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What is Coinbase and How to Use It

 

Cryptocurrency has become one of the hottest investment vehicles recently. Public figures from Elon Musk to soccer star Lionel Messi are known to have bought into cryptocurrencies or at least backed them publicly. Some even have shares in crypto exchanges. 

But does this mean you should follow their lead? Will cryptocurrency help you reap the rewards in the thousands of dollars like it reportedly has some of those celebs? Like the stock market, real estate, or any other form of investment, cryptocurrencies require careful consideration. Cryptocurrencies are known to be particularly volatile, so how will you take advantage of the fluctuations to make a good return?

Understanding Cryptocurrency

Before diving into Coinbase, you have to understand cryptocurrencies. Like conventional currency, cryptocurrency can be used as a medium of exchange. Some merchants currently allow buyers to pay for items in crypto. However, crypto is not centrally regulated and is not recognized as legal tender in the U.S. and most other countries. Transactions in crypto are encrypted and recorded on a public ledger from computers. 

The decentralized, unregulated nature of cryptocurrency appeals to those who value being able to transact anonymously. Cryptocurrency is also now viewed as a viable investment vehicle by those seeking a long or short-term investment that yields high returns. They are admired for skyrocketing value of such tokens like Ethereum, which quadrupled in value in the past five months. Bitcoin has had a less steady rise in value since the beginning of the year, but its value has still appreciated by more than $20,000 in the same period. 

What is Coinbase?

To be able to buy your bitcoin or any other virtual currency, for that matter, you must do so through a cryptocurrency exchange. A crypto exchange is an online platform that facilitates the purchase and sale of cryptocurrencies. With a cryptocurrency exchange account, you can also exchange one cryptocurrency for another.

Among the more popular cryptocurrency exchanges is Coinbase, which was recently listed on the U.S. Stock Exchange. One of the reasons for Coinbase’s popularity is the variety of altcoins it offers traders. Thanks to the variety Coinbase offers and the firm’s deliberate efforts to make cryptocurrency available to the average internet user with no coding expertise, Coinbase now has a client base of more than 56 million.

Coinbase presents cryptocurrency investors with an intuitive interface that even the novice user will have no trouble navigating. However, be sure to do your own research before entering the cryptocurrency world. You can also check out the many reviews for Coinbase online.

How to Use It

It’s important to note the difference between Coinbase and Coinbase Pro, although the same parent company owns them. Coinbase is aimed at making life as easy as possible for cryptocurrency newbies. With the pro version, you will have all the advanced reporting tools and trading options you need to trade effectively in up to 47 cryptocurrencies.  

After you sign up for your Coinbase account, you connect a credit card or bank account. Once you do so, you can begin purchasing cryptocurrencies from your virtual wallet. If you’re not well versed with the workings of cryptocurrencies, go through the tutorial videos Coinbase provides.

You can take advantage of the price alerts feature to get notifications when there are upward or downward swings in the prices of the currencies on your watchlist. The notifications can be in-app or pushed to your mobile phone. Coinbase also provides a news feed to keep you up to date with the latest happenings in the cryptocurrency world. 

Coinbase Fees

One of the downsides of Coinbase is its relatively high fees. For every transaction you perform using the platform, you are charged a base fee of 0.5 percent of the value of the transaction. On top of this, you are charged an additional fee depending on where your transaction originates. 

If you’re transacting from your USD Coinbase account, you will be charged 1.49 percent. If you prefer a wire transfer, the charge could go up to 10 percent. This is quite exorbitant if you compare it to exchanges like Binance, which charges a flat rate of 0.1 percent and can go down by 25 percent if you use their cryptocurrency.

Is It Safe?

Coinbase put in place a number of features to ensure you’re trading in a safe environment. The virtual wallet you are assigned as an account holder will be encrypted and secured further with biometric access control. To further add to their account holders’ peace of mind, Coinbase stores 98 percent of its crypto assets in offline cold storage sites.

A Smooth Start

If you’re new to cryptocurrencies, Coinbase is a great place to start. Besides allowing you to set up an account and start trading quickly, this exchange offers tons of useful information for your education. Just remember to keep an eye on the fees and stay current on the market trends.