Coinbase Review: Entry Level Platform For Beginners

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If you’re new to the world of Bitcoin and cryptocurrency you may be wondering how to buy your first coins and what’s the easiest way to add the asset to your portfolio.

Coinbase is a very well-known crypto exchange which in our view is ideal for those starting their crypto journey. It’s not the cheapest of platforms, but it offers great functionality and some more advanced features if required.

Here, I take a look at the platform which is opened up the world of crypto to many new users.

A user-friendly interface 

Coinbase used to run two separate platforms – the standard Coinbase exchange together with a standalone ‘pro’ version.

These have now been merged, meaning users can seamlessly switch between the two from the same account. The standard interface is ideal for those wanting to occasionally buy or sell a few coins will ‘pro’ is great for those who want a more professional trading experience.

The regular platform is incredibly simple to use – there are no candlestick patterns to follow or flashing trade signals – which can be daunting for beginners.

Instead, you’ll find a minimalist interface that displays the current prices of a variety of coins. Clicking a coin will show you the price movement over the past hour, week, month and so on.

The buying and selling window is similarly uncluttered. You simply select the coin you wish to trade and the amount you wish to spend and click either ‘buy’ or ‘sell’. It’s that simple.

Here’s the standard Coinbase trading screen:

How do I set up a Coinbase account?

Setting up an account on Coinbase is straightforward but is not instantaneous from our experience.

You’ll need to provide your basic details, such as name, address and phone number and set up a password. You’ll also need to give your National Insurance number.

After you’ve verified your details you’ll need to submit a photo ID, such as a UK driving licence to comply with AML/KYC rules.

Once done, you may have to wait a day or so for your details to be verified, although in some cases this can happen sooner.

How do I buy Bitcoin on Coinbase?

Buying Bitcoin or any of the supported cryptocurrencies on Coinbase is a remarkably simple process once your account is activated. 

To get started, all you need to do is click on your account name in the top right-hand corner, click settings then select payment methods.

Here, you can set up and verify a bank account which can be used to fund your account and accept withdrawals, and add the debit/credit cards you’ll be using to purchase crypto.

Once you’ve done this, you’re ready to buy your first Bitcoin!

To do this, click on the Buy/Sell button then select the coin you wish to buy and the amount you want to spend.

You’ll be given a live preview of the amount of crypto you’ll get for your cash at the current market rate and the fee for the transaction.

If you’re happy to proceed, click buy and the transaction will be made within a few seconds and your crypto will be available in your account.

How do I sell my Bitcoin through Coinbase?

Selling your Bitcoin is a simple as buying. Head back to the Buy/Sell button, select ‘Sell’ from on the pop-up window and enter the coin you wish to sell and the amount.

Again you’ll see a preview of the transaction and the fee before you commit to it.

Once you’re happy, click ‘Sell’ and a few seconds later the settlement amount will appear in your Coinbase portfolio.

You can then withdraw your fiat funds to the verified bank account set up under the payment methods section.

What are the fees for using Coinbase in the UK?

As we said at the start, Coinbase is more expensive than the other major exchanges.

Transaction fees depend on the amount of crypto you’re buying or selling, and are levied on top of the spread, which is 0.5% (this can be higher or lower depending on market fluctuations).

For higher value trades, a percentage-based fee is applied to the transaction.

Can I exchange Bitcoin and other cryptocurrencies on Coinbase?

Yes, Coinbase overs an exchange function which allows you to swap one crypto for another directly on the platform.

Click the Buy/Sell button again and you’ll see a tab marked Convert. Click this and you’ll be given the option to swap the coins you hold into other cryptos.

As with the buying and selling process, you’ll be shown a preview of the transaction before you commit to making it.

This is a quick way to add new coins to your portfolio if you want to diversify your crypto holding.

How do I send and receive Bitcoin on my Coinbase account?

Sending and receiving Bitcoin can be a daunting process for the beginner, but Coinbase makes it simple.

First, click the Send/Receive button, again on the top right of your account screen, to launch a pop-up window.

Here, you’ll see a box where you can input either an email address, mobile number or wallet address. The most common way of sending crypto is by using the latter.

A ‘mining free’ (or ‘gas’ fee if you’re talking about Ethereum) will be added to ensure the transaction will be processed. At the time of writing, Bitcoin fees were approaching an all-time high. Other coins are a lot cheaper to send.

If the person you’re sending coins to has a Coinbase account you can make an off-chain transfer using their email address or mobile number, which is free. You can also receive coins this way.

When it comes to receiving crypto, Coinbase provides you with the necessary addresses, which can also be scanned using a QR reader. You can also give these addresses to anyone who may be sending you crypto.

When sending and receiving coins it’s vital that you enter an address that corresponds with the coin you’re dealing with otherwise your crypto will be lost forever, such as trying to send Bitcoin to a Bitcoin Cash address.

Crypto transactions need to be confirmed by the network. The time this takes can vary depending on how many other transactions are being made at the same time.

Using crypto wallets can seem complex at first because they are presented as long strings of letters and numbers.

But once you get the hang of it, you’ll realise how quick and easy it is to transfer funds to anyone on the planet.

The professional trading screen

As I mentioned, Coinbase offers professional trading functionality under the same account as the standard exchange. It’s ideal for those who want to expand their knowledge of crypto trading by using candlesticks, moving averages and other tools, such as limit orders.

It uses what’s known as a maker-taker fee structure. This means that the fees depend on whether you use a market order or a limit order.

Market orders are filled instantly at market price. Here you are the taker. If you use a limit order which is filled at a later time, you are a maker, ie you’re providing liquidity to the market.

The fee structure is complex but considerably cheaper than the standard Coinbase exchange. Fees are around 0.5% on smaller transactions and get progressively cheaper the more you trade.

Here’s the trading screen:

Is Coinbase safe to use?

There is always a slight element of risk in any financial institution but to date there has been nothing to suggest that Coinbase is not safe to use.

It is a highly reputable company associated with many of the world’s leader financial companies and is covered by various insurances.

It has never been hacked and keeps nearly all of its customers’ crypto in cold storage, ie offline.

Having said this, cryptocurrency is not covered by the UK’s Financial Services Compensation Scheme anywhere.

It also makes sense to take your own precautions with your crypto. If you plan on ‘HODLing’ your crypto assets long term you should consider using a hardware wallet like a Trezor or creating a free paper wallet.

What is the Coinbase Wallet?

Coinbase Wallet is a crypto wallet that enables you to store your coins on your phone.

One key difference to the main Coinbase platform is that your private keys are stored directly on your device and not on a centralised exchange.

You do not need a main Coinbase account to use the wallet, which also give you access to DApps (decentralised apps) and staking opportunities (where you can earn interest on your cryptoassets).

It is a standalone product to the exchange and, as such, transactions to and from the wallet are carried out ‘on-chain’ meaning mining fees are payable.

Verdict

While expensive compared to its competitors, Coinbase is still the best starting point for Bitcoin beginners in our opinion.

It offers the simplest way to start your crypto journey while offering all the functions needed to enable newcomers to become familiar with using digital currency.

You may also like: Is it safe to store your crypto on an exchange?