Guide - Buying Bitcoin (BTC) on Coinbase

Knowledgebase Forum - May 14th 2017

  1. evo

    evo Admin

    Joined:
    Apr 2017
    From:
    Seattle
    Crypto:
    BTC/ETH/XRP
    This is a how to guide for buying Bitcoin (BTC) from Coinbase. I'm writing this guide for those who are very new to cryptocurrency, and I will take the time to expand on each step that is happening throughout the process.

    If you have any questions about any of the steps, terms, or process, please post up a response in this thread and I'll respond as I read them. And for general questions about anything related to cryptocurrency, please post those questions in the dedicated Cryptocurrency section of the forum.

    Buying Bitcoin (BTC) on Coinbase

    The first step is you need to convert your fiat money to digital cryptocurrency. This means you're going to take money from your bank account and use it to purchase Bitcoin.

    Step 1 - Create a Coinbase Account

    The first thing you should do is create an account on Coinbase, which is one of the easiest, safest ways to buy Bitcoin. They are a legitimate company and are US based.

    Here's a referral link - Coinbase

    When signing up for these cryptocurrency financial services, it's very important to use a unique, strong password. Make sure you've stored this password in a safe place, and under no circumstance, share your password with anyone. Giving access to these accounts is essentially giving access to one of your financial accounts. It's your responsibility to protect and safeguard your login credentials.

    Just like signing up for any bank account, Coinbase will ask for your name, address, contact information, and will require you to verify your identity with your Driver's License, SSN, birthday, etc.

    Step 2 - Funding your Coinbase

    After your profile has been created, the next step is adding a funding source, which can be any bank account or credit card. I strongly recommend only using your bank account because the fees to convert your fiat to Bitcoin will be the cheapest.

    When setting up your bank account, Coinbase may verify your account by making 2 very small transactions and ask you to verify those transactions. Most banks show pending transactions, so depending on your bank, login to your online banking and those 2 small transactions most likely will show up in your 'Pending Transactions' and you can immediately get verified with Coinbase.

    Step 3 - Buying Bitcoin on Coinbase

    Once your funding source has been setup, you're ready to buy some Bitcoin. Go to the Buy/Sell section, and here you can choose your cryptocurrency, funding source, and amount to purchase. You are not required to buy Bitcoin in whole numbers - you can choose a quantity with up to 8 decimal points. Coinbase only requires the transaction size to be a minimum of $1.00 USD. Coinbase will charge a small fee to convert your fiat to Bitcoin, which is based on your transaction amount.

    The only frustration you're going to encounter is a mandatory 7-day holding period for any Bitcoin you buy, meaning you're going to be required to wait 7 full days until your Bitcoin is available. The price of Bitcoin will fluctuate, but when you buy Bitcoin, you're locking in that price at the time you execute your transaction to buy. Regardless of Bitcoin's price increasing or decreasing during that 7-day waiting period, your price will not change for that individual transaction because you've already locked it in. This waiting period cannot be overridden, so keep this in mind when you're thinking about making future transactions and will need to buy more Bitcoin in the future.

    It's worth noting to take a look at your Coinbase Verification and Limits page because this is something that will change over time. As you make more transactions and your account ages, your limits and verifications will increase, and then you can progressively buy more. If you keep maxing out your weekly limits or are a high net worth individual, you can always manually apply for higher limits.

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    On your Coinbase Accounts page, you will see a list of your Accounts, also known as Wallets. When it comes to cryptocurrency, your wallet is your individual holding account for a particular type of cryptocurrency. Wallets are unique to you, and wallets are unique to the cryptocurrency they've been assigned to. Bitcoin wallets can only store Bitcoin, Ether wallets can only store Ether, Litecoin wallets can only store Litecoin, etc.

    After your funds have cleared, Coinbase will credit your wallet with the amount of Bitcoin you purchased. And you're now the owner of that Bitcoin, and it's being store in your Coinbase wallet.

    Optional/Recommended Step - Setup 2 Factor Authentication

    I recommend to setup 2 Factor Authentication, which means after you login with your username and password to a site, an annoying third step will require you to provide a unique code, which will be generated from your 2 Factor Authentication app.

    Regarding 2 Factor Authentication, I recommend using an app instead of an SMS message being sent to your phone because in the event you ever lose your phone, your 2 step verification code generator will be recoverable.

    I recommend Authy, which is a free download for iPhone and Android. When using the Authy app, you don't need phone reception or Internet access on the device to generate codes - it all happens offline.

    Questions

    For questions, comments, feedback, or general thoughts, post up a reply within this thread, and I'll respond as I read them.
     
    Last edited: May 18th 2017

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