Coinbase for Beginners
Coinbase is a US-based company that provides an easy way to buy, sell, and store cryptocurrency. It has been in business since 2012 and has served over 10 million customers. This article will cover what you get when you sign up with Coinbase, buy coins (Bitcoin or Ether), sell coins through Coinbase, store your coins on Coinbase, and the security of the service. The Coinbase API docs can be found here, which include an explanation of the endpoints used in this article.
When you sign up for an account on coinbase.com, you automatically get a wallet for each of its supporting coins: Bitcoin, Ethereum, and Litecoin. It is also possible to store these three coins on a smartphone or tablet through a mobile app. It should be noted that these apps do not offer 2FA (two-factor authentication) or multi-factor authentication yet.
Is Coinbase free?
It is! But there is a catch. While the signup process is entirely free, transactions on Coinbase are not all free. A fee, known as a network fee, will be deducted from your marketing. This fee varies based on what coin you send and where you send it. For example, if you want to send $1 worth of Bitcoin from Coinbase to another wallet address, Coinbase charges (a $0.01 fee per transaction). If you buy one price of Bitcoin with your bank account or credit card, Coinbase charges 4% ($0.04 fee per transaction).
How to open a Coinbase account
Click on the signup link here or at coinbase.com/signup and follow the registration steps. The site is straightforward to use. If you already have a Coinbase account, verifying your new account will not take long. You can verify your identity by providing a government-issued ID (copy of passport, driver’s license, etc.). To help prevent fraud, all accounts must pass a 2FA password check using Google Authenticator when they first sign up. After confirming your account by entering an email and password, you’ll be prompted for a phone number that can receive text messages that update 2FA codes.
How to buy and sell
1. Buy Bitcoin, Ethereum, or Litecoin with USD
GDAX has a reasonably low transaction fee, but you have to pay it every time you buy or sell, which lowers your profit margin. Coinbase offers $10 in free BTC if you sign up using this referral link. (Let me know when you get it!) Follow the steps below to purchase one bitcoin: Click on the USD tab and Buy/Sell. Enter the amount of USD you want to spend. You can specify a portion of your bank account/credit card or even a credit/debit card. Coinbase will automatically convert from USD to your local currency if needed. Then once you have verified your account, go to the Buy/Sell page on Coinbase. Input the amount of BTC you want to sell and the USD value you want to get. If it doesn’t accurately reflect the current market rate, click “convert” and update it manually. You’ll see your bitcoin balance change immediately in real-time and be able to see your transaction confirmations by clicking on your BTC wallet address under Accounts/Receive tab or down arrow button in the top right corner.
2. Buy Bitcoin or Ethereum with Coinbase
It is the easiest way to buy cryptocurrencies on Coinbase. Go to the Buy/Sell tab, click the “Buy” button next to your choice of the coin, or click here. Choose how many you want and follow payment instructions. The charge could take up to 4 days to hit your account, depending on your chosen network fee and currency.
How do I use my purchased coins?
It’s easy! To send cryptocurrency from your USD wallet, go to the “Accounts” tab and click on “send.” Enter the amount you want to send (you can see your balance in the “USD” tab as well) and click “send” at the bottom of the page. The charge could take up to 4 days to hit your account, depending on your chosen network fee and currency. If you want to sell it, right-click on your coin wallet address under Accounts/Receive and select sell. It will generate a new transaction for you if necessary. If not, it will delete the previous one.
Do I need a bank account or credit card to buy Bitcoin or Ethereum?
You do not need a traditional bank account or credit card to purchase cryptocurrency through Coinbase. You can buy cryptocurrencies with a conventional bank account or a credit card, but not both. You must choose one or the other. Coinbase handles all the transaction processing internally, and you do not need to go through any third party. That’s right; Coinbase is now doing your bank reconciliation for you! Every time someone buys cryptocurrency through Coinbase, they get charged a network fee (0% for some coins, 4% for others). It is because their underlying transaction must be approved by another bank, paying them for their time and effort.
If you’re watching the market on Coinbase, you will see the transaction show up right away in your USD wallet address. Unfortunately, USD transactions are not instant. You can click on “Priority” if you want an instant transaction, but that will cost you 50% more than the default network fee. It is an excellent advantage for those who want to buy and sell frequently but could lead to discrepancies between what you see on coinbase and what happened with your balance. Suppose Coinbase needs to charge your credit card or bank account again for any reason (such as unexpected volume or other fees). In that case, they will do it automatically without contacting you first. You will receive a notification email when the transaction is completed.
Why does Coinbase charge a network fee?
Coinbase charges network fees (1% for Bitcoin, 0.25% for Ethereum, and 0.1% for Litecoin) to help pay the cost of mining transactions. They are added to or subtracted from your cryptocurrency balance if you buy or sell cryptocurrency. Network fees differ based on the coin you purchased and where you bought it: Bitcoin: 1%, Ethereum: 0.25%, Litecoin: 0.1%.
What is a Coinbase vault?
Coinbase has a feature called a vault. Vault is Coinbase’s “freeze” tool. If you don’t want to buy or sell cryptocurrency right now, you can enter your USD wallet address under the Accounts tab and click “send.” It will temporarily freeze your USD and hide it from your Overview page so you can’t accidentally spend it. The only way to unfreeze your account is by entering 2FA and clicking on “Unfreeze.” It can only be done with a one-time SMS that Coinbase sends. So if you lose that SMS or need to change carriers (or get a new phone), there’s no way to gain access again. It can be very inconvenient, and you should keep that in mind before deciding to freeze your account.
How long do cryptocurrency transactions take?
Suppose you want to buy or sell cryptocurrency through Coinbase. In that case, they will handle the processing internally and charge a network fee. Coinbase processes all the transaction requests internally, and you do not need to go through a third party. If you buy or sell using other means (such as using USD directly from your bank account or buying now with your credit card on GDAX), transactions may take 3-5 days to process due to the ACH transfer process.
How long do cryptocurrency deposits take to show up on my Coinbase account?
You will see them immediately if you’re not using Coinbase to buy or sell your cryptocurrency. Otherwise, it takes 1-5 business days for any USD balance changes to show up. The USD wallet is an actual bank account connected to Coinbase (through ACH transfers), so it’s not instantaneous.
Are my cryptocurrencies safe from hackers
Coinbase is the most secure exchange around. When you send cryptocurrency to Coinbase, it’s broadcasted to the bitcoin miners in real time, who verify your transaction. It makes it almost impossible for anyone to steal cryptocurrencies through hacking. If a hacker were able to hack coins out of Coinbase, they would have to hack you before they could transfer the cash from your wallet.
What are the best ways to store my investment?
Coinbase is designed for quickly trading cryptocurrencies. It means you don’t need special software or hardware to store them. You can use any software or hardware (such as a desktop, laptop, or smartphone) with an internet browser and access the internet.
Is Coinbase safe for small investments?
If you are considering making a small investment, it is still best to begin with, Coinbase. You can create an account and link your bank account (or credit card) to your Coinbase account. From there, you can buy and sell cryptocurrency using the coinbase interface. The same security practices apply regardless of the amount you invest in cryptocurrency.
- What are Digital Currency (Crypto) Exchanges?
- Cryptocurrency for Beginners
- Is Investing in Crypto Right for You?
- Understanding Bitcoin Transactions
- 5 Things You Need To Know Before Buying Your First Bitcoin