There are many ways through which one can purchase Bitcoin. Buying through a popular exchange such as Coinbase is however the safest and easiest way to buy Bitcoin. Read further to know how and why.
Coinbase gained popularity because it is safe and quite easy to use in comparison to its competition. Coinbase has in fact, become so popular that they are having overflow challenge of new customers. Coinbase reported a whooping 25 million users in October 2018! They have beaten companies such as Charles Schwab, which has just 10.6 million brokerage accounts. Schwab has been in existence since decades, against Coinbase who began operations in 2012.
Why Is Coinbase So Special?
If you’re interested in cryptocurrency trading without passing through the hassles of having to deal with the complications of the underlying technicalities in most other platforms, Coinbase is basically the way to go. Their platform makes it easy for any newbie to understand speculation and investing of this relatively new type of currency.
Coinbase stores 98% of their customers’ funds offline to further ensure maximum security of the cryptocurrency assets you purchase with them. Coinbase mentioned in their website that they take care to disconnect entirely from the internet, sensitive customer data that should normally reside on their servers. These data is further encrypted and transferred to USB drives and paper backups, and then distributed to safe deposit boxes vaults all over the world in the spirit of further safe-keeping.
There is a 2% customer funds held online. These are well covered just in case there is an accidental breach of Coinbase’s storage online. Fiat currencies are held on behalf of customers in custodial bank accounts, and covered by FDIC insurance for up to $250,000 (as are done in regular banks). They go these lengths just to ensure customers assets are protected (as long as these assets are in fiat currency), also covering possible event of Coinbase’s insolvency.
Coinbase also offers a Coinbase vault for customers who have so much money tied up in bitcoin and need a more secure storage space. These vaults have time-delayed withdrawals of up to 48 hour window, in case the customer wishes to cancel. There is also a multiple approvers option, where multiple people will have to approve the transactions before they go through. The multisig vault by Coinbase is more involved, rigidly secure and would require multiple keys and some procedures to unlock.
So I’d say if you were to keep your crypto on an exchange, then Coinbase would be your best bet.
To Get Started
To begin, you will have to provide the following:
- A valid photo ID (such as a passport or driver’s license)
- A credit card or bank account
There is no minimum account size requirement in Coinbase, as you may choose to buy your bitcoin at coinbase and decide to move it to your private wallet, and have a zero account balance at coinbase afterwards.
You will also be required to provide some valid identification, such as a photo ID or drivers license. There are exchanges that require you do a selfie of holding your identification card. You are to directly upload your ID to the Coinbase website. Sending of IDs by email is not allowed by Coinbase for security purposes.
If you want to purchase Bitcoin instantly without waiting days for wire transfer, then you are also required to link a bank account or credit card. Coinbase would conduct a due diligence, where they will send a few pennies to your bank account, which you must verify to them. They do all of these for verification and authentication purposes, which is the same process for all exchanges that allow you to instantly buy crypto with fiat money.
Opening An Account with Coinbase
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As soon as you’re ready to sign up to your account, just visit the account sign-up page. You’ll land a page as below:
Fill in your details into required fields to get the account opened. Ensure you comply with the prompts to upload your ID and the verify bank account and credit cards part as you go. Any legit crypto exchange will require your photo ID to be compliant with regulations. So if an exchange doesn’t ask for your ID when you open a new account, then you should be concerned of the legitimacy of that exchange.
The prompts on Coinbase are simple to follow and in no time, your account will be all ready to go. As soon as you’re done opening the Coinbase account with verified ID, you will see your dashboard, where the prices of Bitcoin, Ethereum, Litecoin and other altcoins are displayed:
How To Purchase Bitcoin On Coinbase
To buy Bitcoin, simply scroll up to the top of the Coinbase home page and click on Buy/Sell button. You will see a pop-up screen that looks like this:
You may want to specify any dollar amount worth of Bitcoin that you want (or any other currency on the list) and the website will display the accurate amount of BTC to be received for that amount.
In the payment method section, you can add your bank account or a Visa or Mastercard for quick and easy purchase. As you can see from the screenshot above, you will receive 0.0461 BTC for $500 CAD (the base currency depends on your account setting. You can change this to USD or your local currency.)
You will also notice that $500 CAD worth of BTC would cost $19.18 fee. This is approximately 3.8 percent of the purchase price. The price of Bitcoin at the time of this sale was $10,429.87 CAD.
Click on “Buy Bitcoin Instantly.” You’ll then see a confirmation that the purchase is successful.
Now, return to the dashboard and find a summary of your account and its activities so far, including the just concluded purchase of a $500 worth of Bitcoin. The same process applies when you decide to sell your asset.
And that’s it! Now you’re one of the pioneers in investing in cryptocurrency.