How to Buy, Sell, and Keep Track of Bitcoin
So you want to buy some cryptocurrency. The blockchain-based digital currency has experienced some crazy ups and downs since last year’s skyrocketing price craze, so if you’ve waited this long to buy in, you can scoop up some coins for far less than at the height of Bitcoin madness.
How can you get some? You’ll need to use an exchange to buy and sell the cryptocurrency, and a wallet app to store it securely. If you’re in the US and want to quickly buy some Bitcoin, Ether, Litecoin, or forked coins such as Bitcoin Cash and Ethereum Classic, Coinbase is the most popular and user-friendly option.
The exchange is also exploring support for a range of other crypto assets, but only for wallet storage, not for trading. Here’s how you get started buying and selling cryptocurrencies on Coinbase.
Choose an Exchange
Coinbase only supports Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, and Litecoin for the moment, so if you want to stick with those three cryptocurrencies you can simply download the Coinbase app.
However, there are plenty of other exchanges. Bitfinex and Kraken are popular options that support those three, as well as dozens of other cryptocurrencies including Dash, Iota, Monero, Ripple, Stellar, Zcash, and more. Other options include Gemini, Bitstamp, and Bitwage, to name just a few.
Download a Wallet App
You’ll also need a wallet app for each type of cryptocurrency you’re looking to hold. Coinbase makes it easy. The app stores your coins in its private servers in individual wallets for Bitcoin, Ether, and Litecoin. So if you’re using Coinbase, all you need to download is the single app.
Here’s how it looks. Yes, I compulsively organize my apps into folders and name said folders with corresponding emoji. Don’t @ me.
However, going with Coinbase puts you at the mercy of its system. If you want to mix and match your own exchange and wallet apps, there are countless options for Bitcoin wallets using desktop and mobile apps, Ethereum wallets, and so on. From here on out we’re walking you through the Coinbase experience, which all happens in the mobile app and can have you buying and selling coins in a matter of minutes.
Certain states require those trading cryptocurrency to verify their state of residence, so enter the state in which you currently reside.
Verify Your Identity
Coinbase requires you to add a number of other personal details and identifiers including date of birth, address, and the last four digits of your Social Security number. The app also surveys some details about your income and profession.
Complete Account Setup
At this point, you’ll be taken into the main Coinbase app, where you can see current Bitcoin, Ethereum, and Litecoin prices. However, you’re not yet ready to buy and sell.
Before you start trading, you’ll need to verify your phone number and link your Coinbase account to your bank in order to deposit and withdraw funds. The phone verification is easy: simply enter your number and you’ll receive a test with a seven-digit code to enter.
Add Your Bank Account
When adding payment details, you can choose either a bank account or a credit/debit card. Bank accounts take a few days to process transactions, but you can invest larger amounts and the price at which you buy is locked in that day even if the sale doesn’t clear for a few days. When you choose the bank option, Coinbase will open a searchable list of banks to choose from. If you want to use a credit or debit card to buy coins, you’ll need to add a bank account or a wallet app to sell.
You’re Ready to Buy Some Crypto
You did it! Bitcoin, here you come. Now that your account and bank details are set up, you’re ready to start buying and selling cryptocurrency. Coinbase recently enabled immediate trading, so you don’t need to wait a few days after signing up before your account is verified. You can start buying and selling right away.
Check Current Prices
The first icon on the left of the menu at the bottom of your Coinbase app is the Prices tab. Here, you can see current Bitcoin, Ether, and Litecoin prices, If you click into one of the graphs, you can toggle the price index by hour, day, week, month, year, or all-time to see how the price has changed and whether you want to buy now or wait out a better price.
If you’re ready to buy, you can hit the Buy icon in the menu or click into it directly from the Prices tab. First, let’s buy some Bitcoin. Enter either a US dollar (USD) or Bitcoin (BTC) amount you want to buy, and the calculator will let you know what the value translates to. Then choose your wallet (the default Coinbase BTC wallet unless you’ve added an outside wallet app), and hit the buy button to go to the confirmation page and complete your transaction.
Congratulations, you’re officially a cryptocurrency owner. We only bought a fraction of an amount for the purposes of this story (Bitcoin is expensive, man) but you’re eligible to buy as much as your bank will allow per week.
Same goes for selling: choose a coin in the Prices tab, and hit the Sell button instead. The limit differs depending on whether you’re buying or selling. Coinbase has also upped its initial buying and selling limits, from a $5,000 USD buying limit and $10,000 USD selling limit, now offering a total daily limit of $25,000 USD.
