Category Archives: Coinbase

Buy the Bitcoin Dip Part 2 – And How to Save on Coinbase Fees

I was right about the Bitcoin Dip – and have made a tidy profit. I bought half a Bitcoin at £5500.

Of course, it should have cost me £2750 but I bought it through Coinbase with my debit card which is a pricey, though convenient, way to do it. Coinbase charged me 4%, so about £110, making the total £2850.

Bitcoin was been rising in value since as I predicted, though in its usual erratic way. I had intended to take my money out when it passed £8000 and, as I watched it last night, it did just that.

I was hesitant to sell it directly through Coinbase again because of its fees. However, I had come across some advice about selling through Coinbase’s exchange, GDAX, instead at lower fees. Here’s an example video from the excellent Coin Mastery:

I followed the advice and it worked like a charm.

GDAX Exchange Trading Screen (Image: BIUK)
GDAX Exchange Trading Screen (Image: BIUK)

This is the process if you want to save a stack on Coinbase fees:

  1. Create a GDAX account if you don’t already have one (I already did).
  2. Transfer the Bitcoin to GDAX – on GDAX click the DEPOSIT button, then in the form choose your Coinbase Account -> BTC Wallet and set the amount. Click Deposit Funds. It will appear almost immediately on GDAX and there is no charge.
  3. Select LIMIT then SELL, then set the amount. Here you need to be a bit careful and set the correct price you are prepared to sell at (double check it, because if you set it low it will sell low). At the time Bitcoin was selling for about £8010. I wanted to make sure that, if there were fees, I would clear £4000 on my 0.5 BTC so I set the value to £8050.
  4. Since the price is volatile your price will likely be hit very quickly so long as you didn’t set it too high (mine too less than a minute).
  5. The BTC sells, the money appears in your GDAX wallet – and there’s no fee!
  6. Transfer the money back to Coinbase using the WITHDRAW button, set the amount and the destination (e.g. GBP Wallet) and click WITHDRAW FUNDS. It goes back to Coinbase – no charge.

So I have proved to my own satisfaction you can sell BTC, i.e. convert it to pounds sterling, for no charge this way – and at a price slightly higher than the current market rate

Note that selling Bitcoin is called a ‘Maker’ transaction since you are putting Bitcoin into the market. Note that moving in the opposite direction has a ‘Taker’ fee of 0.25%, still not a bad deal.

I sold my 0.5BTC at £8050 so I received £4025, and that’s all now sitting in my Coinbase account.

Since I only paid £2870 for the Bitcoin less than a month ago (a profit of about £1100), I’m rather pleased with that.

 

 

Coinbase Introduces PayPal-like Commerce Button That Could Change the Game

Have you ever gone to purchase something on an e-commerce website like eBay (NASDAQ:EBAY) and found the option to pay via the PayPal (NASDAQ:PYPL) commerce button? Well now, Coinbase has rolled out a commerce platform that might be extremely appealing to merchants. This allows merchants to seamlessly integrate cryptocurrency payments into their current platforms. Currently, Coinbase offers payments for Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC).

Coinbase Dashboard (Image: Bitcoin Investors UK)
Coinbase Dashboard (Image: Bitcoin Investors UK)

Making it more convenient for cryptocurrency holders to make everyday purchases is a smart move by Coinbase. For now, this new service is not open to new signups by companies. However, on the website it states that major companies are already signed up and have used this new feature. It’s unclear if they have just tested a Beta phase of this product, but the companies listed include Overstock (NASDAQ:OSTK), Expedia (NASDAQ:EXPE), and Digital River. On Coinbase’s website it says that currently, 48,000 businesses trust the platform to integrate Bitcoin payments. It remains unknown if these other companies such as Dish, USAA, Reddit, and 1800 Flowers, are testing this commerce button as well.

Read more: CryptocurrencyNews

How to Send Bitcoin to a Wallet

Online Platforms and Wallets

Once you’ve bought Bitcoin on a cryptocurrency exchange or other online platform it is advisable to transfer it to your own wallet.

If the currency has low value then you could take a chance and leave it online, but there are three risks to be aware of:

  1. The exchange could collapse (it has happened before, e.g. Mt Gox).
  2. You can’t get  access to your currency as fast as you need it (e.g. to sell in a falling market). Currently Poloniex can take 24 hours for a withdrawal to go through, Bitfinex 12 hours.
  3. The exchange gets hacked and a third party withdraws your Bitcoin.

Here we’ll cover the process of moving your Bitcoin from an online platform to your own wallet. It will be similar on most platforms and wallets – here we’ll assume:

Bitcoin has been purchased on Coinbase and is sitting in your Coinbase account as described in How to Buy Your First Bitcoin on Coinbase.

You want to move it to your personal Electrum wallet, created as described in How to Make a Bitcoin Wallet.

