Founded in 2012 by Brian Armstrong, Coinbase started as a Bitcoin exchange. Now, it has over 30 million customers and handled more than $150 billion in cryptocurrency trades, making it one of the most used cryptocurrency exchanges. With a valuation of $8 billion, the exchange has grown to be among the unicorns in the United States. Well, how does Coinbase work?
Despite its unicorn status, how does Coinbase work? Right from signing up to depositing and a brief description of Coinbase Wallet.
Creating a Coinbase account
First, being a regulated cryptocurrency exchange, Coinbase does not supports transactions in all countries. To get to use the site, a user needs to be on the list of over 100 supported countries spread across North America, Africa, South America, Europe, Asia, and Australia.
The process to get onto the platform starts by visiting Coinbase.com and providing a valid email address. Clicking on “Get started” generates a new window requesting for personal information such as first and last names followed by a strong password. Note that Coinbase is not open for use to persons under the age of 18.
On clicking “Create account” Coinbase will send a link to the email provided for verification. The first step in verifying your account is by providing a mobile phone number to activate two-step verification. Being a first-timer, Coinbase prompts for the method the user will be using to buy cryptocurrency from the exchange. Here, it requires a user to enter debit or credit card details. However, you don’t need to start to buy or sell crypto the first time you land onto the platform. Upon phone number verification, Coinbase provides a window to access trade, receive, or send options.
To buy Bitcoin from a bank account, trade, or send crypto assets from the platform, fiat and or crypto wallets need to be funded. There are two ways to do this.
To work on the fiat wallet , click on your profile picture, select “Settings” and go to the “Payment methods” tab. Click “Add payment method” and provide viable credit/debit card details. Cryptocurrencies that can be bought using fiat on Coinbase are Litecoin (LTC), Bitcoin (BTC), Ether Classic (ETC), Bitcoin Cash (BCH), USDC, Zcash, 0x, and Basic Attention Token (BAT).
To use the buy and sell section on the platform, a new user must complete the identity verification process. On the buy and sell section, specify the fiat amount and the crypto to buy or sell. Cryptocurrencies bought with fiat can be used to trade on Coinbase or sent to another exchange or wallet.
Apart from buying cryptocurrencies with fiat, Coinbase also provides an option to deposit cryptocurrencies from other exchanges or wallets. To fund a Coinbase crypto wallet from an external wallet, choose the “Receive” option on the home page, and select the cryptocurrency to be deposited. A deposit address will be generated. On the external wallet, choose send, select the cryptocurrency, and enter the deposit address.
Being a first-timer, the dashboard won’t have much details. However, as the account buys and sells cryptocurrencies, the dashboard gets populated with, among other things, total balance and recent activity. On the “Tools” section, Coinbase stores and lists all previously used addresses as the exchange generates a new address each time payment is made. Unfortunately, the Coinbase dashboard lacks the information-dense charts like the one provided by Binance and other leading virtual currency exchanges.
Advantages and disadvantages of Coinbase
- The exchange has an easy to use design, making it ideal for new entrants in the digital currency world.
- Supports crypto buy sell options using fiat, making it a suitable on/off ramp exchange.
- Coinbase Wallet makes it easy for its customers to send cryptocurrencies using just a username.
- Has high liquidity for Bitcoin and other cryptos.
- There have been claims the exchange tracks user activities such as how they spend Bitcoin.
- High fees compared to Binance and other similar platforms.
Frequently asked Questions – Coinbase FAQs
How does Coinbase Wallet work?
Coinbase Wallet is a mobile crypto wallet that stores Bitcoin and a wide range of other cryptocurrencies. Also, it has support for digital collectibles. The wallet provides security using biometric and Secure Enclave technology. In addition, Coinbase Wallet allows trustless trading by connecting traders on decentralized exchanges. Another significant advantage of Coinbase Wallet is that it will enable customers to send cryptocurrencies by using a Coinbase Wallet username, thus eliminating the need to remember or copy long crypto addresses.
Can Coinbase be trusted?
Yes. By being regulated in the United States and attracting investments from leading investors, Coinbase can be trusted to buy and sell cryptocurrencies. Also, funds deposited on the exchange are insured by FDIC
How much does Coinbase charge to buy Bitcoin?
Coinbase fees are based on the method used to buy Bitcoin. For example, a bank account transfer for customers in the U.S attracts a 1.49 percent fee while buying Bitcoin using a debit/credit card in Australia attracts a 3.99 percent fee. But, if the transaction amount doesn’t exceed $10, the charge is $0.99.
For new crypto users, buying a Bitcoin on the exchange is easy due to its simple interface and the option to purchase crypto using credit / debit card or a bank account. Coinbase Wallet is available on both iOS and Android app stores. The wallet removes the fear of using complicated crypto addresses. Coinbase Wallet can be used to store Bitcoin, Ether, and a host of other crypto assets. The exchange is secure, and deposits from a bank account are insured.