How Coinbase works: Which Coins You Should Buy?

Umme Haani
Umme Haani is a writer for Thecoinrepublic. she contributes a researched piece on cryptocurrencies and updates. Umme is an aspiring engineer who immensely enjoys writing and technical writing brings the best of both worlds under one roof for her.

Highlights

  • Coinbase is the best place for the buying and selling of digital currencies and also to perform verification of the transactions on the blockchain network.
  • This exchange ensures that the sensitive data residing on their servers have no connection to the internet outside the platform at all.
  • It allows exchanges of cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ethereum Classic. 

Trading platforms are necessitated for the trading of cryptocurrencies. A leading exchange platform preferred the most is the Coinbase.

Coinbase is the best place for the buying and selling of digital currencies and also to perform verification of the transactions on the blockchain network. It is a  global digital asset exchange company (GDAX) that offers a wallet besides to the storing of digital currencies. It offers an exchange of cryptocurrencies in 32 countries with Bitcoin transaction allowance in many more countries.

According to the Coinbase website, 10 million customers have adopted this platform and has facilitated the exchange of value worth more than $50 billion in digital currency.

How to get started on Coinbase?

  • Creating a Coinbase account

Coinbase requires setting up an account for the verification of identity. Creating a Coinbase account is much simpler than one expects. Identification credentials need to be filled up to perform verification. A code will be generated to confirm the same. This verification of identity is necessary to avoid the occurrence of money laundering or other fraud activities. 

  • Choosing a payment method

Before stepping to buy cryptocurrency, a payment method of one’s choice needs to be added. Debit card/credit card, bank account, or wire transfer are the three basic payment methods offered. Link of credit/debit card or a bank account to the Coinbase account needs to be provided.

Bank account payment methods usually take longer to verify transfers but have higher limitations of transactions allowed. On the other hand, limits for credit/debit cards are comparatively lower, but they offer a simplified method to transact. One can purchase digital currencies through a simple transfer of funds from the bank account to the site.

Debit/credit cards help buy smaller amounts, whereas, bank accounts suit better for larger purchases. Hence, as per the amount, one is ready to buy, the payment method could be chosen. 

  • Purchasing Cryptocurrency 

After the setting up of an account, one can buy/sell cryptocurrencies super easily. The amount in dollars must be specified after selecting the cryptocurrency of one’s choice. Following this, the confirmation of the purchase will be asked. To confirm the purchase, a 2-factor-authentication code must be entered.

Different Fees Charged on Coinbase

  1. Conversion Fee: There is a fee charged whenever a conversion of fiat currency to cryptocurrency occurs. 
  2. Transfer Fee:  A fee is charged whenever there is a transfer of crypto to a different wallet. However, there is no fee charged if the wallet is another Coinbase wallet.
  3. Mining Fee: One will encounter fees whenever a crypto transaction occurs. Mining fees are dependent on the chosen cryptocurrency.

Does Coinbase offer enough security?

Coinbase generates codes whenever there is access to the Coinbase account. This is in specific ensures a security feature. Two-factor-authentication is another security measure that prevents the possibility of hacking and other fraudulent activities. It ensures that the sensitive data residing on their servers have no connection to the internet outside the platform at all.

The sensitive data on the platform is well-encrypted and is distributed in secured deposit vaults worldwide. Coinbase offers a Coinbase vault too, this allows the cancellation or withdrawal in case one intends to. It offers a vault too. Its speciality is additional security as there exists a requirement of multiple keys to unlock it.

Coins to Buy via Coinbase Exchange

Coinbase allows exchanges of cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ethereum Classic. 

  1. Bitcoin (BTC): It is the top-listed cryptocurrency on the Coinbase platform. The most widely used and recognized is this coin. One can trade Bitcoin easily via Coinbase exchange.
  2. Ethereum (ETH): Ether, a digital currency featuring smart contracts on the Ethereum network follows after Bitcoin on this platform. It owns a high ranking for adoption.
  3. Bitcoin Cash (BCH): Being an alternative version of Bitcoin, it offers renovated features and has a different development route altogether.
  4. Litecoin (LTC): Litecoin, having a source code similar to Bitcoin is created to offer much cheaper and faster transactions than Bitcoin itself. Coinbase is an ideal platform to trade and hold LTC safely.
  5. Ethereum Classic (ETC): Coinbase supports trading of ETC too. It was designed to make new applications easy. Through Coinbase, one can get easy access to buy, sell and hold this coin.

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