Coinbase has a reputation for one of the safest and most reliable method of buying Bitcoin, Ethereum or Litecoin. If you have decided to invest, trade, or just learn about cryptocurrencies, you will learn Coinbase offers one of the easiest platforms to purchase Bitcoin.
The San Fransisco based company was created in 2012 by Brian Armstrong and Fred Ehrsam. Currently Coinbase is available in 32 countries. Coinbase offers 2 products/platforms for their customers : Global Digital Asset Exchange (GDAX) which is a trading platform for more advanced traders which allows you to see the buy/sell orders and offers more trading tools; and Coinbase, which is marketed as a user-friendly retail exchange where you can buy/sell Bitcoin, Ethereum and Litecoin for fiat currency.
Signing up for Coinbase
- To sign up for Coinbase, simply go to Coinbase.com or use the Coinbase App on your iPhone or Android smartphone.
- You will provide your name, email address and password to set up your accounting.
- Verify the confirmation email by Coinbase to complete your Coinbase registration.
Getting verified on Coinbase
Coinbase requires identity verification for all users of their platform. Coinbase is based in the United States and aims comply with all regulations of digital currency exchanges.
Once you are register you will need to verify your identification and your bank account to beginning buying Bitcoin, Ethereum or Litecoin.
- Once your are logged into your account, click on "Add Payment Method"
- In order to use a bank account or credit card to purchase your bitcoins (or Ethereum or Litecoin) Coinbase will ask you to send a picture of your ID.
- Using your webcam, take a picture of your ID and ensure the ID is fully visible and in focus.
- Typically, Coinbase will verify your ID and account in 6-7 business days (however there are longer wait times with such a high increase in users in 2017.)
Once your are verified on Coinbase, you can start making purchases via bank account, credit card, or Paypal to for selling transactions. If you use your bank account for a purchase, remember that the coins will not clear your wallet for 5-7 days. This means, y
ou can move your bitcoin from your Coinbase wallet until your bank payment is complete which takes 5-7 days.
Coinbase payment methods:
When buying on Coinbase you have the option of using a bank account or credit/debit card. Bank account transfers have a 4-5 waiting period. This means, if you buy Bitcoin, you can make the purchase at the price you press "buy" but you will not receive your digital assets until your bank transfer clears.
Buying and selling limits.
The buy and sell limits can vary by location and the payment method. You can always view your limits in your account once your a logged into Coinbase. Typically, as a verified US customer, you will have weekly limits as follows:
Buying Bitcoin on Coinbase
Buying Bitcoin on Coinbase is really simple. Since Coinbase is mobile friendly with Apps available for Apple and Android, you can quickly make purchases on the spot.
To buy Bitcoin, Ethereum or Litecoin on Coinbase, simply:
- Open your Coinbase app or website and click on the cryptocurrency you want to purchase and click
- Type in the amount in USD you want to spend or the amount in the corresponding currency.
- Choose the payment method you would like to use: ACH Debit or Credit Card.
- Click Buy and confirm your purchase.
- If you used credit card as the payment option, you will pay higher fees but the digital coin will be available in your wallet immediately.
- If you used a bank transfer - it can take 7-9 days for your transfer to complete before you have access to your coins.
Is Coinbase safe to use?
As frequent users of Coinbase, it have proven to be reliable and safe. So YES, Coinbase is safe, and one of the most reliable exchanges available.
Coinbase complies with the following regulations:
Coinbase strives to be compliant with all regulations. This is why it only offers 3 different digital assets currently. Although Coinbase is not a Better Business Bureau (BBB) accreddited business, they rate Coinbase as A+. BBB assigns ratings from A+ (highest) to F (lowest).
`1Q`Coinbase strives to process all transactions in a timely manner. As a whole, the block chain industry is growing and more consumers are creating accounts. At Coinbase, the user base is growing very rapidly. However, as the industry has grown, the restrictions placed on companies like Coinbase by financial regulators has strengthened. - BBB.org
Coinbase does receive a lot of negative reviews related to customer service and the amount time it takes for bank transfers to clear and account verifications to be completed. This is due to the rapid growth of Coinbase users and we hope they take action to fix their customer service issues.
Advantages of Coinbase
Quick and easy to use:
Coinbase is a great service for beginners to start their investment in Bitcoin, Ethereum or Litecoin. The platform is geared towards beginners who do not want to bother with trading methods, buy limits, etc. Once your Coinbase account is set up and verified, it only takes a couple of clicks to buy your Bitcoin
Coinbase is also great for times when you are not near a computer and want to purchase Bitcoin quickly during a dip in the market. If you need to make a quick purchase, Coinbase has really done a great job on their smartphone apps.
Coinbase keeps all fiat currency in segregated custodial bank accounts, which are held in the customer's names - therefore if Coinbase were to become insolvent, credits could not claim the custodial bank accounts. This is important if you store fiat currency on the Coinbase wallet.
98% of cryptocurrency funds are stored in multiple secure offline cold storage wallets. This physical cold storage wallets are held in vaults all across the globe. The remaining 2% of the digital currency is held online.
United States residents' USD wallet are covered by FDIC insurance, up to a maximum of $250,000.
Coinbase offers a 2-factor authentication (2FA) to secure your account. 2FA requires an additional layer of security from an outside device, typically your smartphone. When 2FA is enabled, a security code via tax, Google Authenticator or Authy will be inputted for account access.
Multiple 2-factor authentication (2FA) methods are available to help secure your account. The most basic 2FA option is through SMS texts, but we recommend setting up a third party 2FA app. Options for this include Google Authenticator and Authy.
In addition to these, security feature, Coinbase will also send a confirmation email up login of a new device not recognized by Coinbase.
Coinbase has wallets for Bitcoin, Litecoin and Ethereum. We don't reccommend keeping your digital assets on an online exchange wallet, but keeping a small amount on the exchange can offer a quick way to change for fiat.
Unlike stock exchanges, Coinbase will not provide you with a Form 1099. Instead, Coinbase will provide a report with a capital gain calculation using the FIFO method. You can generate the report here, by clicking on "New Report" in the upper right hand corner.
Note, this report is only accurate if you made you buys and sells on Coinbase. If you moved to a different wallet or exchange to sell - the report will not capture the transaction.
Disadvantages of Coinbase
Digital currency valued higher than most other exchanges:
Since this exchange is so easy to use, it often sells Bitcoin, Ethereum, and Litecoin slightly higher than most other exchanges.
Bank transfers can take long:
As mentioned before, customers complain about the time it takes for bank transfers to complete. This causes you to be without your fiat and digital currency for a few days until the transfer is complete.
Whether you are a beginner just starting out in cryptocurrency or already have a wallet and own Bitcoin or other altcoins, Coinbase is a must have app on your smartphone.
For beginners, it very simple and easy to use. You can buy your first Bitcoin, Ethereum, and Litecoin with a few clicks. It has proven to be reliable and safe - the company strives to be transparent and compliant with all regulations which is important for those who are still cautious about investing in digital currency.
For regular users of cryptocurrency, Coinbase is an important app to have on your mobile device. When you are on-the-go and the cryptocurrency market dips, its can be difficult to open up a computer to buy Bitcoin on an exchange - the Coinbase app is so easy, you can set up an alert and quickly buy your Bitcoin with a few clicks on your smartphone.