Check Out Token Details
Coinbase has gradually added more features and functionality, including more detailed information about each coin the exchange lists. If you tap on one from the Prices page (Ethereum, for instance) you can scroll down below the top graph to see information including current market cap, trading volume over the past day, circulating supply, a brief description of the coin and asset type, and links to more information. Don’t buy any cryptocurrency before you know what it is you’re buying.
Buy Some Ether, Too
Don’t stop now, you’re on a roll. Once you’re on the Buy or Sell screens, you can tab between Bitcoin, Ether, and Litecoin to check the exchange rates and quickly complete a transaction with a few taps. Coinbase makes it easy to strike when the price is just right.
Don’t Forget the Exchange Fee
Don’t forget about Coinbase’s cut. Exchanges need to make money, too. On the confirmation page before you buy, you’ll see the flat $1.99 or $2.99 Coinbase conversion fee for any purchase of less than $200. For larger purchases, the company takes a variable percentage depending on the country.
Diversify! Snag Some Litcoin
Coinbase supports all three cryptocurrencies, so you may as well take advantage. Litecoin has been on the rise, but is a cheaper buy than Ether or the exorbitant current Bitcoin prices. Get more for your money and pick up some LTC. In the US, it’s 1.49 percent with a $0.15 minimum for a bank account or a Coinbase USD wallet, and 3.99 percent for a credit or debit card.
Wow, Look at All Your Virtual Money
Look at you go! You’re rolling in the cryptocurrency now. Just tap over to the Accounts tab and check out the balances in your respective wallets.
The company also has its own standalone Coinbase Wallet app for Ethereum, which lets you hold coins bought and sold on the Coinbase exchange and other ERC20 tokens. Coinbase Wallet is also a DApp browser for interacting with decentralized Ethereum-based applications.
Exchanges Take a Few Days to Process
Do not fear if your wallets haven’t reflected your bought or sold cryptocurrency. Don’t forget that exchanges take a few days to process transactions through your bank. However, upon tapping into my Bitcoin, Ethereum, and Litecoin wallets, I saw the transaction had posted and was currently pending. Your purchase or sale is locked into the coin price at the time of your transaction, even if it takes a couple days to clear.
Coinbase also sends you a confirmation email every time you complete a transaction, so check your inbox to confirm your purchase or sale went through.
Buy Some Bitcoin Cash
Now You’re Rolling in Virtual Dough
Voila, in minutes you can now buy up to five different cryptocurrencies from the Coinbase mobile app.
Buy Ethereum Classic
Your Assets Are Flush
Congratulations, you’ve bought Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, and Litecoin. All that’s left to do is watch how your new crypto investments do, until you’re ready to buy or sell. You can also send or receive cryptocurrency on the app. Before you can do that, however, you need to complete one last step.
Enable Send and Receive
If you want to go beyond buying and selling and use Coinbase to actually receive and send cryptocurrency to others, Coinbase requires some additional verification. You can tap on the Settings icon and go into Account Level to start the process for enabling send and receive functionality.
Verify Photo ID
To enable send and receive, Coinbase requires you to scan an identity card or driver’s license. Choose your ID type, take a photo of the front and back of the card, and submit.
You’ve Unlocked Level 3
That’s it! With the ID verification process complete, you can now send and receive cryptocurrencies on Coinbase. This is what the exchange calls level three of its service after level one (verify phone number) for limiting investing, and level two (verify personal information) for unlimited investing and storage.
Create a Price Alert
When you create a price new price alert, you’ll see a slider that lets you toggle the alert to a specific USD dollar value for Bitcoin, Ether, or Litecoin. If the cryptocurrency hits your target price, Coinbase will send you a push notification to hop onto the app and buy or sell. You can create as many alerts as you want, toggling them on and off on the Alerts page to determine which are active as you track your investments.
There is plenty of inherent risk with investing in cryptocurrency. Coinbase will even tell you so. Price surges may incapacitate the exchange temporarily, transactions take time to process, and if you’re using the default Coinbase wallets, your encrypted coins are not under your control. Exchanges are also prime targets for hacking, and there are plenty of cautionary tales to prove it.
All the more reason for you to take advantage of as many built-in security and verification features as your exchange and wallet apps offer. Go to the Settings tab in the Coinbase app to access advanced passcode settings or add additional identity documents.
There will always be a risk in using online cryptocurency exchanges and wallet apps. Unless you’re using cold storage and holding your own private keys, that’s simply the reality of dabbling in cryptocurrency. Whether you’re serious about investing or simply want to have some fun and stash some Bitcoin as a long-term holding, apps like Coinbase make it easy to get started. In minutes, you can begin wheeling and dealing Bitcoin, Ether, and Litecoin from the comfort of your smartphone.