Coinbase: Fiat Exchange Tutorial

Coinbase is the largest fiat-to-crypto exchange, and was listed as the most downloaded app in the iTunes store at the end of 2017.

coinbaseThe homepage is nothing spectacular. You can sign in, sign up, or look at the charts for individual coins. Under the products tab, you can view the exchange (called GDAX) or you can look at developer and merchant tools. These allow business and programmers access to the necessary code to build programs and apps that can communicate with Coinbase.

If you’re new, click the sign up button and start the process of buying some cryptocurrencies. The account creation process is fairly standard; enter a username, put in your email and create a password.

 

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However, due to increasing government regulations, Coinbase is also required to get some sensitive information about you to comply with KYC standards. KYC stands for “know your customer” and was implemented to protect people from identity theft and fraudulent spending. For that, it is imperative that you always enable 2-factor authentication (2FA) on any account dealing with financial or personal data. This will require entering a randomly generated code, sent by text message, in addition to your password to ensure the highest level of security.

Once your account has been activated, you will need to enter in banking information. Most banks will allow transactions to Coinbase for digital assets, but you should check to be sure. Capital One for instance will not authorize payments for cryptocurrencies. Visa is also looking at taking a stronger stance against cryptocurrencies.

Make sure you follow all the legal procedures for investments and wealth management. As of now, several countries are looking to ban the use of digital assets, and exchanges have already been shut down in China and South Korea. It is a volatile climate, but the blockchain development has progressed too far to be stopped now.

Once your account is set up, and your information verified, you can access your dashboard. From here, you can look at your accounts, check the status of the markets or make your first purchase. Notice the bank limit, using a debit card has a lower limit than connecting your bank account, and paying with a card comes with an additional payment method fee. On the other hand, card transactions are instant, while bank transfers can take up to 7 days. If you link your bank to Coinbase, it may also be prudent to use a separate account for tax purposes.coinbase

You will also notice a payment scheduler. Coinbase knows the importance of dollar cost average, and they make it as easy for you to set up that option. Once you’ve purchased some cryptocurrency, you can see your balances in the portfolio. From here, you have access to your wallets and can send or receive these specific coins. Note: Only send your assets to coin specific addresses. If you send your Bitcoin to a Litecoin address, the transaction will fail, and you could lose your Bitcoin.

Moving your currencies to an exchange is also a common practice, and you can often begin trading within a few minutes. Doing so comes with inherent risks. Trading any asset on any exchange is a lot like gambling, you could win big or lose it all. If you do win big, you’ll have to convert your crypto into fiat again, and Coinbase can help. Just like purchasing, withdraws have a limit as well. You’ll notice they are much higher though. Also, repeat orders are just as easy to set up. Selling your Bitcoin has the same 7 day waiting period for bank transfer.

Taxes have been imposed on American coiners beginning in 2018. If you sell or trade your digital assets, you are then liable to pay a capital gains tax. You can minimize this by holding the asset, without trading, for 12 months. For more information, read the IRS notice

If you decide to buy, use my referral link and we both get $10 of Bitcoin as a reward.

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