Coinbase Bitcoin Investment: How To Get Started?

Coinbase is a cryptocurrency exchange that allows users to buy, sell, and store cryptocurrencies. It simplifies the process of trading and storing cryptocurrencies, making it ideal for beginners and advanced users. Bitcoin is a digital asset and a type of cryptocurrency that can be bought, sold, and traded on Coinbase. In this guide, we will take you through the step-by-step process of investing in Bitcoin using Coinbase, as well as discussing the key things you need to know before investing.

How to buy Bitcoin on Coinbase

Yes, you can invest in Bitcoin from Coinbase. Here is a step-by-step guide on how to buy Bitcoin on Coinbase:

Step 1: Create a Coinbase account

Download the Coinbase app and start the sign-up process. You will need a valid government-issued photo ID and may be asked for proof of address, so be sure to have those ready. Verifying your ID may take longer than a few minutes, depending on where you live.

Step 2: Add a payment method

Tap on the payment method box and connect a payment method. You can use a bank account, a debit card, a wire transfer, PayPal account, Apple Pay, or Google Pay.

Step 3: Navigate to the Buy page

On Coinbase.com, select Buy & Sell. On the Coinbase mobile app, tap the (+) Buy on the Home tab.

Step 4: Select Bitcoin from the list of assets

On Coinbase.com, click the Buy panel to search and select Bitcoin. On the Coinbase mobile app, search for Bitcoin by typing "Bitcoin" into the search bar.

Step 5: Enter the amount you want to buy

Use the number pad to input the amount you want to spend in your local currency. The app will automatically convert that into a Bitcoin amount. You can tap the arrow buttons to the right of the amount of money you want to spend to switch to the equivalent amount of Bitcoin.

Step 6: Finalize your purchase of Bitcoin

Tap "Preview buy" when ready. You'll be shown the details of your purchase. Make sure everything looks good and then confirm your purchase by clicking "Buy now".

Once the order processes, you'll be taken to the confirmation screen. That's it—you've bought Bitcoin!

Coinbase's fees

Coinbase offers a cash and Hosted Cryptocurrency balance service free of charge, allowing users to store their cash and supported cryptocurrency at no cost. Users can also transfer crypto from one Coinbase user's primary balance to another user's primary balance without any charges.

However, fees are incurred for transactions on cryptocurrency networks, such as transfers of cryptocurrency off the Coinbase platform. When sending crypto from a Coinbase wallet to another wallet, a fee is charged based on the prevailing network fees for a standalone wallet-to-wallet transfer. The final fee may differ from the estimated fee due to factors like batching transactions or changes in network congestion levels. All fees are disclosed at the time of the transaction.

Coinbase also charges fees for buying, selling, or converting cryptocurrencies on its platform. These fees are calculated when the order is placed and can be influenced by factors such as the chosen payment method, order size, market conditions, location, and other costs incurred by Coinbase to facilitate the transaction. The fees can be viewed in the trade preview screen before submitting the transaction.

Coinbase One is a subscription service that offers zero trading fees for buying and selling cryptocurrencies, with certain limitations. Members may still be subject to spread fees, which are included in the quoted price to temporarily lock in the trade execution price while processing the order.

For users who borrow USD from Coinbase or its affiliates and require the sale of their BTC collateral, a flat fee of 2% of the total transaction is charged.

Additionally, when sending Bitcoin through the Lightning Network, a processing fee of 0.1% of the transferred amount is charged.

It is important to note that all fees and charges are subject to change, and users should review the most up-to-date fee information on the Coinbase platform.

Coinbase's security measures

Coinbase is one of the largest cryptocurrency exchanges and has implemented robust security measures to protect its users' accounts and investments. Here are some of the security features and practices that Coinbase offers:

Two-Factor Authentication (2FA)

Coinbase prioritises the security of its users' accounts by mandating two-factor authentication (2FA). This adds an extra layer of protection, making it more challenging for unauthorised individuals to access accounts. Users can choose from various 2FA methods, including security keys, Time-based One-Time Passwords (TOTP) with mobile authenticator apps, and biometric authentication.

State-of-the-Art Encryption and Security

Coinbase employs industry-leading security measures and encryption protocols to safeguard user information and assets. Their security team actively monitors emerging threats to ensure that users and their investments are protected.

Secure Password Practices

Coinbase encourages users to use strong, unique passwords for their accounts. They recommend using long, random passwords or passphrases that are not used elsewhere. Additionally, Coinbase offers password management tools to help users securely store and manage their passwords.

Coinbase Vault

The Coinbase Vault feature is designed for users who plan to store their cryptocurrency investments for the long term. Withdrawals from the Vault require multi-email approval and have a 48-hour delay, providing users with ample time to cancel any unauthorised withdrawal attempts.

Address Whitelisting

Address Whitelisting allows users to create a predefined set of trusted cryptocurrency addresses. With this feature enabled, outbound transactions can only be sent to the whitelisted addresses, blocking any attempts by attackers to send funds to unauthorised wallets.

