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How to Buy Cryptocurrency: Coinbase for Beginners

May 14, 2022 - 6 min read

Digital currency wallet and trading platform Coinbase was launched in June 2012 with the goal of making the digital currency more accessible and approachable for everyone, increasing global innovation, efficiency, and opportunity.

Coinbase is a cryptocurrency exchange that permits users to purchase popular cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. While not every coin is supported on Coinbase, the platform does help more than 90 distinct types of cryptocurrencies. The user can also use Coinbase to convert between cryptocurrencies and send and receive cryptocurrency to and from other users. As with other stock trading apps, Coinbase displays cryptocurrencies’ current price and trend, portfolio of holdings, and industry news. Meanwhile, thousands of distinct cryptocurrencies are available on a global scale. Coinbase allows the user to exchange the most popular types of cryptocurrencies, making it suitable for the majority of reasons. This all adds up to make Coinbase an excellent spot for new cryptocurrency investors to acquire and sell their preferred coins.

Traders can also see which cryptocurrencies are making the most significant moves. Coinbase is also releasing the Coinbase Card, a Visa debit card that users can use to earn rewards when they spend money on the assets in their portfolio. In addition, Coinbase also introduced a new direct deposit option in September 2021, which will allow users to have their salaries directly deposited into Coinbase and their money automatically paid as Bitcoin or another cryptocurrency.

Opening a Coinbase Account

Opening a Coinbase account is a simple process. The user should be at least 18 years old and a resident of the United States to use the Coinbase Services. The user agrees to provide them with the information they request during the registration process of the Coinbase Account. Coinbase can sometimes require a government-issued photo ID as well as information such as a phone number and the last four digits of a social security number to provide services, verify identity, and detect money laundering, terrorist financing, fraud, or other financial crimes, as well as keep a record of such information. Also, a user should be prepared to answer questions about the intent to use the platform. Finally, to prevent hackers from gaining access to the account, proper cyber hygiene should be used when selecting a password, such as a unique password that hasn’t been seen elsewhere and two-factor authentication.

How to Use Coinbase

Coinbase simplifies the process of purchasing and selling digital money. When someone uses Coinbase, the user can send and receive digital money between online wallets, friends, and businesses. It takes care of security and backups, so the user doesn’t have to. They are a ‘one-stop shop’ because they provide a wallet, an exchange, and merchant tools all through a single user interface. Bitcoin and other cryptocurrencies denominated in local currency can be purchased or sold for as little as $2.00.

Buy Different Crypto Coins: Guide to New User

Coinbase requires users to link a payment method before they can begin trading. For example, in the United States, a bank account, debit card, wire transfer, or PayPal account can be used. Once the digital wallet has been set up, the user can begin trading. Although Coinbase currently doesn’t support all cryptocurrencies, the exchange constantly adds new ones. 

But the user is solely responsible for any actions taken under their Coinbase account.

Orders for Bitcoin can be placed once a user links a payment method. Users should enter the number of dollars to exchange for Bitcoin, and Coinbase will buy it at the current exchange rate, considering any fees. To place markets and limit orders, users need to use Coinbase Pro. By default, the user agrees to buy the cryptocurrency at the current market price when placing a market order. Users also have options to set a limit order to buy the cryptocurrency at a specific price. The cryptocurrency will automatically be purchased once it reaches that level. 

To sum up the process of buying cryptocurrency:

  • Sign in to Coinbase.
  • Click on Buy/Sell.
  • Go to the Buy panel.
  • Users should enter the amount to buy in cryptocurrency or local currency.
  • Then, the user should choose a payment method.
  • To confirm the purchase, click ‘Preview Buy’ or click the back arrow to make changes
  • If all of the information is accurate, the user should click ‘Buy’ to finish the order.

To make this a recurring purchase, a user should choose ‘One-time purchase’ and have to decide how often they want to repeat it.

Coinbase charges fees ranging from 0% to 0.50 % for every trade, 2.49 percent for Coinbase card transactions, and banking prices vary, while Coinbase Pro charges fees ranging from 0% to 0.50 % per trade.

Security

When investing a significant amount of money, the user can be concerned about Coinbase’s security. Even though Coinbase has two-factor authentication and other security precautions, it is necessary to take further precautions to thwart hackers.

The first thing users can do is have a strong password that is not easily guessable and random. Time-based one-time password (OTP) is one reasonable precaution the user can take to have a secure login to their Coinbase account.

Coinbase employs the most advanced security measures in the industry to protect customers’ funds and assets. As a result, the user must adhere to online best practices to protect their account information. In addition, 98 percent of customer assets are stored offline in a network of safe deposit boxes worldwide, supported by digital and paper backups, which is a notable feature. Furthermore, its website is protected by industry-standard encryption and security measures. Moreover, all accounts must use two-factor authentication, which helps prevent others from logging into your account unless they have physical access to the phone.

In addition, the intelligence team of Coinbase looks into illegal activities such as money laundering and terrorist financing. To ensure regulatory compliance, risky cryptocurrency transactions are screened. As your company grows, keep an eye on transaction and user risk. Hackers and scams have been able to deplete the accounts of thousands of people, despite the employment of these high-tech measures. Coinbase and other financial websites require unique, random passwords to prevent this kind of theft. 

Final Remarks

Beginners in the cryptocurrency world will appreciate how simple it is to get an account with Coinbase. With simple clicks, anyone can buy and trade crypto on their platform. While not all cryptocurrencies are supported, several of the most popular ones are. 

Coinbase’s pricing structure and customer service are the two most significant drawbacks. But, overall, Coinbase is an excellent option for anyone interested in cryptocurrencies which can handle their own account and agree to the fees.

Cryptocurrencies can be volatile and risky, making them unsuitable for all investors. However, if someone is interested in cryptocurrency, Coinbase is a great place to start for both beginners and seasoned investors.

References

  1. Gilbert, B. (2021, 14 Apr.). Coinbase is about to go public, and it’s warning potential investors of its biggest risk factors — from the volatile nature of cryptocurrency to the potential for cyber attacks. Business Insider
  2. Haegele, B. (2021, 7 Sept.). What is Coinbase and how does it work? Bankrate
  3. Mitra, M. (2021, 10 Nov.). Coinbase for beginners: A complete guide to buying and selling cryptocurrency on a popular exchange. Money
  4. Rosenberg, E. (2017, 29 June). Coinbase review. Investopedia.

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