Coinbase is a US-based cryptocurrency exchange platform that was founded in 2012. It comes with one of a kind features which rank it atop among other Bitcoin brokers. Coinbase enjoys wide recognition in the crypto trading world and operates in over 50 countries across different nations worldwide. You may be pleased to know that several millions of transactions take place on the platform every day.
How do Coinbase works?
Coinbase is one of the best trading platforms for beginners and experienced traders alike. This is because it allows a seamless buying and selling of Bitcoin and other cryptocurrencies at unmatchable speeds. However, you need to create a verified account before you start trading on this exchange.
How to Create an account on Coinbase
Opening an account on Coinbase is quite easy; all you have to do is follow the steps highlighted below:
- Open your web browser or the Coinbase app, and find your way to their homepage.
- On the homepage, click on the signup button. This is located at the top right corner of the website.
- Fill in information such as your full name, email address, location, and password.
- After filling this, you will be told to complete a captcha to confirm that you are human and meet their age requirement. You should be 18 years and above, as at the time of account setup.
- Once this is done, read the privacy policy page and click to accept their terms and condition.
Verifications
The verification process begins once you have completed the first set of information and clicked on the submit button. A message will be sent to the email provided with an attached link, asking you to verify the ownership of the email.
The next step after this will be to verify your phone number. To do this, you will first select your country, after which you will be asked to input your phone number. A 7-digit code will be sent to the phone number you just provided. Copy this code and paste it in the appropriate place. After that, you should go on to click the verification button.
Once this has been completed, either of two things can happen. The first is that you can be told to do an ID verification, or this process might be skipped, most times depending on your location. ID verification is essential to enjoy unlimited access to your account.
Because the KYC/AML laws guide this US-based company, you will be asked to provide your ID details and upload a photo of either your Driver’s license or any other certified ID.
When you navigate your way to the ID verification page, which is under the Buying/selling section, you will be asked to input the last four digits of your SSN. Once this is done, you will also be asked to upload a picture of any other recognized ID. This is achievable by the use of a webcam, phone camera, or you may upload a photo already saved in your gallery. Once this verification has been completed, it means you can now have full access to your account.
You can include the 2-Factor Authentication setting to make your account more secure. You will find this under the security tab on the settings page. Once you select the “Enable Authentication” Button, a 7-digit code will be sent to your phone.
Once you input the code on the platform, Coinbase, with the help of Google Authenticator, will generate a 2FA code for you, which usually changes every few seconds. This makes your account more secure because not just anyone will be able to access your account unless they have your phone, and they can generate your code.
Adding a payment method
After a successful verification, you can then go ahead to make your first purchase on the platform. Three methods are presently available for making deposits on the platform, which are:
- Debit Card: The debit card payment allows you to make an instant deposit into your account. Payment by debit card only permits a small amount of money at once, starting with as low as $300 per week. However, it guarantees swift payment and is a good option for an instant deposit of funds. Another downside to using the debit card for making a payment is that users are usually charged a fee as high as 4%
- Direct Bank Transfer: This mode of payment is preferable for those making a large deposit at once. It allows users to deposit as high as $7,500 weekly. The fees attached to this are quite lower, approximately 2%. The downside is that you will have to wait for 4-5 days before your money will reflect in your account. Hence, the market fluctuation of Bitcoin price might affect you positively or negatively during this period.
To add a payment method to your account, click on the setting button. This takes to a page that displays the “Link Account” option. This allows you to link your account to your preferred method of payment.
Apart from the VISA or Master Debit Card options as well as the Direct Bank Transfer option, you can also do a wire transfer directly into your Coinbase account. This will also take a few days before it becomes credited into your account.
Making a purchase
Investing on the Coinbase platform is dependent on the level of verification that you have been able to complete on your account. If you have only your phone number verification, you are limited to invest as much as $7500 in your account.
If you have been able to do a personal ID verification, you can invest an unlimited amount into your account. However, you still will not be able to send and receive digital currencies. The option to send and receive digital currencies is exclusive to users who have completed their ID verification process.
With this in mind, making a deposit is quite easy on the Coinbase platform. Use the buy/sell option to select the amount and type of currency you want to buy. Deposit of funds may occur instantly or otherwise, depending on the payment option used.
Cryptocurrencies supported
Coinbase supports the exchange of several currencies from the most popular to the less popular ones. The platform supports currencies such as Bitcoin, Ethereum, Litecoin, and XRP. It also supports other currencies such as BAT, BCH, BSV, DAI, DASH, EOS, ETC, KNC, LINK, OXT, REP, USDC, XLM, XTZ, ZEC, and ZRX.
