Bitcoin exploded onto the world stage in a dramatic fashion in late 2017 and early 2018 making many people millionaires within a matter of months.
This has led to a much greater awareness of bitcoin and to many new investors who want to know how best to buy bitcoin. Bitcoin pulled back from its all-time highs set at the start of 2018, but has gone on a renewed run in 2020 – 2021 to set new all time highs.
This being the case, many bitcoin investors are taking advantage of current prices, in anticipation of a renewed bull run later in the near future. With new bitcoin exchange platforms appearing online almost daily, there is no shortage of ways to buy bitcoin.
Sadly, not all cryptocurrency exchanges are as reputable and safe as others. This is why anyone new to cryptocurrency, would be wise to buy tokens at Coinbase, especially when dealing with high-value coins like Bitcoin.
Why Buy Bitcoin on Coinbase
- Coinbase is the largest Bitcoin exchange online, having 10 million users who have traded over $50 billion in digital currency since 2012
- High-trust, solid security, terrific reputation and user-friendliness make Coinbase the easiest and safest Bitcoin exchange for people who are new to buying bitcoin
- The bitcoins you keep on Coinbase are insured against hacking and, in the US, are FDIC insured as well
- Coinbase is currently attempting to reach even more cryptocurrency investors by applying for a full brokerage firm license
For people who are new to the Bitcoin, Coinbase is by far the best choice as it is the safest exchange on which to keep your bitcoin, is very user and newbie-friendly, has competitive transaction fees and multiple payment options.
When buying bitcoin on Coinbase, you don’t need to create a separate wallet to store the bitcoins as Coinbase has excellent security and even insures your bitcoins. If you want more details, we have elaborated on why Coinbase is one of the best bitcoin exchanges.
In addition, Coinbase also allows you to purchase Ethereum, Litecoin and Bitcoin Cash.
This guide will show you step-by-step exactly how to get set up on Coinbase and to safely and securely buy and store your bitcoins.
How to Buy Bitcoin Safely & Easily on Coinbase
Ok, let’s get down to business and get you your bitcoins!
1. Gather Items – What New Coinbase Users Need to Buy Bitcoin
In order to buy bitcoin at Coinbase, you will need:
- A copy of your government issued photo ID
- Bank account information (or login credentials) or a valid debit card
- Optional: A bitcoin wallet (if you are not sure what this is, don’t worry for now and this will be addressed again at the end here)
If you verify your information you are allowed unlimited investing and if you verify your photo ID then you can also send and receive the digital currencies supported on Coinbase.
2. Opening Your Coinbase Account
- Create Your Account at Coinbase
Important: What new users do need to remember when signing up to Coinbase, is that names on ID documents and bank or credit card details need to match exactly. So make sure you enter your details here as they appear on your ID.
For non-business users, signing up to Coinbase is very easy. Users simply fill in the fields that are required to open an account and verify their identity by uploading a copy of their ID documents.
After signing up you will need to verify your email address, which you can do within the email that Coinbase will send you after you click “sign up”.
3. Verifying Your Identity
You will be prompted to upload a photo or use your webcam to take a photo of your ID or passport and a picture of yourself. Then, your identity will be confirmed within a couple minutes.
4. Connecting & Verifying Your Bank Details or Credit Card
After successfully opening a Coinbase account, users will need to verify their payment details. Coinbase will automatically prompt you to do this.
There are two ways to confirm a bank account and you will be given option A first.
Option A – Immediate Confirmation: Depending on which bank you use, you may have the option to confirm it immediately by providing Coinbase with temporary access to your online banking platform.
Option B – Small Deposits Into Your Account: If your bank is not supported for immediate verification or you wish to use a credit card instead, Coinbase will initiate two small transactions which will appear on your credit card or bank account statements.
Once this transaction has taken place, then go back to Coinbase and Select “Linked Accounts”. Here you can enter the amounts that they deposited into your account. After doing so your bank account will be confirmed
5. Enable Two Factor Authentication
This is not required but we recommend it as an added layer of protection for your bitcoin. Go to Settings >> Security and follow the prompts to enable this security.
We recommend using the Google Authenticator app (available in both Android and iOS) as the most secure option.
6. Buy Bitcoin (or another Cryptocurrency) on Coinbase
Now for the fun part, it’s time to buy Bitcoin (or Ethereum, Litecoin or Bitcoin cash)!
Once your new Coinbase account has been fully verified, you can buy bitcoin by clicking the “Buy/Sell” tab the top of your main account page. Then, follow the steps below.
1) Select from Bitcoin, Litecoin, Bitcoin Cash, or Ethereum
2) Choose your payment method
3) Enter the amount you wish to purchased
4) Optionally, you can select to automatically repeat this purchase daily, weekly, every other week or monthly. This approach is called dollar cost averaging and, since the bitcoin price fluctuates, helps to average out over time the bitcoin price you pay.
7. Confirming Your First Bitcoin Purchase
After filling out these details, a buy order will appear showing you the total transaction cost inclusive of Coinbase fees.
Once you click the buy button, the sale will take place and Bitcoin (or whatever cryptocurrency is being purchased) will immediately be credited to into your Coinbase wallet.
You are now the proud owner of cryptocurrency! Congratulations!
8. Trading & Storing Coins Safely
Bitcoins are kept in something called a wallet, which is essentially just a place that stores the private and public keys to your bitcoin, in other words a couple strings of letters and numbers that represent and give you access to your bitcoin.
Because Coinbase allows users to store digital currency on its own platform, you don’t necessarily need your own Bitcoin wallet.
People will often recommend that you do not keep your bitcoin on an exchange due to the fact that some exchanges have gotten hacked. However, Coinbase is often considered an exception because of the excessive security measures it takes.
Coinbase insures your cryptocurrency holdings that you keep on their exchange and, for US investors, your account is even FDIC insured up to $250,000! Coinbase is the only exchange to currently offer this level of protection.
However, there are pros and cons to storing your bitcoins on a bitcoin exchange. The safest way to store cryptocurrency is usually considered to be hardware wallets such as the Ledger Nano S or Keepkey.
Be careful when setting up a bitcoin wallet as many are not secure. If you are looking to store your coins off of Coinbase, we recommend you use one of the best bitcoin wallets available.
Also, it is useful to be aware that Coinbase also runs a platform called GDAX.com, which is basically the same thing as Coinbase but for more advanced users. However, learning to use this platform can help you save significantly on transaction and transfer fees.
If at some point you decide you want to invest in other altcoins (cryptocurrencies besides bitcoin) that are not supported on Coinbase, you will need to either transfer bitcoin from your Coinbase account, or set up a new account at exchanges like Binance or Gate.io.
Welcome to share your experiences on buying your first bitcoin on the comment section. All the best!