Coinbase Cryptocurrency Investing: A Beginner's Guide

Coinbase is a popular cryptocurrency exchange that allows users to buy, sell, and store cryptocurrencies. It offers an intuitive and user-friendly platform, making it a good choice for beginners interested in investing in cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. With over 10,000 assets, Coinbase provides a wide range of options for traders to choose from. The platform also offers passive earning opportunities and an in-exchange marketplace for digital collectibles. However, it is known for high transaction fees and has received criticism for its poor customer service.

How to set up a Coinbase account

Coinbase is an online exchange where you can buy and sell cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, Litecoin, and Bitcoin Cash. It also supports emerging coins like Stellar Lumens and EOS. You can also use Coinbase to store your crypto safely.

To set up a Coinbase account, follow these steps:

• Go to the Coinbase website (https://www.coinbase.com) using a browser on your computer. Coinbase does not recommend accessing the site through a mobile browser. Alternatively, you can download and open the Coinbase app on your smartphone (Android or iOS).
• If you are using the Coinbase app, select "Create a free account". Enter your first and last name, email address, and continue. Create a password and select "Create Account". If you are using a desktop browser, follow the prompts and select "Get started". Provide your legal name, the email address you want to use, and create a password.
• Read the User Agreement and Privacy Policy.
• Verify your email address by checking your inbox for an email from [email protected]. Select "Verify Email Address" and enter the code on the email verification screen.
• Verify your phone number. Sign in to Coinbase and you will be prompted to add a phone number. Select your country, enter your mobile number, and click "Send Code" or "Continue". Enter the seven-digit code sent to your phone and click "Submit" or "Continue". If you did not receive the code, select "Resend SMS".
• Add your personal information. This includes the information shown on your valid government-issued photo ID, such as your legal name, date of birth, and address. You will also need to answer some questions, such as what you will use Coinbase for and what your source of funds is.
• Verify your identity. This step is required if you want to buy, sell, or send and receive crypto through Coinbase. The specific steps for identity verification may vary depending on your country.
• Link a payment method. Choose your country to see which payment methods are available in your region.

Coinbase does not charge a fee to create or maintain your account. The platform offers a simple and secure way to invest in cryptocurrencies, providing powerful analytical tools and safety measures to protect your transactions and personal information.

How to buy and sell cryptocurrency on Coinbase

Coinbase is a cryptocurrency exchange platform that allows users to buy, sell, transfer, and store digital assets like Bitcoin and Ethereum. The platform supports fiat currencies, allowing users to deposit funds in their local currency and exchange them for cryptocurrency.

Setting up your Coinbase account

To start buying and selling on Coinbase, you must set up an account first. Here are the steps to follow:

• Sign up for Coinbase by providing your name, email address, and creating a password.
• Verify your email address by clicking the link sent to your inbox.
• Complete identity verification by providing personal details such as your date of birth, address, and phone number. You may also need to upload a photo ID.
• Link your bank account by selecting your bank and inputting your bank login credentials.
• Add a payment method such as a debit card, credit card, or PayPal account.

Buying cryptocurrency on Coinbase

Once your account is set up, you can buy cryptocurrency on Coinbase by following these steps:

• Log in to your Coinbase account.
• Navigate to the "Buy/Sell" or "Trade" tab.
• Choose the cryptocurrency you want to buy and enter the amount.
• Select the fiat currency you want to convert to (e.g. USD).
• Review and confirm the transaction details.
• Finalize your purchase by following the on-screen instructions.

Selling cryptocurrency on Coinbase

To sell your cryptocurrency on Coinbase, follow these steps:

• Log in to your Coinbase account.
• Select the crypto you want to sell and the amount.
• Change the "To" destination if applicable. By default, this will be your local currency balance, but you may have the option to add to another balance.
• Review your order and select "Sell now" to complete the sale.
• Cash out your funds by signing in to your Coinbase account, selecting your local currency balance, and choosing the "Cash out" tab.
• Enter the amount you want to cash out, select your cash-out destination, and confirm the transfer.

Tips for using Coinbase

• Enable two-factor authentication to add an extra layer of security to your account.
• Avoid buying, selling, or withdrawing funds during periods of peak traffic, such as weekends or when major crypto price swings occur, as this can slow transactions and increase fees.
• Double-check recipient addresses when sending crypto from your Coinbase wallet, as transfers on the blockchain are irreversible.
• Link your bank account to take advantage of higher purchase limits during volatile markets.
• Use Coinbase Pro for lower trading fees if you are a frequent trader.

