In a short period of time, cryptocurrencies have grown from a small alternative investment to a total investment worth hundreds of billions of dollars. Whether you want to invest in cryptocurrency or use it as a means of payment, you’ve probably heard of Coinbase. After all, it is one of the most popular online cryptocurrency exchanges with tens of millions of users. It is also one of the easiest ways to buy cryptocurrencies, which has helped boost their popularity.
Simply put, Coinbase is a cryptocurrency exchange where you can buy popular coins like Bitcoin, Ethereum, and Solana. Coinbase does not support all coins, but there are over 120 different types of cryptocurrencies on the platform. There are now thousands of different cryptocurrencies available worldwide. Still, Coinbase lets you trade the most popular types of cryptocurrencies, so it’s suitable for most uses.
All of this makes Coinbase a great place for new crypto investors to buy and sell their favorite coins. But is Coinbase safe to use? What about costs? We’ll address these and other issues below.
How to Use Coinbase: A Beginner’s Guide
If you’re new to Coinbase, and maybe even cryptocurrency in general, it all seems overwhelming. Don’t worry, it’s actually pretty simple and we’ll show you how to get started.
How to open a Coinbase account
Opening a Coinbase account is easy. Here’s what Coinbase says is needed to create an account:
- A government-issued photo ID, such as a driver’s license or state ID
- Be at least 18 years old
- A computer or smartphone with internet access
- The latest version of your internet browser
- A phone number for SMS verification.
If none of this is a problem, you can create an account. To do this, enter your name, email, place of residence and create a password. You must also tick the box to prove that you are at least 18 years old. After that, you just need to set the password. Make sure to set a strong, unique password to protect your account.
You should also add a payment method to transfer funds to your Coinbase account. US customers can use a variety of methods including bank account, debit card, PayPal, Apple Pay or wire transfer. Note that PayPal is only available to US customers, and you can only use it to buy cryptocurrency or withdraw money.
After creating an account and adding a payment method, you can start trading cryptocurrencies.
What cryptocurrencies does Coinbase support?
While Coinbase doesn’t support all cryptocurrencies, it does support many of the most popular coins. So most people buying and selling on Coinbase will not have any problems. However, more advanced traders may need to open accounts elsewhere.
There are over 120 coins available on Coinbase. We won’t list every single one, but here are some of the most popular visits Coinbase offers:
- Bitcoin Cash
You can find a complete list on the Coinbase website.
What are the transaction costs?
Coinbase fees can be a bit complicated, but depend on your account type, transaction size, and funding source. Several factors affect the final fee you pay, including your country, payment method, and product.
For smaller trades, you pay a spread premium of 0.5% of the trade value, plus a flat fee based on trade size, as follows:
|$10 or less||$0.99|
|More than $10 and up to $25||$1.49|
|More than $25 and up to $50||$1.99|
|More than $50 and up to $200||$2.99|
Although Bitcoin costs much more than these dollar amounts, Coinbase allows you to buy fractional coins, so you can still buy small amounts. The cost of the spread premium is already included in your buy or sell price.
For amounts over $200, you pay a spread premium of 0.5% of the total transaction value, and Coinbase calculates variable fees for transactions over $200 as follows, depending on how you pay your cryptocurrency:
|U.S. bank account||1.49 percent|
|Coinbase USD wallet||1.49 percent|
|Debit card||3.99 percent|
|Instant card withdrawal||Up to 1.5 percent of any transaction; minimum fee of $0.55|
As you may have also noticed, these small fees can take up a significant portion of your purchase.
If you’re an advanced trader, Coinbase Pro might be worth considering. With Pro, you will find additional trading options and enhanced charting capabilities. Coinbase Pro also offers a simpler (and lower) fee structure.
The easiest way to get acquainted with Coinbase fees is to preview the order, which you can do by following the steps below.
How to buy and sell cryptocurrencies on Coinbase
If you already have a payment method linked to Coinbase, buying and selling couldn’t be easier. Once logged into your Coinbase account, follow these steps to buy cryptocurrency:
- Click the Buy/Sell button in the upper right-hand corner.
- Specify whether this is a one-time purchase or daily/weekly/monthly.
- Enter the amount of your purchase.
- Select the cryptocurrency to buy.
- Select your payment method.
Keep in mind that, according to Coinbase, when buying through a bank account, transactions typically take 3 to 5 business days.
Selling on Coinbase is easier. All you have to do is enter the quantity you want to sell (or select “Sell All”). Then specify the coins you want to sell and how you want to get paid. Note that buying and selling fees are the same.
Is Coinbase Safe?
It’s natural to wonder if Coinbase is safe, especially if you’re heavily invested. Also, it’s still a relatively new platform. While Coinbase is generally a secure platform and has security measures such as two-factor authentication, it is also not immune to attacks. A quick search online revealed reports of Coinbase users’ accounts being drained overnight. Experts point to SIM swapping as the cause of these incidents.
The idea behind these different types of wallets is that you don’t rely on Coinbase to store your funds. They allow you to store your own cryptocurrency using apps, software or hardware. So even if someone has access to your Coinbase account, it won’t give them access to the wallet that actually stores your cryptocurrency.
The downside of this method is that you have to remember your own password, also known as the private key. If you’ve heard of someone losing millions of dollars by being locked out of their cryptocurrency wallet, chances are they have a wallet that isn’t escrow. Although this method is more secure, you need to make sure you can access your wallet.
Coinbase is an easy way to get started with cryptocurrency. The user-friendly interface enables people to buy and sell cryptocurrencies with just a few clicks. While not every type of cryptocurrency is supported, you’ll find many of the most popular coins out there.
One thing to note about Coinbase is that fees can increase, especially when buying small amounts of cryptocurrency. For example, if you buy up to $10 worth of cryptocurrency, you pay a variable fee of $0.99, which means your fee could be closer to 10% (which is on top of the spread premium already included in the price).
This is one of the main reasons why Coinbase, while useful for beginners, is not for everyone. If you want to avoid Coinbase’s high fees and long processing times, there are many other ways to buy cryptocurrencies like Bitcoin.
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