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There are many different crypto exchanges that you can use, but only a few are big enough to be listed on a stock exchange. One such exchange, Coinbase, is incredibly popular and is the largest in the US by trading volume.
Coinbase, founded in 2012, has grown exponentially over the last decade and today offers products for both retail and institutional investors who want to invest their money in cryptocurrencies. But, if you are new to cryptocurrency trading, it is crucial to understand how to use Coinbase, its advantages and disadvantages, and other vital points.
How to open a Coinbase account
If you want to get started with Coinbase, you must first register an account on the platform. Although Coinbase is used to buy decentralized currencies, they still have strict KYC (Know Your Customer) requirements.
Coinbase is available at more than 100 countries, including the United States, Canada, Mexico, Australia, the United Kingdom, and many others. To register an account with Coinbase, you will need the following:
- Being over 18 years
- Present a government-issued identification document, such as a passport, driver’s license, or national ID
- A phone number from a supported country for authentication
- A connected smartphone or computer
- Supported Internet Browser
Once you have everything, you can click Get Started to create your account.
Before you start trading on Coinbase, you’ll also want to select a default payment method. Coinbase supports almost all popular payment methods, including bank transfers, debit or credit cards, and PayPal.
You must choose a strong password (absolutely avoid password recycling) and enable multi-factor authentication to secure your digital assets.
How to Use Coinbase: A Beginner’s Guide
The first thing you need to know is that Coinbase supports more than 100 cryptocurrency pairs. However, you will not find all coins on the platform.
In the last two years, the company has grown exponentially, reaching $7.4 billion in income. This is due in part to new customers, as Coinbase is a very safe place to buy and sell cryptocurrencies.
If you want to buy popular coins like Bitcoin, Ethereum, Litecoin, or even Dogecoin, you can buy them on Coinbase. At a glance, you can get a simple overview of the crypto market on Coinbase, including the best trading pairs.
Coinbase also lists its market capitalization, price charts, and price changes. You can also view all pairs or select from the tradable ones on the platform.
Is Coinbase free to use?
Although Coinbase is free to join and use, you should know that the company charges a small transaction fee. This depends on several factors, including your preferred payment method, order size, and prevailing market conditions.
There is a difference in price depending on whether you use Coinbase or Coinbase Pro (offering advanced trading features). Coinbase charges 0.5% per transaction and a flat fee for facilitation.
For example, if you pay through a digital wallet or through USDT, the fee will be lower. But if you pay by debit card, expect to pay a slightly higher amount. Coinbase also adds a spread for simple trades, even when trading between different currency pairs.
When you sign up for Coinbase, you also get access to a digital wallet (hot wallet). This is free to use; Coinbase does not charge anything if you want to store your coins on their platform. However, it is essential to know the differences between a hot and a cold wallet before you do
How to buy cryptocurrencies on Coinbase
Once you set up an account on Coinbase, you can now proceed to purchase coins listed on the platform. To do this, simply click Buy/Sell at the top right of your screen.
You can then simply select the coin you want to buy and choose the amount. You can also buy directly from the coin pricing page if you are comparing different coins.
You will have to choose a payment method, enter the amount and proceed with the purchase. If the details are correct, Coinbase will process the transaction and the new coin will be added to your spot wallet. The minimum purchase is 2.00 units denominated in your local currency ($2 or £2 for example).
Is Coinbase safe?
If you plan to invest a significant amount of money in cryptocurrencies, it is clear that security will be one of your main concerns. However, Coinbase is generally a very secure platform.
However, hacks are not unknown. There have been cases where people’s digital wallets have been depleted within a few hours. But that usually happens due to poor cyber hygiene.
Ideally, if you are going to use Coinbase to invest a large amount of money in cryptocurrencies, you might want to move most of your cryptocurrency savings into a hardware wallet. There are many excellent hardware wallets that you can buy today and that are quite safe.
More importantly, to protect your account, you should also use multi-factor authentication. More importantly, Coinbase has also taken steps to tighten security on the platform to ease security concerns.
For starters, Coinbase confirms that all digital balances stored on the platform are insured against digital theft. You should note that the policy does not cover theft due to unauthorized account access.
Coinbase also claims that around 98% of all balances are stored offline, and the Federal Deposit Insurance Corporation insures all dollar balances of $250,000 and above. This means that Coinbase is relatively safe, but it is still recommended that you use a non-custodial wallet to store your coins.
Coinbase is great, but it’s not the only option
If you live in a country where Coinbase is not available, or if you want to choose an exchange with even lower fees, there are quite a few options available. As cryptocurrencies become more and more common, many exchanges have appeared.
However, Coinbase is still very popular simply because it is over a decade old and the company has taken some steps to reassure its users and provide a safe trading environment.
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