Selecting a cryptocurrency exchange for buying and selling digital tokens can be an overwhelming task for crypto enthusiasts, as there are a vast number of exchanges available today. In this Coinbase Exchange tutorial, you will learn how to use the platform, understand key trading features, manage fees, and learn about the measures taken to ensure the safety of your assets. This tutorial breaks down complex concepts, such as staking digital tokens on the platform, into simple steps, making it easier for everyone to use the platform.

So, let’s begin this Coinbase Exchange tutorial.

Understanding Coinbase

Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase is one of the earliest cryptocurrency exchanges, enabling crypto users to trade digital tokens, including Bitcoin (BTC), Ethereum (ETH), stablecoins, and more. It is a U.S.-based, centralized platform trusted by millions of users in over 100 countries. The platform aims to provide financial freedom to everyone through cryptocurrencies by simplifying access and empowering individuals to take control of their financial future.

Coinbase provides a user-friendly interface, making it easy for everyone to buy and sell digital tokens. The platform offers a wealth of educational resources, including articles, videos, and tutorials, to help crypto users navigate the complex cryptocurrency space with ease. It implements a wide range of robust security features to ensure your funds are safe on the platform.

According to the current market statistics, Coinbase offers more than 290 digital tokens and over 400 trading pairs. You can start Spot and Futures trading on the platform with advanced trading tools. Moreover, the platform offers you several ways to generate passive income through staking cryptocurrencies and earning rewards.

When it comes to compliance, Coinbase stands out in the industry, leading the way in building a regulated and responsible future for crypto. The platform supports procedures like Know Your Customer (KYC) to ensure a secure and compliant environment for all users. It became the first cryptocurrency exchange to obtain the Bit License from the New York State Department of Financial Services, establishing trust among crypto users.

Some of the key features of the platform include:

• Coinbase is a centralized cryptocurrency exchange where you can buy, sell, and stake cryptocurrencies.
• The platform is popular for its regulatory compliance, ensuring a safe and legitimate environment for all crypto users.
• A wide range of cryptocurrencies is offered on the platform, making it easy for everyone to trade their favorite tokens.
• You can stake cryptocurrencies on the exchange to earn extra income.
• Coinbase utilizes advanced security measures, such as 2FA and cold storage for funds, to ensure a secure trading environment.   

How to Get Started with Coinbase?

Crypto users can easily create an account on the Coinbase Exchange and start buying and selling digital tokens.

You need to follow the following steps:

1. Visit the website

Visit the Coinbase website and click on Sign Up on the homepage.

2. Select the account type

Next, select the account type: Personal, Business, or Developer. In this case, a Personal account is selected.

3. Provide the email 

Enter your email address to start the signing process on Coinbase. The platform also enables you to sign up with your Google and Apple IDs.

4. Enter the verification code

Provide the 6-digit verification code that you received at your email address.

5. Create a password

After providing the verification code, create a strong password based on upper and lowercase letters, numbers, and symbols. Once done, click on Continue.

6. Enter the name

Next, enter your first and last name, and click on Continue.

7. Verify your phone number

Enter your mobile number to receive a verification code and click on Continue.

8. Complete the puzzle

The system will then ask you to start the puzzle to secure your account. For this, click on the “Start Puzzle” tab.

9. Enter the code

After completing the puzzle, enter the 6-digit code that you received on your mobile phone number.

After providing the code, you need to provide your personal information, such as your country name and place of birth, to proceed with the KYC process, which we will walk through step by step in the upcoming section.

Know Your Customer (KYC) on Coinbase

Coinbase is a centralized cryptocurrency exchange that requires users to complete the Know Your Customer (KYC) procedure. The process is crucial in protecting the platform from any illegal activity, such as terrorism financing and illicit fund transfers.

After completing the account creation procedure on the platform, you are directed to the KYC procedure.

You need to follow the following steps to complete this procedure:

1. Select the ID type

Select the ID type that you want to use for the KYC procedure between the Driver’s License and the Identity Card.

2. Provide the document

Next, provide the front image and back image of the document for verification.

