Save on fees! Buying cryptocurrency using Coinbase(Pro)
A Very very short introduction….
Cryptocurrency might appear first like an idea conjured up for a science-fiction movie, but taking micro-steps to understanding it will provide liberation as to what money and value transfer really is. The first steps to understanding are the hardest because we have to totally transform the concept of money that has been forced upon us through lack of financial eduation as children and young adults. Just think of how scary it was transitioning from horse-drawn carts to mehcanical cars running on petroleum in the 1920s. Or the advent of the first domestic electrical lighting in the 1870s. Imagine someone telling you in the 15th century that they had an idea that would unify knowledge by mass production of printed paper (Printing press). All these ideas ‘at the time’ seemed risky, dangerous and not needed. Little did they (the average Joe) know that these ideas would transform society on levels only understood many years in into the future.
Being apprehensive is normal especially when we are dealing with cryptography, cyberspace and digital financial databases. However, if you do your own research you will see why cryptocurrency is a tour de force and an idea not to be ignored.
Over the past 3 years I have read a lot of material and listened to many discussions on the topic of cryptocurrency and its benefit for humanity. Since the benefits are extensive and require their own introduction, these will be discussed in a future post. I hope by now, you have developed a curiosity for learning more about cryptocurrency because I sincerely believe it is the single most important discovery of the 21th century.
If you would like to take the red pill, I recommend watching the linked video below. Saylor puts forward the case in succinct grace why cryptocurrency (Bitcoin specfically) will become the main treasury reserve asset for the world.
https://www.youtube.com/watch?v=V6J0hPCyN4Q&feature=share
For a short read: https://cointelegraph.com/news/bitcoin-is-the-best-treasury-reserve-asset-humanity-s-ever-had
So, cryptocurrency is not just a way to make payments anonymously to prevent the government from snooping on you, it is also seen as an investment vehicle (as in the case above) and a hedge against innevtiable monetary inflation.
Moving on…
In this post, I will guide you on how to buy your first cryptocurrency in the safest, most efficienct and cheapest way.
Before we get going, It’s important to note that cryptocurrency can purchased in smaller units. For example, you don’t need to buy a ‘full’ bitcoin, you can purchase a fraction of a bitcoin e.g. 0.00001 BTC (currently worth 18p). This is true for all cryptocurrencies.
Lets get you started.
Firstly, there are many exchanges where you can buy cryptocurrency (Binance, Kraken, Bitstamp etc) but Coinbase is the largest exchange in the UK. Larger exchanges tend to have higher security and better user-interfaces.
Step 1 — Download the Coinbase application onto your desktop or mobile phone.
Since most of you will probably be using a mobile phone, the application will come under the name ‘coinbase’ in the app store. For desktop users it is just www.coinbase.com (should see the below website).
Sign up for an account. It will prompt you to use a strong password (with numbers and symbols etc).
It will ask you to provide a phone number for two-step verification security. I find this very useful . In the event that somebody steals your account email and password, they won’t be able to do any harm without your phone at hand.
Because coinbase is under ‘Know You Customer’ (KYC) regulations, it also requires that you provide proof of identification (Driving liscence/Passport). This is normal in the crypto industry and tends to be safer for customers.
Step 2 — Verify your account with identification — this might take up to 24 hours so please be patient.
Step 3 — Retrieve bank deposit reference number.
To do this, go to ‘Portfolio’. Click on ‘British Pound’ and then ‘Deposit’. You will be prompted with a reference number and bank name and details of where you will send the money to. Write these down.
Note: You must use the reference number for the money to be transferred successfully!
I recommend doing a small transfer initially, say £2.00. This is just to test that you have the correct bank details and reference number.
Once you have confirmed that the bank transfer works, send the amount you want to convert.
Step 4 — Buying the cryptocurrency (part 1)
At last, we are here.
The trick that nobody tells you and one that is a costly lesson to learn is that you can purcahse cryptocurrency for 80% reduced fees on Coinbase’s ‘Pro’ platform. I have saved £100s worth of fees doing this, and now you know, you will too.
Head over to coinbasepro.com, or download the coinbasePro mobile application.
What we are doing here is transferring the pounds from coinbase wallet to the coinbasePro wallet.
Sign in using the same login details as coinbase. You will need to verify your account using your mobile number.
You should greeted with a complex looking website (The mobile app is much simpler):
Now go to portfolio (This is the small pie looking thing at the bottom of the screen in the mobile version — second button accross). Click ‘British Pound’ and select deposit.
Click ‘GDP’ . Go to ‘Deposit’ and select from ‘Coinbase.com’. Click ‘Max’ if you want to transfer all funds or type in the amount you want to send and confirm.
In a few minutes you will be able to purchase some crypto. This might take a few minutes to transfer.
These steps might feel burdensome but it will become quicker over time and it is saving you a lot of money. For example coinbase can charge £30 to purchase 500 GBP of bitcoin, whereas coinbasePro only charges you £2.
Boom — now you have pounds in your coinbasePro account to spend. Congrats!
Step 4 — Buying the cryptocurrency (part 2)
Now, which currency do we buy? It might seem the best option to purchase bitcoin, but this is not necessarily the case. Bitcoin is seen as king of the cryptos because it’s been around the longest and has the largest following. This does make it extremely resilient and safe, but it doesn’t make it the fastest. In fact, bitcoin is relatively slow compared to other cryptocurrencies. But in cryptocurrency there is tradeoff between network safety and speed. This is a complex topic and really needs its own post (which I may include in future), but put simply if you’re planning on using the cryptocurrency straight away (e.g. for puchasing products), then I reccommend transacting with litecoin. The transaction is very fast and will cost you a smaller fee than bitcoin.
To purchase using the mobile app: go to the first page and either look for the GBP-BTC (bitcoin) pair or the GBP-LTC (litecoin) pair depending on which one you prefer. Click the buy button and select how much you want to buy. This will then put an order in and you will see the crypto in your portfolio.
To purchase using the coinbasePro website, go to ‘Trade’ in the top left corner. Click ‘select market’ and chose the GBP- pair (e.g. GBP-LTC). Now select how much you want to spend. Confirm.
The end. Lol, just kidding.
Now you have a cryptocurrency wallet with cryptocurrency in it, you can send it or recieve it anonymously (Kinda the whole point of crypto, self -sovereignty and all that malarky). Now nobody can snoop on your financial transactions.
Part 5 — Sending cryptocurrency (Optional)
If you want to send this crypto to somebody, click withdraw and simpy paste in their crypto address. It’s important to note that the address you paste in needs to be a ‘litecoin’ address or a ‘bitcoin’ address, you cannot mix them up or the crypto will be lost forever. Normally, it does tell you if the address is compatible so you should be safe.
If you want to recieve cryptocurrency, click on the currency you want to receive and go to ‘deposit’ > crypto address and copy that address out to the person that is going to pay you.
And volla, you are now using cryptocurrency in the safest, most-efficient and cheapest way!
Thanks for checking this post out and welcome to the rabbit hole.
If you’re keen on learning more about cryptocurrency, I reccommend the following article:
https://hackernoon.com/6-resources-that-will-make-you-crypto-fluent-dcba3365c25
A small book called ‘The internet of money’ and a larger book called: ‘The Bitcoin Standard’
I am not a financial advisor. This is not financial advice. Please do your own research.
