Coinbase: An In-Depth Look at this ‘Bitcoin Bank’
Coinbase is probably the world’s most popular “bitcoin bank”— a place that allows you to store and exchange bitcoin. Here’s a detailed look at how it works.
What is Coinbase?
They offer two major services:
- First, it’s a digital currency exchange. It allows you to buy and sell bitcoin and some altcoins in exchange for fiat currencies.
- Second, it is a “bitcoin bank” where you can store digital currency. (In a more technical sense, it is a hosted bitcoin wallet.)
When were they established?
Founded in 2011, making it one of the older bitcoin exchanges still in existence. Alternatives like Kraken and GDAX were also founded in 2011, but other major bitcoin exchanges, such as Gemini, debuted only a few years ago.
Who owns Coinbase?
As an independent entity based in San Francisco, it has received investment from several venture capital firms, banks and other organizations, including Andreessen Horowitz, the New York Stock Exchange and Fidelity Investments.
Which coins do they support?
Currently users are allowed to buy and sell bitcoin, ether, litecoin and bitcoin cash. All of these currencies can also be stored in a Coinbase wallet.
Which countries do they support?
Investors in about two dozen countries, including the United States, Australia, Canada, Singapore and most of Europe, can access Coinbase. They can buy and sell bitcoin and altcoin using the local fiat currencies of these countries.
Are there fees?
Fees vary depending on your country and payment method. Users based in the United States can be charged a commission of 1.49% for trades using bank accounts and 3.99% for debit card trades.
How can you buy bitcoin on Coinbase?
To use Coinbase to buy bitcoin or other cryptocurrencies, follow these steps:
- Access Coinbase from a web browser or by using an iOS or Android mobile app.
- Set up an account.
- Buy bitcoin and other cryptocurrency using a payment method supported in your country. Bank accounts, debit cards or wire transfers in most countries. (Payment methods vary between countries.)
Since early 2018, Coinbase no longer supports bitcoin purchases using credit cards in the United States.
Which personal information do they collect?
When you sign up for an account, you’ll be required to submit personal information including a real name and mailing address.
Do you pay tax on Coinbase profits?
In 2018, Coinbase announced that it would report investment profits to the Internal Revenue Service for users based in the United States who had earned significant profits on the platform. They have not issued any significant statement on taxes for users based in other jurisdictions.
Banks.com offers the latest and greatest news on bitcoin and banks as well as a number of useful financial tools. If you’re interested in getting a deeper look at your finances, get your credit report today!