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.
There are multiple exchanges available to UK investors, but in terms of simplicity Coinbase ranks as the best in 2021, even though it isn’t the cheapest.
Coinbase is one of the most well-known digital currency exchanges in the UK. It allows you to buy, sell and trade Bitcoin and a growing number of altcoins instantly using fiat currency via a debit/credit card.
We believe Coinbase is ideal for beginners because it offers a safe and secure simplified exchange service in addition to the more complex Coinbase Pro, a professional trading platform, and a Wallet app.
Alongside Bitcoin, you can buy, sell and trade Ethereum, Litecoin, Bitcoin Cash, Tether, Cardano and Stellar Lumens and many other crypto assets.
A user-friendly interface
The regular exchange is incredibly simple to use – there are no candlestick patterns to follow or flashing trade signals – which can be daunting for beginners. Check out Coinbase >>
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.
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).
At the time of writing the fees ranged from 99p for trades up to £10, £1.49 for trades between £10-£25, £1.99 for trades between £25-£50 and £2.99 for trades between £50-£200.
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 ‘gas fee’ or ‘mining free’ 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 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.
What is Coinbase Pro?
Coinbase Pro is a professional trading platform offered to 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 Coinbase Pro trading screen:
Is Coinbase a legitimate exchange and is it 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.
Why does Coinbase give away free cryptocurrency?
Coinbase frequently offers its customers the opportunity to earn free crypto with its Coinbase Learn programme.
This usually happens when a new coin has been listed on the exchange. You’ll be asked to watch a few short explainer videos before answering some simple questions.
Once completed, you’ll be rewarded with free crypto of between £5-£10.
Does Coinbase offer a referral scheme in the UK?
Yes. If you have Coinbase account you’ll get a refer a friend link that you can share.
If someone signs up for an account using your link and goes on to trade US$100 or more of crypto both you and they will get an extra $10 of free Bitcoin.
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).
While expensive compared to its competitors, the basic Coinbase exchange 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.
Once you have the confidence to use Coinbase, you can start to experiment with the Pro version, which despite all the bells and whistles is actually quite straightforward to use once you understand what everything means.
Check out our guide to the top five UK cryptocurrency exchanges.
*This article is for informational purposes only and does not constitute financial or investment advice.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).