The system will then verify the identity document and send you a verification email if the KYC procedure is successful. Otherwise, you can restart the procedure.  

Setting Up 2FA on Coinbase

Coinbase is an advanced cryptocurrency exchange that offers robust security with the mandatory integration of Google 2FA Authentication. It ensures enhanced safety for your digital assets and makes them impenetrable.

To set up 2FA for your account:

• Go to the profile icon on the top right corner of the homepage and click on Settings from the drop-down menu.

• On the Settings page, click on Security.

• Click on Select beyond Authenticator in the “Other Options” section.

• Enter the two-step verification code that Coinbase sent to your mobile phone number and click on Confirm.

• Download the Google Two-Factor Authentication app on your mobile device, link it with your account, enter the 6-digit verification code from the app, and click on Enable to complete the procedure.

How to Make a Deposit on Coinbase?

Coinbase enables its users to make cryptocurrency deposits on the platform through a straightforward process.

To make a deposit, you need to follow these steps.

1. Visit the homepage

Visit the Coinbase homepage and click on the “Send & Receive” tab at the top of the menu bar.

2. Add the deposit details

Next:

• Click on Receive in the pop-up window.
• Select the cryptocurrency you want to deposit, for example, Bitcoin (BTC).
• Copy the deposit address and paste it into the wallet that you are using to send Bitcoin.
• Otherwise, you can also scan the QR code.
• Once the deposit is confirmed, you can see the receiving assets under the “My Assets” section.

How to Buy Cryptocurrency with Fiat on Coinbase?

Coinbase supports purchasing cryptocurrency with fiat currencies. The platform accepts multiple fiat currencies, including the US Dollar (USD), Euro (EUR), and British Pound Sterling (GBP). Users can select any of these fiat currencies and choose from over 60 available payment methods to buy digital tokens. Some of the popular supported payment methods include Bank Transfers, Debit Card, Wire Transfer, SEPA, Apple Pay, and PayPal.

To buy cryptocurrencies with fiat currencies on the platform:

1. Navigate to the Buy & Sell tab

On the Coinbase homepage, click on the “Buy & Sell” tab.

1. Add the order details

Next:

• Click on Buy in the pop-up window.
• Select the cryptocurrency you want to buy, for example, Bitcoin (BTC).
• Select the payment method you want to use.
• Enter the order amount.
• Review the details and click on Buy Bitcoin to complete the transaction.

Supported Cryptocurrencies on Coinbase

Coinbase is a cryptocurrency exchange designed for the enhanced convenience of crypto traders. The platform offers access to over 290 digital tokens that are available for purchase and sale. Some of the popular available tokens include Bitcoin (BTC), Ethereum (ETH), Tether (USDT), XRP, Solana (SOL), and more.

Coinbase complies with local laws and crypto regulations to create a safe trading environment for everyone. Therefore, certain digital currencies, such as XMR, are not supported by the platform across several jurisdictions. However, the platform supports a wide range of cryptocurrencies, including popular tokens that can be easily traded.

How to Trade Cryptocurrencies on Coinbase?

At Coinbase, you can choose between two trading options based on your experience level. Basic Trading is ideal for beginners, as it enables the simple buying and selling of digital tokens. You can access it on the platform’s homepage and start buying and selling cryptocurrencies. On the other hand, Advanced Trading offers Spot and Futures trading options to professional traders. It provides tools like candlestick charts, technical indicators, and order types to analyze both Spot and Futures markets.

Before getting familiar with Spot or Futures trading on Coinbase, you need to understand the different order types provided on the platform.

