Here I’ll describe the buying process for when you are ready to buy your first Bitcoin. Don’t forget, by following the referral link above you’ll get about £7 ($10) of Bitcoin for free so long as you buy at least £80 worth.
Login and click on the Buy/Sell tab – you will then be asked to ‘complete your account’:
Click on the Add a Payment Method button. Next you will have to choose between adding a Bank Account or a Credit/Debit Card.
Choose Credit/Debit Card for now as its fast and easy. Later, if you want to buy larger amounts of cryptocurrency, you may want to add your bank account.
Fill in your debit card details as usual. Press Next.
Once you have a payment method set up, when you click on Buy/Sell you will see this screen:
Check that Buy and Bitcoin are selected (you can also buy Ethereum and Litecoin here – but they’re for another day). Your debit card should be showing as Payment Method.
On to the amount. This is up to you but I suggest £100 for your first purchase so you get the free £7 from Coinbase. Obviously if you’re keen you could buy a lot more, but as ever you shouldn’t risk more than you can afford to lose – bitcoin pricing is volatile.
Enter your amount in the £ box (symbol GBP) – your card will have a weekly limit on it (typically £500) and the green bar will show how much of this limit you are using. The limit for this week will go down by the amount you spend here but will then creep back up again day by day.
The BTC box will show how much Bitcoin (symbol BTC) your money will buy. In the screenshot Bitcoin was worth about £4176 so £100 buys 0.024 BTC (100/4176). In practice there are fees coming in so you get less than this.
[A quick detour into fees for those interested. The most obvious fee is that Coinbase charges about 4% on your purchase so you get £96 worth of Bitcoin. However, like at a foreign exchange desk you are also having to accept Coinbase’s view on what Bitcoin is actually worth at the moment you buy it which can be higher than the market rate. If you look closely in the screenshot you can see Coinbase is quoting slightly different BTC values in the Bitcoin box on the left and in the ‘You are buying’ box on the right’, plus this can be different from the live value shown in the main dashboard.]
Check you’re happy with the summary in the You Are Buying box and press the Buy Bitcoin Instantly button.
Coinbase will ask you to confirm and authorise the transaction:
Again check it then press the Confirm Buy button. Coinbase will tell you that it is confirming the transaction:
This screen will sit there and I’ve found it does no harm to click away from it, it won’t affect the transaction.
A short time later the Bitcoin will appear in your account. The subject of how Bitcoin is transferred and how long it will take is a big topic in its own right (essentially the speed depends on how large the fee is that Coinbase spends on the transaction). Suffice to say it should arrive within 10 minutes but may be much faster. If there’s a lot happening in the Bitcoin market (e.g. the price is changing fast and lots of people are buying and selling) then it could take longer.
Anyway, your dashboard will update to show that the transaction was successful and you now own some bitcoin:
The percentage figure just tells you how much of your ‘portfolio’ is in Bitcoin. Since you haven’t yet bought any other currency in Coinbase it will say 100%.
If you want to review a transaction in detail, such as your first purchase, you can click on it in the right hand column, for example:
It shows how much BTC you got (note, all cryptocurrencies are recorded to 8 decimal places, though not all decimal places are always shown), how you paid, the fee, etc. The Completed status shows that the transaction is confirmed, initially this may show Pending until it has fully gone through.
That’s it – you are now the proud owner of some Bitcoin! There will only ever be 21 million Bitcoin in existence so you own something that no-one else can own (that’s part of the reason why its value is trending upwards).
Further blog posts will cover how to securely store, lend and trade Bitcoin. Welcome to the crypto community!