Let’s be honest, cryptocurrency is a little confusing…
That’s why I’ve written this guide – because it’s crucial that you ensure your investment is safe and secure.
Using the website Coinbase, which is the world’s most popular website for buying cryptocurrency, I’ll teach you step-by-step how to buy Bitcoin online…
If you haven’t signed up for Coinbase yet, use this link to get $10 of free Bitcoin.
How To Get Started.
1) Signup and Verify Your Email Address
The first step is to create an account on Coinbase.com.
Initially you will only be asked for your name, email, password, and state.
2) Choose Your Account Type
After you confirm your email address, you will be taken through a 4 part process to buy.
Choose whether you want to create an individual or business account.
3) Verify Your Phone Number
You will then need to verify your phone number. This is used as a form of 2-Factor Authentication, helping to secure your account.
4) Set Up Payment Method
The next step is to set up a payment method.
Coinbase accepts payment through bank transfer and credit card.
When setting up your bank account with Coinbase, they may first initiate two small transactions, then require you to verify the amounts.
When setting up a credit card, you’ll likely need to upload pictures of your credit card.
Both methods may require you to verify your identity. This is required by almost all cryptocurrency exchanges who handle fiat currencies (USD, EUR, Etc.), to comply with various government regulations.
5) Buy Bitcoin, Ethereum, and/or Litecoin
Lastly, it’s time to make your cryptocurrency purchase. The price and all Coinbase fees are clearly stated at the time of placing your order.
Your account will then be credited with the amount of cryptocurrency you purchased.
Is Coinbase Safe?
If you’re reading this Coinbase review, chances are this is a question you’re asking. The short answer is yes, but we’ll take a closer look at this in 3 parts below.
1. Company Legitimacy
As a company operating in the United States, Coinbase is required to comply with U.S. laws and regulations, at both a federal and state level. Here are some of the laws, regulations, and regulatory bodies that Coinbase complies with:
Registered as a Money Services Business with FinCEN.
Complies with the Bank Secrecy Act.
Complies with the USA Patriot Act.
Complies with state money transmission laws and regulations.
These regulations and laws force accountability onto Coinbase, something that may be lacking from some of their offshore competitors in other countries with less strict regulations.
Aside from the United States, none of the other 31 countries, where Coinbase operates, require licenses to operate a cryptocurrency business.
It’s also worth noting, Coinbase has many trustworthy investors backing the company. These investors include Alexis Ohanian (Reddit Co-Founder), Bank Of Tokyo, Blockchain Capital, and Digital Currency Group.
2. Safe Keeping of Funds
Coinbase segregates customer funds from company operational funds. These customer funds are held in custodial bank accounts. This means they will not use funds of yours to operate their business. They also claim, “Even if Coinbase were to becomes insolvent, the funds held in the custodial bank accounts could not be claimed by Coinbase or its creditors. The Funds held in those accounts would be returnable to Coinbase’s customers.”
98% of customers’ cryptocurrency funds are stored in secure offline cold storage. These cryptocurrencies are held on multiple hardware wallets and paper wallets. The physical cryptocurrency wallets are then stored in vaults and safety deposit boxes around the world. These measures protect customers’ funds from being lost or stolen by hackers.
The remaining portion of cryptocurrency, that is stored online, is fully insured by a syndicate of Lloyd’s of London.
United States residents who use Coinbase’s USD wallet are covered by FDIC insurance, up to a maximum of $250,000.
It’s important to note that, despite all of this, customers are still liable if their personal accounts are compromised. This is why it’s typically recommended to store your cryptocurrencies in an offline cold storage wallet that you control. You can view our recommended wallets here.
3. Personal Account Security
Coinbase offers its users a variety of features to secure their personal accounts. You should also use a strong, unique password.
Multiple 2-factor authentication (2FA) methods are available to help secure your account. The most basic 2FA option is through SMS texts, but we recommend setting up a third party 2FA app. Options for this include Google Authenticator and Authy.
You can also track the activity of your account and get notified if a new device or IP address attempts to access your account.
Coinbase offers customer support through email. In our personal experiences, we’ve typically received responses from support within 24-72 hours. For general questions, they have an extensive FAQ.
Coinbase serves customers in the following countries:
Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States