Order Types on Coinbase

Coinbase offers the following order types to its users:

1. Limit Order
   Traders can use this order type to buy or sell a digital currency at a specific price.
   Example: A trader places a buy-limit order to purchase one Bitcoin (BTC) at $100,000. The order will execute once the price of BTC reaches the target price.
2. Market Order
   Traders can use a market order to buy or sell a cryptocurrency at the current market price.
   Example: A trader places a market-buy order to purchase one Bitcoin (BTC) at the current market price, suppose $100,000. Once the order is placed, it is executed immediately.
3. Stop Limit Order
   It is a conditional order that traders can use to achieve a specific stop price. It allows them to set both a trigger price and a limit price at which the order will execute.
   Example: A trader sets a stop-limit order to sell one Bitcoin (BTC) at a stop price of $95,000 and a limit price of $94,500. If the price of BTC drops to $95,000, the limit order is triggered and will execute if the price stays at or above $94,500.
4. Bracket Order
   Traders can use this order type to manage risk by setting the target exit price.
   Example: A trader buys one Bitcoin (BTC) at $100,000 using a bracket order and sets a taker-profit target at $102,000 and a stop-loss target at $99,500. If the price of BTC reaches $102,000, a sell order will execute to secure profits, but if the price drops to $99,500, a sell order will execute to limit losses.

How to Start Spot Trading on Coinbase?

Coinbase allows its users to trade a wide range of digital tokens across its Spot market. You can trade popular cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

To start Spot trading on Coinbase, you need to follow these steps:

1. Visit the homepage

Visit the Coinbase homepage, click on the “Individuals” tab, and then click on Advanced from the drop-down menu. It will take you to the trading interface.

2. Getting familiar with the interface

The Spot trading interface offers the following features:

• Select the trading pair in the top left corner of the interface, for example, BTC/USDT.
• The chart price section shows important information, including the current price and change in the trading volume.
• The trading chart is powered by advanced trading tools that you can use according to your trading strategy.
• The order book in the middle shows the current buying and selling prices of the selected trading pair.
• Trade history shows the currently placed trades on the platform.
• You have the order panel on the right side of the interface, where you can place a trade.
• The positions tab is on the bottom left side of the interface, where you can view a position.

3. Place a trade

To buy Bitcoin:

• Click on Buy in the order panel.
• Select an order type, for example, Limit.
• Enter the order amount.
• Review the order details and click on Buy BTC.

To sell a digital token:

• Select a trading pair in the top left corner of the interface, for example, SOL/BTC.  
• Click on Sell in the order panel.
• Select the order type, such as a Limit order.
• Enter the order amount.
• Review the order details and click on Sell SOL.

How to Start Futures Trading on Coinbase?

Coinbase enables professional traders to increase their profits by offering up to 20x leverage on perpetual contracts trading.

To start Futures trading on the platform, you need to follow these steps:

1. Visit the homepage

Navigate to the Individuals tab on the homepage and select Advanced from the drop-down menu.

2. Getting familiar with the trading interface

On the trading interface, click on Futures on the right side of the menu bar.

The trading interface offers the following features:

• You can select the trading pair in the top left corner of the interface, for example, BTC/USDT perpetual.
• You can view the current price and change in the trading volume of the selected token, along with other information in the chart price section at the top of the interface.
• The trading chart comes with advanced tools and indicators that you can use according to your trading strategies.
• The order book displays current buying and selling prices of a cryptocurrency, and the order history shows the current traded price of the digital asset.
• The order panel is on the right side of the interface, where you can place a trade.
• The position tab is at the bottom left of the interface, where you can view the details of a trade.

3. Place a trade

Go to the order panel and place a trade.

To open a long position:

• Click on Buy/Long.
• Select the order type. In this case, a Limit order is selected.

• Select the margin mode between cross and isolated. Cross margin is used to allocate the collateral to all open positions, while isolated margin allocates the whole collateral to a single position.

• Select the leverage, and you can select up to 20x leverage. Remember, a higher leverage poses a bigger risk. So, you need to be careful with selecting the leverage.

• After this, enter the order details such as the order amount.
• Review the details and click on Preview Buy Order.
• A pop-up window will appear where you can confirm the order details.

Now, to open a short position:

• Click on Sell/Short.
• Select the order type, for example, Market order.
• Enter the order amount.
• Review the details and click on Preview Sell Order.
• A pop-up window will appear where you can confirm the order details.

