How to Use Coinbase to Buy Cryptocurrency
Coinbase is without doubt the number one platform for users making their first cryptocurrency purchase. It is highly likely that over 99% of all cryptocurrency investors have made a purchase on the platform at least once, and it usually will have been for the first purchase (and often many more afterwards).
The reason the service is so popular is because it’s one of the only fully regulated businesses that allows you to buy cryptocurrency with fiat currency (that’s the likes of dollars, pounds and euros to you and me).
Most cryptocurrency sites allow you to exchange one cryptocurrency for another and we’ll cover those in another lesson. In this, we’re looking at how to make your first cryptocurrency purchase using your regular fiat money.
We’re not looking to pitch Coinbase to you here. In fact, we’ll start by saying some of the negative points about their service; it is relatively expensive to use and their customer service has been left wanting for a large number of people, although a lot of this can be attributed to astronomical growth in the cryptocurrency market that left the company a little surprised.
That said, you can get $7 worth of free bitcoin on your first $100 purchase if you sign up via this link and if you do so, we’ll also be rewarded with the same bonus.
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Well, you’ll pay a fee in the region of 3-4% on each purchase via debit/credit card. This means on a $1,000 purchase, you’ll receive somewhere around $965 worth of cryptocurrency. This fee isn’t extortionate, but then they do have a significant ‘spread’ – the difference between the ‘buy’ and ‘sell’ price – meaning you’re typically buying the coins at quite an expensive price relative to the rest of the market.
Whilst it is expensive, there is no debate in our opinion that Coinbase is by far the easiest and most straightforward way for most people to get their hands on cryptocurrency.
There are also ways to avoid some of the fees; if you send money to the account via bank transfer, you’ll avoid the whole debit/credit card fee.
It’s really simple to sign up to Coinbase and get your account verified nice and quickly. Make sure you grab your ID, such as a driving license or passport, as you will need it.
Navigate to the site via this link and sign-up by filling out the standard informational fields.
The only part of the process that you may not have experienced before is uploading your identity documents via webcam or other camera.
Your identity will either be automatically approved (or rejected if it can’t read the documents correctly) or will be sent for manual review. Once approved, you will be able to make your first purchase!
As we said a little earlier, Coinbase is one of the only sites that allows you to buy crypto using traditional currencies, and then you’ll need another site to exchange for other coins (commonly referred to as ‘altcoins’).
One of the reasons for this is that, because Coinbase is fully regulation compliant, they only list coins that they are 100% certain are compliant with governing laws in the countries they operate in. In contrast, altcoin exchanges tend to operate from countries with favourable and less-strict cryptocurrency laws such as Malta and Switzerland.
Whether you want to buy one of the small range of cryptocurrencies that Coinbase lists, or whether you have your heart set on an altcoin that you’ve discovered or has been recommended to you, your first port of call – either way – will be to buy one of the main coins listed on Coinbase. If you do wish to get your hands on an altcoin then you can exchange your Coinbase coins later on, which is explained in another lesson.
You currently have the option to buy Bitcoin, Ethereum, Litecoin, Bitcoin Cash or Ethereum Classic.
We would recommend looking towards one of Bitcoin or Ethereum if you wish to exchange for altcoins down the road.
Bitcoin has the most trading pairs on major exchanges out of all cryptocurrencies, meaning you’ll find it easier to switch it into an altcoin, but it does also have the highest fees out of the bunch. Ethereum has a large volume of trading pairs but offers the advantage of lower fees than Bitcoin does.
Of course, if you’re just looking to invest in Bitcoin, Ethereum, Litecoin or Bitcoin Cash and not switch into another altcoin then you can just buy the coin that you wish to hold onto long-term.
It’s really easy to buy whichever coin(s) you wish to purchase, whether you’re sat at the computer or out and about on mobile.
On the ‘Prices’ screen, click onto the cryptocurrency you wish to purchase. Click the ‘Buy’ button.
Type in the amount you wish to purchase (you will have low purchase restrictions during your first few purchases).
Press ‘Preview Purchase’.
Click ‘Confirm Purchase’.
The crypto is yours! It will now be in your Coinbase wallet.