Coinbase's fee structure

Coinbase offers a free cash and Hosted Cryptocurrency balance service, allowing users to store their cash and supported cryptocurrency at no cost. However, the platform does have a complicated fee structure for various other services.

Firstly, Coinbase does not publish its transaction fees, but they are usually 1% or higher. These fees are calculated at the time of placing the order and are influenced by factors such as the chosen payment method, order size, market conditions, location, and other costs incurred by Coinbase to facilitate the transaction.

Secondly, there is a network fee for transferring cryptocurrencies off the Coinbase platform, which includes a miner's fee. These fees vary based on the type of cryptocurrency and the prevailing network fees for standalone wallet-to-wallet transfers.

Thirdly, when staking crypto on Coinbase, the platform charges a commission on the rewards earned. This commission varies depending on the cryptocurrency, with rates of 35% for ADA, ATOM, DOT, MATIC, SOL, and XTZ, and 26.3% for eligible Coinbase One members for the same currencies.

Fourthly, when adding or withdrawing cash from a Coinbase account, there may be fees depending on the payment method. For instance, borrowing USD from Coinbase or an affiliate and selling BTC collateral incurs a flat fee of 2%.

Additionally, while the Coinbase Card does not have transaction fees, there is a spread fee when spending your crypto balance using the card. ATM withdrawals may also incur operational fees.

Lastly, Coinbase Advanced, the platform's advanced trading feature, has a maker/taker fee model with a maximum of 0.40% for makers and 0.60% for takers, based on the 30-day trailing volume.

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

Coinbase's security features

Coinbase is the largest publicly traded crypto company in the world and has been a leading platform in the crypto economy since 2012. The company prides itself on being the most trusted place for people and businesses to buy, sell, and manage crypto. Here are some of the security features that have helped Coinbase earn this trust:

• Financial transparency: As a public company, Coinbase publishes financial statements quarterly and is audited annually by an independent third-party as required by law.
• Protection of customer assets: Coinbase does not lend or take any action with your assets without your permission. The company also offers secure and multifaceted risk management programs to protect its customers' assets.
• Respect for user privacy: Coinbase only collects the personal data necessary to provide users with the best protection and services. The company is transparent about how it uses and shares this data.
• State-of-the-art security: Coinbase's platform was developed with industry-leading security and encryption. The company's security team constantly works to protect users and their assets from emerging threats.
• Secure user accounts: Coinbase provides powerful security features to all its users, including auto-enrolled 2-factor authentication, password protection, and multi-approval withdrawals in Coinbase Vault.
• Customer support: Coinbase offers a variety of support options, including a virtual assistant, a live support agent (during certain hours), and a Help Center with quick solutions to common problems.
• Security research: Coinbase understands the importance of security research in keeping its community secure. The company pays rewards for the responsible disclosure of security vulnerabilities through its Bug Bounty program.
• Security keys: Coinbase recommends using security keys to protect your online accounts, including Coinbase, Gmail, Facebook, Dropbox, Instagram, Twitter, and YouTube.
• 2-step verification: Coinbase offers 2-step verification for all sends of cryptocurrency, adding an extra layer of security to your account.
• Security passcode: If you are using the Coinbase mobile app, you can enable a security passcode in the app’s security settings for accessing the app and sending funds.
• Address Book Allowlisting: This feature allows users to add and store any number of crypto addresses, making it easier and safer to send crypto to trusted addresses.
• Coinbase Vault: For those who plan to store their investment in their Coinbase account long-term, Coinbase encourages the use of a Vault. Vaults require multi-email approval to start a withdrawal, and the withdrawal has a 48-hour time delay, during which it can be canceled at any time.

Coinbase's customer service

Coinbase is a popular cryptocurrency exchange that allows anyone with an account to buy, sell, and exchange cryptocurrency. It has a user-friendly interface, making it a good choice for beginners. However, it is known for high fees and poor customer service.

Coinbase's high transaction fees and poor customer service are particularly concerning given the risks associated with cryptocurrency investing. Investing in cryptocurrencies is highly speculative and volatile, and customers need responsive and effective support when issues arise.

Despite its popularity, Coinbase's customer service falls short of expectations, and potential users should be aware of this limitation before choosing the platform.

Frequently asked questions