Cold Storage

Coinbase offers cold storage options, allowing users to store their cryptocurrency offline on hardware devices like USB drives. These cold wallets are not connected to the internet, providing immunity from online threats such as malware or spyware.

Bug Bounty Program

Coinbase understands the importance of security research and actively collaborates with the community to enhance its platform's security. They offer rewards through their Bug Bounty program for the responsible disclosure of any security vulnerabilities identified.

Compliance with Regulatory Standards

Coinbase complies with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations to maintain a secure crypto trading environment.

While Coinbase provides these robust security measures, it is essential to remember that security is a shared responsibility. Users should also practice safe internet habits, such as protecting their email accounts, avoiding phishing scams, and regularly reviewing their account activity.

Coinbase's customer service

Coinbase is a trusted platform for people and businesses to buy, sell, and manage Bitcoin and other cryptocurrencies. It offers a range of features to help users invest in digital assets, including powerful analytical tools, real-time order books, deep liquidity across hundreds of markets, and zero trading fees.

Coinbase provides 24/7 customer service through its live messaging feature, accessible via its website and mobile app. This feature initially connects users to a virtual assistant, but a live support agent can be reached if further assistance is required. To access live chat on the Coinbase mobile app, users can select the menu option, choose 'Get support', and then select 'Chat with Us'.

Coinbase also offers phone support, with the number 1-888-908-7930 providing direct access to Coinbase customer service representatives. This line can handle various inquiries and issues related to Coinbase accounts. When calling, users should have their account information ready for a smoother interaction. The average hold time is up to 3 minutes, with the longest wait times typically on Wednesdays and the shortest on Sundays. The average call time is 4 minutes.

Additionally, Coinbase can be contacted via email at [email protected] or [email protected]. Emails should include detailed information about the user's query, concern, or issue, along with relevant details to assist the support team in addressing the request effectively.

Coinbase vs. other exchanges

Coinbase is a trusted and beginner-friendly platform for buying, selling, and managing Bitcoin. It is a publicly traded cryptocurrency exchange available in 100+ countries. Coinbase offers a user-friendly trading experience, robust security, and a range of advanced features for experienced traders. It also has a large number of supported assets (5,500+) and an easy-to-use platform, making it the go-to exchange for many first-time crypto buyers.

However, Coinbase is not the only player in the market. Here is how it compares to other popular exchanges:

Coinbase vs Kraken

Kraken is one of the oldest and most reputable cryptocurrency exchanges in the world. It offers advanced order types and supports margin and futures trading. Kraken provides a professional-grade trading platform, Kraken Pro, which charges relatively low fees. Kraken is available in most U.S. states but not all.

Coinbase vs Crypto.com

Crypto.com is a leading global crypto exchange, available in 90 countries and supporting over 350 cryptocurrencies. It offers a vast ecosystem, including its own blockchain, a native token, a crypto visa card, and yield-generating crypto products. Crypto.com is particularly known for its strong mobile app, which provides a wide range of products and features on the go.

Coinbase vs Gemini

Gemini is a New York-based crypto exchange with a strong emphasis on security and compliance. It offers a professional-grade trading dashboard and supports over 70 digital currencies and tokens. Gemini also provides a cryptocurrency reward card and allows users to pay for goods and services with crypto. However, it has been noted for its high fees and limited customer support options.

Coinbase vs Bisq

Bisq is a decentralized, open-source cryptocurrency trading software. It allows users to trade a range of digital currencies and tokens in a peer-to-peer manner, without the need for Know Your Customer (KYC) identity verification. Bisq stays true to the decentralized ethos of Bitcoin and offers enhanced privacy. However, it is not very beginner-friendly and may have slower trade execution.

Coinbase vs Cash App

Cash App is a mobile banking app that also offers an investment component, including Bitcoin. It is available in the U.S. and the U.K. and allows users to seamlessly buy, sell, and store Bitcoin. Cash App also lets users withdraw their Bitcoin to third-party wallets, which is a unique feature. However, the in-app wallet is custodial, which is considered less secure than non-custodial wallets.

Coinbase vs KuCoin

KuCoin is a global crypto exchange headquartered in Seychelles, with a growing user base in Asia, Europe, the Middle East, and Africa. It provides access to a wide library of altcoins at low fees and offers advanced features like margin trading and futures trading. However, KuCoin is not licensed in the U.S., and funds kept on the platform are not insured.

Coinbase vs BYDFi

BYDFi (formerly BitYard) is a Singapore-based crypto exchange providing trading services in more than 150 countries. It is one of the few exchanges that comply with financial industry regulations and holds licenses in Australia, Singapore, and the U.S. BYDFi offers low trading fees and a decent selection of popular cryptocurrencies, but it lacks advanced trading features.

Coinbase stands out for its user-friendliness, strong security measures, and extensive educational resources. While other exchanges may offer lower fees or more advanced features, Coinbase is a well-rounded and trusted platform, especially suitable for beginners.

Frequently asked questions