4. Visit the positions tab

Once you open a position, you can view it under the positions tab. If you want to close a position, click on Cancel All.

How to Stake Cryptocurrencies on Coinbase?

Coinbase enables its users to stake cryptocurrencies on the platform and earn extra income. The platform offers up to 14% Annual Percentage Yield (APY) on certain contracts. You can stake your idle digital tokens on the platform and start earning anytime.

To start staking digital tokens on the platform:

1. Visit the homepage

Navigate to the Individuals tab on the homepage and click Earn from the drop-down menu.

2. Select the digital token

Select a digital token to stake, for example, Ethereum (ETH).

3. Start staking

Click on Continue in the pop-up window.

4.      Enter the staking amount

Enter the staking amount for Ethereum or click Stake All to stake all tokens. Review the details and click on Preview Stake.

5. Confirm the amount

Confirm the amount and click on Stake Now.

6. Confirm staking

Click on Done to start staking the digital token.

How to Make a Withdrawal from Coinbase?

Coinbase allows its users to withdraw funds through a simple process. You can withdraw funds from the exchange to an external wallet by following these steps:

• Navigate to the Trading tab.
• Click on Withdraw under the wallet balance.
• Search for the cryptocurrency you want to withdraw.
• Select the withdrawal method.
• Enter the external wallet address. Make sure you select the same currency and withdrawal network in the external wallet. If you do not choose the same currency and the withdrawal network, you can lose funds to the wrong network.
• Enter the withdrawal amount.
• A pop-up window will appear where you need to enter the 2FA verification code to complete the withdrawal.

Coinbase Security

Coinbase is a U.S.-based publicly traded company that uses robust security measures to ensure a secure trading environment for everyone. The platform has implemented several security measures, including a KYC procedure and 2FA authentication, to minimize the risk of fraud and unauthorized access to funds. In addition, all passwords on the platform are encrypted in its database, ensuring maximum security.

The platform secures your sensitive information like account details by using AES-256 encryption. It ensures that even if the data were intercepted, it would be unreadable without the proper keys. You can secure withdrawals from the platform by using the Coinbase Vault. The platform utilizes a 1:1 reserves system to ensure all funds are fully backed. It also ensures that funds cannot be withdrawn without your approval, adding an extra layer of security to your funds. Moreover, 98% of funds on the Coinbase Exchange are stored in air-gapped cold wallets with multi-signature security protocols.

Coinbase also runs a bug bounty program through HackerOne. It enables researchers to identify and report vulnerabilities for maximum safety. The platform offers address whitelisting, which allows you to restrict withdrawals only to pre-approved addresses. It supports biometric logins and passkeys, reducing the vulnerability of unauthorized access to accounts.

Trading Fees on Coinbase

Coinbase follows a competitive fee structure for the enhanced convenience of crypto traders. The platform charges a maker and taker fee based on the 30-day cumulative trading volume.    

The platform charges a basic maker fee ranging from 0.00% to 0.4%, and a basic taker fee ranging from 0.05% to 0.6%.

The following trading fees are charged on Coinbase Advanced:

The term “bps” stands for basis points. On Coinbase, one bps is equivalent to 0.01%, meaning 100 basis points equals 1%, and one basis point equals 0.0001%. For example, a 60bps taker fee means 0.60% of the trade value is charged as a fee.

Key Takeaways

Coinbase is a popular U.S.-based cryptocurrency exchange where you can easily buy or sell cryptocurrencies. The platform enables its users to make deposits and withdrawals through simple steps. It supports a wide range of digital tokens that you can buy, sell, or stake on the platform.

The Coinbase Exchange offers basic buying and selling functionality for digital tokens to beginners. On the other hand, it provides advanced trading tools and order types to meet the trading needs of professional traders.

Coinbase offers users maximum benefits by enabling them to generate passive income on the platform through staking their digital assets. The cryptocurrency exchange utilizes several safety features to ensure you have a safe trading environment. Additionally, its customer support is always available to help you navigate the complex cryptocurrency space with ease.

Frequently Asked Questions (FAQs)