wallet of the relevant cryptocurrency. The money is now in that cryptocurrency and not in your base currency but you will always see a rough estimate of the total amount you have in your base currency. Do not be confused, this is just an estimate. If you hold your funds in Bitcoin, then your estimate will vary all the time simply because the price of Bitcoin varies all the time. When it’s up, your total estimate will go up too and vise versa.
This is the easy way to get your hands on some crypto. Should you decide to sell back into your base (fiat) currency, the process is the same apart from the fact that your fiat money doesn’t go straight into your credit card but this time it will go into your base currency account (in my case GBP but it could be EUR or USD etc…). It will sit there until you decide to withdraw it to your bank account (if your bank doesn’t blacklist you for doing so) or you could use alternatives. There are many other websites and service providers, some of which offer debit cards so you can withdraw directly from an ATM. You could as well go to a BTM – this is a Bitcoin ATM and withdraw directly from there in cash. All you need is your phone with your Coinbase App and the rest you will figure out on the spot. Ask me if you need more assistance.
Sign up for Coinbase today with this link.