Coinbase is an online Bitcoin exchange. Users can buy and sell Bitcoins and transfer them to other online wallets. Coinbase also offers its own online wallets where users can store Bitcoins online. Based on my experience buying Bitcoins with Coinbase, I have observed the following:
You Must Have a Linked Bank Account – Coinbase requires that you link a bank account in order to buy Bitcoins. You cannot buy the cryptocurrency with credit cards, because credit cards can be charged back, while the Bitcoins cannot. Coinbase lets you use a Visa credit card as a backup form of payment only. You may not pay with a credit card until you have linked a bank account. This means having your routing number and account number on hand.
You Must Verify Your Identity – One way to verify your identity is to provide login credentials to your online banking account. This method takes about a minute. Other alternatives are to upload other documents, which will take longer to verify.
You Must Have a Mobile Phone Capable of Receiving SMS – Coinbase requires two factor authentication to log onto your account. This is for security reasons. After you enter your password, you have to enter a code, which is sent to your mobile phone. This makes it difficult for potential hackers to steal your Bitcoins and banking information.
You Can Buy as little as .10 Bitcoin – This is plus, especially with Bitcoins being expensive. You can buy fractions of Bitcoins with a minimum amount of .10 Bitcoin.
You Can Send Bitcoins to Any Address or Merchant – Using Coinbase’s online wallet, you can send your Bitcoins to any other Bitcoin address or merchant that accepts them. This makes it easy to pay for goods with Bitcoins online. You can also receive Bitcoins in your wallet from anyone.
You Have to Wait Up to a Week For Your First Bitcoins – The first transaction you make will take about a week. The money will not be withdrawn from your bank account until a few days later. Then the Bitcoins will not be delivered until a few days after that. Once the first transaction is successful, you can make new transactions much faster. You can also make instant payments with a visa credit card.
Prices are at a Market Price, minus a 1% Exchange Fee – For the market of Bitcoins, Coinbase is very competitive. There are no high markups or fees like on some other exchanges. The market price changes every few minutes, so you know you are getting the most recent up to date price.
Overall, I’ve been satisfied with my experience purchasing Bitcoins from Coinbase. Of course, no online exchange or online wallet is secure. Exchanges have been shut down in the past and it can happen again. Consider storing your cryptocurrency offline after you purchase them. There is also the high volatility risk of Bitcoin, and your value could be wiped out at any given time. When you buy Bitcoins from Coinbase or another seller, you accept the risk of a relatively new currency that is not backed by any government or hard asset.
