Coinbase is one of the simplest cryptocurrency trading platforms to get started on. You can buy Bitcoin, Litecoin, Ethereum and many other cryptocurrencies with this platform. Once you understand Coinbase, more advanced trading platforms such as Binance won’t seem as intimidating. Lets get started!

What is Coinbase?


Coinbase is a cryptocurrency trading platform which allows you to buy and sell four different cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Note that there are over thousands of different cryptocurrencies but these four are what Coinbase specializes in. Of course, more cryptocurrencies may be added in the future and much speculation goes on about which cryptocurrencies will be added next; but that’s not very important into what we’ll be discussing.

Making a Coinbase Account


Use this link to get a $10 free of bitcoin (after spending $100)

Creating a Coinbase account is very simple but there’s much more to it compared to something like creating a Reddit account. Be sure to have either your driver’s license, passport, or identification card at hand as you’ll be asked to provide this information via upload.

Why does Coinbase need to see my ID?

Coinbase needs to be able to verify your identify because they are a regulated financial service company operating in the US. As they state on their website:

As a regulated financial service company operating in the US we are periodically required to identify users on our platform. This ensures we remain in compliance with KYC/AML laws in the jurisdictions in which we operate, something that is necessary for us to be able to continue to offer digital currency exchange services to our customers.

Once you’ve created your account, you’ll have to wait until you get approved before you’re allowed to start buying and trading on the platform. This can take upwards of 7 days till approval. Coinbase will also make two distinct small charges towards your bank account. You will need to find these charges and register them into Coinbase as a part of the approval process.

The time in which it’ll take to get approved will vary person to person, just be patient and you eventually will get approved. In the mean-time I highly recommend taking some extra steps done to ensure the security, and longevity of your account.

Funding Your Coinbase Account


Congratulations, your Coinbase account got approved! You can now start funding your account… or so you thought.

Upon your first cryptocurrency purchase with Coinbase, it is very likely your bank will automatically flag the purchase as fraudulent. If this happens to you (which it most likely will), you will need to call up your bank and let them know to let the purchase go through.

Once you’ve taken care of that, buying and selling cryptocurrency is relatively self-explanatory. Just go to Buy/Sellin the menu and choose which currency you’d like to buy/sell as shown below.

Coinbase cryptocurrencies

Funding Limits

Coinbase has weekly limits as to how much cryptocurrency you may purchase. Your limits will not start out this high but increase with proper verification and the longer you have an account.

Weekly Buy Limits

  • Cash: $100,000
  • Bank Account: $25,000
  • Credit/Debit Card: $7,500

Weekly Sell Limits

  • $100,000

Credit/Debit Card and bank account purchases are both instantaneous, however, for bank account purchases, it’ll take 5-7 business days for you to see the charge in your account.

For information see:

Fees


There’s three distinct fee’s you will encounter with Coinbase.

  • Conversion & Exchange Fees: These are fees you’ll encounter through the buying, selling or exchanging of crypto. A fee is charged when you convert fiat to crypto.
  • Transfer Fees: A fee is charged if you’re transferring crypto to a different wallet (IE: Crypto –> Binance). Note that if this wallet happens to be another Coinbase wallet, there is no fee.
  • Mining Fees: These’s are inherent fee’s you’ll encounter with any sort of crypto transaction. Mining fee’s will also change depending on which cryptocurrency you are purchasing. I don’t want to delve to much into the technical aspects as to why this is (as it can get very technical). I’ll have to save this for a later post.

Note that the Bitcoin network is notorious for insanely high fee’s. Purchase and transaction fee’s upwards of $50+ are not uncommon during periods of high network congestion. Using Bitcoin to purchase something like a cup of coffee is completely trivial, and as we advance forward into the space, it’s becoming more apparent that Bitcoin’s main use case will be that of a digital gold rather than a global payment network.

Lowest Possible Fee With Coinbase

If you’re going to be making large crypto purchases through Coinbase, ideally you’d want to get the lowest fee possible. I have found that the best way to do this is by your linking a bank account rather then by purchasing through debit/credit card.

  • Funding via bank account: 1.46% fee
  • Funding via debit/credit card: 3.83% fee

 

linking bank account

fees comparison

As you can see, both allow instantaneous availability of funds. However, it’ll take 5-7 business days for the bank account transfer charge to appear in your account.

Note: The fee you receive will also depend on how large of an amount you are purchasing. Expect fees to be a bit higher for smaller purchasing amounts and lower for larger amounts.

Fees Continued

It’s important to know that fees will change depending on what country you’re from and what cryptocurrency you happen to be purchasing. For more information on Coinbase fees I highly recommend visiting their fee disclosure page.

Avoiding Coinbase Transfer Fees Using Coinbase Pro

There is a bit of loophole to avoid Coinbase transfer fees. This is done through Coinbase’s advanced trading platform known as Coinbase Pro. It looks intimidating, but it’s a lot easier to use than they make it seem. Luckily, as Coinbase user, you technically already have a Pro account. Simply follow the sign-up steps for Coinbase Pro, and you’ll find your information pre-populated. No need for long wait-times for verification etc.