Requesting Deposit and Sending Cryptocurrency
Coinbase allows users to transfer currencies from one account to another, making it possible to move directly to your wallet or someone else.
To make a deposit, navigate to the ‘Account” tab and click on the Receive button. Coinbase will automatically generate an address for the sender. Click on the attached link and make a deposit appropriately. This address is specific to the type of currency you want to receive, and this means that you cannot receive a Litecoin, using a Bitcoin address.
The same principle applies when you are sending cryptocurrency on the platform. Click the send button and enter the wallet address of the recipient. After this, file for the coin you wish to transfer and click the “send” button.
Unique features of Coinbase
Coinbase Bitcoin Wallet: Apart from buying and selling of cryptocurrency, Coinbase comes with a wallet where you can store your crypto for later use. The wallets are of two types, namely, Coinbase wallet and Coinbase Vault. The wallet is available on google play store for Android users and Apple stores for iPhone users.
- Wallet: You can save you money and earnings using the Coinbase wallet, however, the platform controls your crypto wallet, and you do not have complete ownership of it. Hence, it is advisable to have an offline wallet that you can transfer your funds to if you wish to have better control over it.
- Vault: Coinbase vault allows users to store more money than the wallet. Withdrawals from the crypto vault are quite different from the wallet option. The exchange’s vault will enable users to add multiple approvers, who will have to approve whatever transaction you want to complete while using your wallet. Also, it takes a longer time for transactions to be approved while using the Coinbase Vault.
Coinbase Exchange App: The Coinbase exchange app is accessible to users on both the desktop and mobile versions. This means that users can make use of Coinbase at their own convenience.
Regulation
Coinbase is a US-based exchange platform that follows the KYC/AML regulations while registering its users. The same principle applies to the setup of accounts on other exchange platforms.
All the currencies present on the platform are FDIC-insured, which means that Coinbase can keep track of its user’s accounts and how they spend their cryptocurrency. This places no doubts on the topnotch security and authenticity of the platform, ranking it as a top bitcoin exchange platform for years.
Payment methods
We have done due diligence to the methods of payment supported on the platform. For emphasis, you can use the debit card, direct bank transfer, and wire transfer for making deposits. The withdrawal option is also similar. In late 2019, Coinbase expanded its withdrawal by adding PayPal to the numerous option available on the platform.
Coinbase Profit
Coinbase makes its profits mainly from the fees charged from deposits and withdrawals on the platform.
Coinbase Vs. Coinbase Pro
Coinbase Pro is another platform created by Coinbase with similar features and a few differences, which are highlighted below:
| COINBASE | COINBASE PRO |
| It is friendlier to use and easy to navigate, making it a good option for beginners. | The site’s design is more difficult because of the inclusion of trading sections, charts, limits, and order boxes. |
| A debit card fee of approximately 4% is charged per transaction. | No fee is charged using the debit card method of deposit on this platform. |
| It also charges a fee of 1.99% on a direct bank transfer. | A fee of 0.00-0.25% is charged per transaction, depending on the amount involved. |
| The platform puts limits on the amount that can be withdrawn and deposited. | There is no limit to the amount that is deposited or withdrawn on this platform. |
Advantages/disadvantages
Pros
- Effortless exchange of cryptocurrencies and seamless methods of payments
- Coinbase supports more countries than most of the other exchange platforms. It has broader coverage, with Europe being the continent with the highest number of countries.
- Coinbase has a higher buying limit and liquidity than most of the other exchange platforms.
Cons
- Higher charges on transactions completed on this platform.
- Some users do not like that Coinbase can track their accounts, including how they spend their cryptocurrencies.
FAQs
How much profit can I make on the platform?
Coinbase is designed to help you with the exchange of your currencies. There is no limit to the amount you can gain. Well, except those due to market fluctuations.
How much does Coinbase charge on deposits?
This is dependent on your location. However, it is around 4% for debit cards and 1.99% for direct bank transfer option.
Do I need to verify my account?
Yes, you need to do a complete verification to enjoy all the features the platform offers.
In conclusion, Coinbase is a leading crypto exchange industry that offers top-level security of your cryptocurrency. Its rigorous verification processes and end-to-end encryption makes it a scam-free zone guaranteeing maximum protection of the user’s fund, information, and interest.
They have a user-friendly platform and a large customer base. It is easy for beginners and experts to navigate their way on the platform.
You can get started immediately by visiting their site and creating an account.
