Buy Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC)
The following is a step-by-step tutorial on how to buy your first Bitcoin, Ethereum and Litecoin on Coinbase with a Debit Card or Bank Account. Credit Card purchases are not allowed (as of January 4, 2018 most banks are not allowing crypto coin purchases with a credit card).
As part of the identification verification process, you will be asked to take a photo of your driver’s license for ID verification which will allow you to increase your spending limit from $200 per day to $1,000 per day for debit card purchases and $5,000 limits per day for (ACH) bank transfers with a cap of $10,000 weekly bank limits.
To secure your account, go to ‘Settings’ then choose ‘Enhanced Verification’ to activate Two-Factor Authentication (2FA). Next, install Google Authenticator App to your smartphone: iOS / Android. Once installed, open the app and click start. Click on the “+” sign and use your phone’s camera to take a photo of the QR code provided by Coinbase which will connect you with Coinbase’s server to access the one time login code.
According to Coinbase, ID verification is required because “as a regulated financial service company operating in the US, we are periodically required to identify users on our platform. This ensures we remain in compliance with KYC/AML laws (relating to laws prohibiting money laundering/illegal activities) in the jurisdictions in which we operate, something that is necessary for us to be able to continue to offer digital currency exchange services to our customers.”
Coinbase exchange is leading the way in terms of account security with their two-factor authentication and with their compliance with US laws.
Coinbase is a San Francisco United States based cryptocurrency exchange (ranked as the second largest exchange broker) with more than 10 million users, operating in the United States, UK, Canada, Singapore, and most of Europe. “All digital currency that Coinbase holds online is fully insured. This means that if Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result. The insurance policy covers any losses resulting from a breach of Coinbase’s physical security, cyber security, or by employee theft.”
Coinbase lets you deposit fiat money (USD/EUR) from a bank account, and trade Bitcoin, Ether, and Litecoin. Also, you have the option of buying Bitcoin with a bank wire transfer, credit card (currently only a few banks allowed), debit card (refer to Coinbase’s fee chart at the bottom of the page).
Buying Bitcoin quickly is time critical if you want to buy Bitcoin to trade for an altcoin (other coins that are not bitcoin) that is presently trading at a low price. Bitcoin is pegged as the one coin that can be traded on altcoin exchanges.
After completing the account sign-up and verification, the next step is to decide which payment method you’d like to use to buy bitcoin.
(2) Click on the “Buy/Sell” link then select “+ Link a New Account”
The fastest option to deposit money into your account (within 24 hours) and least inexpensive option is by bank wire transfer. Coinbase charges $10 for incoming wires and your bank may charge a wire transfer fee.
Debit cards incur processing fees and takes 10 days to complete your purchase.
It’s best to take a photo or print the page for the wire transfer instructions provided by Coinbase to give to your bank rep to order a domestic wire transfer. For first time wire transfer, in-person wire transfer is preferable so you won’t have to deal with additional banking security steps. If you request a wire transfer from your bank by 12:30 PM, the wire transfer will be executed within the same business day by your bank. Coinbase will confirm wire transfer deposits by email.
(3) Once Coinbase confirms your wire transfer deposit, you can buy Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH) or Litecoin (LTC) by selecting the “Buy/Sell” link. Select Bitcoin, Bitcoin Cash, Ethereum or Litecoin, then enter the amount in US Dollar which will automatically calculate the current exchange rate plus fee and provide you with your total cost and the amount you will be getting in the digital currency you chose.
Your coins will then be delivered to your Coinbase wallet which is located under the “Accounts” link.
Congrats! After completing the above steps, you’ve bought your first crypto-currency. Under the “Accounts” link, you can view how much you have in each of your accounts – dollar/euro, ETH (Ether), BTC (Bitcoin), Bitcoin Cash (BCH) and LTC (Litecoin), and you can decide to keep your funds in the Coinbase Vault (Coinbase holds less than 2% of customer funds online. The rest is held in offline storage which is transferred to cold storage offline for secure storage; learn how to use the Coinbase Vault) or keep in the exchange to buy, sell, or send your crypto currency anywhere you like such as to another exchange to buy altcoins, anyone you like internationally or to a desktop, mobile wallet or hardware wallet.
** Keep in mind Coinbase’s USA exchange fees when you select your payment option.
Base rate of 4% for all transactions**
Payment Method for Purchase Effective Rate of Conversion Fee (after waiver) U.S. Bank Account 1.49%, with a $0.15 minimum Coinbase USD Wallet 1.49% Credit/Debit Card 3.99%***
Payout Method for Sale Effective Rate of Conversion Fee (after waiver) U.S. Bank Account 1.49%, with a $0.15 minimum Coinbase USD Wallet 1.49% PayPal 3.99%
USD Deposit Method Fee ACH Transfer Free Wire Transfer $10 ($25 outgoing)
* Note – In some cases your bank may charge additional fees for transfers between your bank account and your Coinbase account.
** The base rate for all Purchase and Sale transactions in the U.S. is 4%. Coinbase waives a portion of the Conversion Fee depending on the payment method you use. The effective rate of the Conversion Fee disclosed here is calculated as the base rate, net of fee waivers. The base rate does not apply to U.S. Dollar deposits and withdrawals.
*** Note – Your bank may charge additional fees for Coinbase credit card purchases. To avoid these fees, use bank wire transfer, debit card or bank account. – February 7, 2018.
About the Author:
A former EPA member, Tim is currently teaching in the San Francisco Bay Area. With his experience in computer engineering Tim tracks emerging blockchain technology developments in the crypto currency space. He became a digital cash enthusiast after seeing the rapid growth of the Ethereum blockchain enterprise in banking and trade. Tim has a successful record of selecting digital assets for exceptional return on investment.
During the winter months, you will likely find Tim skiing down the slopes of Squaw Alpine ski resort in Tahoe. If you are a skier or rider, you should check out SnowPals.org and join his San Francisco Bay Area based club to socialize and network with skiers and boarders who want to find like minded folks for ski trips to Lake Tahoe and to other popular ski destinations. Submit a question, suggestion or comment.
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