Sending & Receiving Cryptocurrency


Sending and receiving crypto with Coinbase is super easy…

Sending

Go to Accounts in the menu, look for the currency you’d like to send, then click Send. A prompt will come up instructing you to put in the recipients address and the amount you’d like to send. See the ethereum example below:

Sending Etherem pop-up

Receiving

Go to Accounts in the menu, look for the currency you’d like to receive, then click Receive. A QR code and random string of numbers will appear. That random string of letters & numbers is your wallet address. This string is what you’d give to someone if you were looking to receive crypto. Your wallet address is also crypto specific. This means that if you try to send Litecoin to your Bitcoin wallet address, the transaction will fail.

Random LPT: If you’re ever needing to transfer a large amount of crypto to another wallet, I recommend sending a test amount which is basically just a small amount of crypto. If said small amount appears in the wallet, you know you have the correct address. If not… you may need to just wait a bit longer and hopefully it will appear, or you’ve sent it to the wrong wallet address.

Securing Your Cryptocurrency


There are many ways you could go about securing your cryptocurrency. I’m going to discuss two.

The Vault

The Vault is a feature Coinbase offers free of charge to safeguard your funds by adding multiple layers of security. With the vault, there is a designated time frame for withdrawals. This helps to safeguard against hackers getting into and emptying your account. Additionally, you can have other people (or email addresses) needed to confirm these withdrawals for an added layer of security.

Warning: The vault is a feature you should use if you are planning on holding your cryptocurrency for a longer period of time. It is not recommended if you are looking to turn quick profits through buying and selling often due to the 3 day waiting period for withdrawals.

Ledger Nano S

ledger nano s pin number

Click here to read my Ledger Nano S Review.

The Ledger Nano S is a cryptocurrency hardware wallet. It allows you to store your cryptocurrency in physical device akin to that of a USB drive. You would then ideally keep this in a safe at home. This is my personal preferred method of storing cryptocurrency because I don’t have to worry about hackers potentially gaining access to my cryptocurrency online, rather, that security falls into my own hand. I just have to make sure I don’t lose or damage my Ledger, and even if I managed to do that, there is a 16 word recovery phrase provided by the Ledger in the event of a lost, damaged, or stolen Ledger. As long as you have the recovery phrase, you can recover all your cryptocurrency.

So after purchasing crypto through Coinbase, instead of leaving my digital goods on the exchange, I transfer it to cold storage (which is another word for hardware wallet IE: Ledger Nano S).

Securing Your Coinbase Account


Two-Factor Authentication

Upon signing into your Coinbase account, you’ll be sent a text message containing a code in which you will have to input allowing you to access your account. This is a security measure done to ensure it is specifically you trying to access your account, it’s important to note that a hacker could still compromise your account through a social engineering attack with what is known as a phone porting attack. This attack is done after obtaining your phone number and various other personal information, the hacker will then call up your phone carrier impersonating you, and then attempt to port your number over to a new device. Once a hacker has access to your text messages, they can then access your account with your SMS two-factor authentication code. If you’d like to see a real example of how this can play out, Cody Brown shares his example of how he lost $8k worth of bitcoin to this attack.

Anyways, the best way to prevent this is through the use of an authenticator. The most common being Google Authenticator. I don’t want to get into too much technical details as to how authenticators work. Think of it as a digital key, stored on a device that changes every 30 seconds.

In order to enable authenticator for Coinbase, go to Settings > Security and Enable Authenticator as shown below:

enable authenticator

After that a prompt will appear along with a QR code and a secret code (comprised of a random string of 16 letters & numbers). You will need to open up your Google Authenticator app and scan in your QR code. You will also need to write down your secret code and keep it in a safe place such as a safe and/or security deposit box.

Once enabled, any time you wish to access your Coinbase account or make trades/transfers, you will need access to the 6-digit code provided by your authenticator.

google authenticator code

IMPORTANT: If you lose access to the device you’ve enacted authenticator on, you ABSOLUTELY WILL NOT be able to recover your account UNLESS you have that 16 digit secret code. This is a serious matter that should be taken with serious caution. It is important you take preventative security measures to ensure the security of your cryptocurrency. I highly recommend calling your bank and opening a security deposit box. This will mostly likely cost a yearly fee but the peace of mind alone is worth it.

My Primary use of Coinbase


I primarily use Coinbase as an easy access point into the crypto world. Coinbase makes it very easy to purchase the largest of cryptocurrencys and once you have access to these, you can start purchasing more niche cryptocurrencies such as XRP, EOS, IOTA, NEO, etc… You would do this through the use of much larger exchange such as Binance.

You cannot directly convert fiat to crypto with Binance yet. So in order to fund a Binance account, you need to convert your fiat to crypto through an exchange that allows you to do so, (this is where Coinbase comes into play) send that crypto to your Binance account, then make a purchase.

The way I go about doing this is:

  • 1st I purchase Ethereum through Coinbase. I purchase Ethereum instead of Bitcoin, because as I mentioned before, Bitcoin is notorious for insanely mining and transaction fees. Ethereum has much lower fees.
  • 2nd I send said Ethereum to my Binance account
  • 3rd Once I receive that Ethereum on my Binance account, I make my niche cryptocurrency purchase through the Binance exchange.

To see a full tutorial on how to do this, be sure to check out my beginners guide to Binance.


PHEWWWW. That was a lot of words… Anyways, I hope this was beneficial to you crypto newbies out there. I plan on making more tutorials like this in the future 🙂 If you have any questions, just leave them in the comments sections down below. I’m sure either myself or the community would be able to respond.