If you are new to, or at least a beginner in the world of cryptocurrency, then you know how exciting the future is. You are probably feeling a bit nervous as well as you begin to venture out into new investments and expand your financial vocabulary and knowledge.
The purpose of this article is to answer the question of what is Coinbase.com. As this answer is unfolded, you will potentially be introduced to some new vocabulary associated with cryptocurrency. No need to worry though, it will all come together for you.
During this post, I will make comparisons to a process you are more familiar, and undoubtedly more comfortable with; the banking industry and the trading of stocks.
Cryptocurrency (crypto) is essentially a digital asset or digital money. It exists only on the internet. As this is a relatively new frontier, many people have a difficult time with this concept. So let’s look at it from a perspective most of us can relate to.
You are more familiar with cryptocurrency than you know.
As a society we are moving toward a similar process. When I receive a check from my current employer, or take an owner draw from my business, I do so with direct deposit. A direct deposit is an “electronic transfer” from one account to another. This can be from your employer to your bank or person to person.
Unless making a cash deposit, you never physically see money deposited in your account. So where does your money go after making the deposit? The bank owns the money and uses it to its own advantage through loans or investments. Meanwhile you just track your funds via a website or monthly statement. You don’t ever see the exact money you made the deposit with.
Why is that? Because you probably pay your bills electronically, conduct electronic debit card transactions, use person to person electronic transfers with a phone app like Venmo, etc… Most people are therefore experiencing what cryptocurrency is, just in a different form.
Just as our money “exists” in an electronic form at our bank or on our computer, so to does cryptocurrency “exist” on the internet.
Another example, and one you can mostly relate to would be trading stocks. You fund your trading account with an online broker. This is funded by an “electronic transfer” or check. One your account is funded, you can check your balances online and begin placing trades. You set watch lists and watch your picks either rise or fall. You look at your computer screen and watch all of this happen right before your very eyes as prices are always changing. When you are ready to take money out of your account you transfer funds back to your regular bank account, without ever physically touching currency.
Starting to see some similarities?
However, some naysayers will argue the US dollar is the solid foundation for which all money/assets/trading occurs. The question has to be posed; based on what? The gold standard was abolished by US President Richard Nixon in August 1971. Since that time, the US dollar (and most other currencies) are based on the faith of the people. It is merely an idea.
So the idea of cryptocurrency is logical. It is an idea that is beginning to work its way into society, like it or not. It is usually better to be ahead of the curve.
So what does all of this have to do with Coinbase?
For those of you new to cryptocurrency, I will continue with the above comparison of trading stocks.
Many will be familiar with online stock trading platform giants such as TD Ameritrade, Charles Schwab, and Interactive Brokers.
Consider Coinbase to be a similar trading platform; but for cryptocurrency.
The setup steps are essentially the same with the first step being to link your bank account (ACH in the United States and SEPA in the EU) to Coinbase and fund your account with the amount you deem appropriate. This is a critical first step because when you trade or sell cryptocurrency this is how you will also withdraw funds. Other option include debit cards, credit cards for currently linked cards only, and PayPal for withdrawal only.
In the example on the left you see this particular account can have US dollars deposited (to Coinbase) or withdrawn (to your bank account.)
Accounts revolving around cryptocurrency are called wallets. In the simplest terms, a wallet essentially acts as a centralized depository or “storage container” for your digital assets. This is a security feature where you store private keys on the device of the user which only you have access to.
Once your account is funded, you will be able to purchase different cryptocurrencies. The above example shows Bitcoin (BTC) but Coinbase has fifteen cryptocurrencies to choose from. These are in numerical order based on Market Cap.
- Bitcoin (BTC)
- Etherium (ETH)
- XRP (XRP)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- EOS (EOS)
- Stellar Lumens (XLM)
- Chainlink (LINK)
- Etherem Classic (ETC)
- Zcash (ZEC)
- USD Coin (USD)
- Basic Attention Token (BAT)
- Ox (ZRX)
- Augur (REP)
- and Dai (DAI)
Coinbase does not offer much variety in coins as there are currently over 2200 cryptocurrencies available. But if you are new to cryptocurrency, Coinbase is a great place to start because it very easy and simple to buy and sell coins. One of their newest features includes real-time price alerts. You can also earn different coins by watching introductory videos (approximately 3 minutes) and answering a simple question. Don’t worry. You can’t miss the answer!
Earn $10 after buying or selling $100 or more on Coinbase!
The coins on Coinbase are comparable to having money in a brick and mortar bank. Coinbase has control of your coins, not you. Just like a bank, the coins in their system are used to make Coinbase money. But whenever you need or trade coins, they are always available to you. You can buy and sell the fifteen coins offered 24/7/365. Plus you pay approximately 3.99% transaction fee entry and exit fee, which is low compared to other transfer fees for cryptocurrency.
The Coinbase Pro option is the trading platform at Coinbase but the transaction fees are reduced to 0.25%, a substantial savings. The Pro application is for those experienced with advanced trading methods.
Coinbase was the first to receive US Regulatory Approval and as a result has provisions set in place like banks such as Anti-Money Laundering. As a result, if you are a US citizen your account is FDIC insured up to $250,000. However, your transactions are tracked and your account can be suspended/revoked if you use any coins for Bitcoin gambling, adult based transactions, and darknet purchases, or reselling of coins.
Coinbase was founded in 2012 and is headquartered in San Fransisco, California. Their mission statement is to “create an open financial system for the world.” Their values and priorities can also be found at their homepage under the heading of: Mission. They are able to conduct transactions in 103 countries.
Coinbase is one of the best platforms to purchase cryptocurrency due to their low fees. This is especially convenient if you transfer coins to another exchange which typically require an initial deposit in the form of Bitcoin. Coinbase has invested a lot of money to make purchasing a simple process and it is a great way to become involved in cryptocurrency with having some security. As you gain experience in buying/selling/trading coins I recommend an external secure wallet. A good desktop version to consider is Exodus.
When you create your account and buy or sell $100 or more of coins you will earn and additional $10 in your account.
Welcome to the world of cryptocurrency!
As with all posts on this website, your comments or questions are always appreciated and will be responded to. Wishing you great success!