There are many different crypto exchanges you can use, but only a handful of them are big enough to be listed on an exchange. One such exchange, Coinbase, is incredibly popular and is the largest in the United States by trading volume.
Founded in 2012, Coinbase has grown exponentially over the past decade and today offers products for retail and institutional investors who want to put their money into crypto. But, if you are new to crypto trading, it is essential to understand how to use Coinbase, its pros and cons, and other vital points.
How to open an account on Coinbase
If you want to get started with Coinbase, you must first create an account on the platform. Even though Coinbase is used to buy decentralized currencies, they still have strict KYC (Know Your Customer) requirements.
Coinbase is available in over 100 countries, including the United States, Canada, Mexico, Australia, United Kingdom, and many more. To create an account on Coinbase, you will need the following:
- Being older than 18
- Present a government-issued identification document, such as a passport, driver’s license, or national ID card
- 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 will also want to select a default payment method. Coinbase supports almost all common payment methods, including bank transfers, debit or credit cards, and PayPal.
You should choose a secure 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 over 100 cryptocurrency pairs. However, you will not find all the coins on the platform.
Over the past two years, the company has grown exponentially, reaching $7.4 billion in revenue. This is partly fueled by 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 cap, price charts, and price changes. You can also view all pairs or select those that are tradable on the platform.
Is Coinbase free to use?
Even though Coinbase is free to join and use, be aware that the company charges a small fee per transaction. This depends on several factors, including your preferred payment method, order size, and prevailing market conditions.
There is a price difference depending on whether you are using Coinbase or Coinbase Pro (which offers advanced trading features). Coinbase charges 0.5% per transaction and a flat fee for facilitation.
For example, if you pay via a digital wallet or via USDT, the fees will be lower. But if you pay by debit card, expect to pay a slightly higher amount. Coinbase also adds a spread for simple transactions, including when trading between different currency pairs.
When you register with Coinbase, you also have access to a digital wallet (hot wallet). It’s 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 wallet and a cold wallet before doing so.
How to Buy Cryptocurrency on Coinbase
Once you have created an account on Coinbase, you can now buy coins listed on the platform. To do this, simply click on Buy/Sell at the top right of your screen.
Then you can simply select the part you want to buy and choose the quantity. You can also buy directly from the coin pricing page if you are comparing different currencies.
You will need 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 (eg $2 or £2).
Is Coinbase safe?
If you are planning to invest a significant sum of money in cryptocurrencies, it is obvious that security will be one of your main concerns. However, Coinbase is generally a very secure platform.
However, hacks are not unheard of. There have been instances where people’s digital wallets have been depleted within hours. But this usually happens due to poor cyber hygiene.
Ideally, if you plan to use Coinbase to invest a large sum of money in cryptocurrency, it might be a good idea to transfer most of your crypto savings to a hardware wallet. There are several excellent hardware wallets you can buy today that are quite secure.
More importantly, to secure your account, you must also use multi-factor authentication. More importantly, Coinbase has also taken steps to tighten security on the platform to mitigate security issues.
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 states that approximately 98% of all balances are stored offline and that 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 to 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 want to choose an exchange with even lower fees, there are plenty of options available. As cryptocurrencies become more mainstream, many exchanges have popped up.
However, Coinbase is still very popular simply because it is over ten years old, and the company has taken several steps to reassure its users and provide a safe trading environment.
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