Receiving in Electrum

Start Electrum and select File -> Open and choose the wallet you created previously. Enter the password you recorded at the time:

Electrum Password Screen (Image: Bitcoin Investors UK)
Electrum Password Screen (Image: Bitcoin Investors UK)

Electrum will open the wallet and the History tab will show all transactions so far – none in this case:

Electrum Wallet Screen (Image: Bitcoin Investors UK)
Electrum Wallet Screen (Image: Bitcoin Investors UK)

Each wallet owns a series of Bitcoin addresses where coins can be deposited. Select the Receive tab to show the first address available in your wallet, listed as Receiving Address.

[A quick detour into addresses: Note the subject of addresses is quite a complex one that we don’t need to go into here – just be aware that most wallets will manage a series of addresses for you. For example, many wallets will use a different address for every transaction for enhanced security. Also, since a sending address may contain more Bitcoin than is sent from it the ‘change’ may get sent to a third address. You don’t need to worry about this, you just rely on using the addresses the wallet suggests. If you want to see the addresses that are being managed ‘under the bonnet’ have a look at the Addresses tab to see the various Receiving and Change addresses handled by your wallet.]

Electrum Receive screen (Image: Bitcoin Investors UK)
Electrum Receive screen (Image: Bitcoin Investors UK)

Copy this address to the clipboard: you can either select it and copy or click on the Copy icon at its right-hand end. Enter a Description, e.g. ‘Initial transfer from Coinbase‘. With that done we are ready to receive Bitcoin to the copied address in this wallet.

Note that the sending platform  is in control of the transaction, Coinbase in our example. It doesn’t matter how much Bitcoin you want to receive, you’ll only receive what is sent – so the other items here (e.g. Request amount) are irrelevant for our purpose. By all means click Save to record your description of this transaction, but otherwise it isn’t necessary.

Electrum Receive screen after saving (Image: Bitcoin Investors UK)
Electrum Receive screen after saving (Image: Bitcoin Investors UK)

Sending from Coinbase

Go to Coinbase and login to your account. Click on Accounts. This should show the Bitcoin you bought previously.

Coinbase Accounts screen (Image: Bitcoin Investors UK)
Coinbase Accounts screen (Image: Bitcoin Investors UK)

Click on the Send button under BTC Wallet. to bring up the Send BTC screen. On the day I wrote this it had a message about delays in sending Bitcoin – you may or may not get that.

Paste the address copied from your Electrum wallet into the Recipient box. Check that Withdraw From shows the BTC Wallet. Under Amount click in the BTC box – this will bring up a Send Max button. Click on this to transfer out all your Bitcoin in this account (the fee is shown at the bottom). Add a Note such as ‘Transfer to my Electrum wallet‘. Press Continue.

Coinbase Send BTC screen (Image: Bitcoin Investors.co.uk)
Coinbase Send BTC screen (Image: Bitcoin Investors.co.uk)

Next you’ll see a Confirm Send screen. Check that all the fields are correct. You may need to enter an SMS code depending on your account settings.

Coinbase Confirm Send screen (Image: Bitcoin Investors UK)
Coinbase Confirm Send screen (Image: Bitcoin Investors UK)

Press Confirm. You should then get a brief confirmation message saying the transaction is going through. Go back to the Dashboard and you should see the transaction is listed under Recent Activity as Pending.

Coinbase Send Pending (Image: Bitcoin Investors UK)
Coinbase Send Pending (Image: Bitcoin Investors UK)

Transaction Confirmation

Now you have to wait. You may get an email confirmation from Coinbase that it is going through.

A transfer can take from minutes to hours depending on how busy the network is and how much Coinbase spent on fees to transfer the money (they probably default to a low fee). A transaction has to be confirmed by a number of different nodes on the blockchain and these transactions will come through one by one. If you click on the transaction in the Coinbase you can see how many Confirmations have gone through.

The first sign that the transfer is definitely happening may be seen in Electrum on the History tab. With luck this will show the transaction as it is confirmed, with the Description that you entered above and saved.

Electrum History screen (Image: Bitcoin Investors UK)
Electrum History screen (Image: Bitcoin Investors UK)

If you double-click on the transaction you can see the confirmations counting up.

Electrum Transaction detail (Image: Bitcoin Investors UK)
Electrum Transaction detail (Image: Bitcoin Investors UK)

As the confirmations come in the ‘Unconfirmed’ message changes to a clock face that fills in segments and goes from red to green.

Electrum Transaction Being Confirmed (Image: Bitcoin Investors UK)
Electrum Transaction Being Confirmed (Image: Bitcoin Investors UK)

When the transaction is complete it will show a green tick (you can see the details on the Addresses and Coins tabs and by double-clicking the transaction line):

Electrum Transaction Complete (Image: Bitcoin Investors UK)
Electrum Transaction Complete (Image: Bitcoin Investors UK)

It will also be shown in Coinbase as no longer pending (and if you double-click it there under Recent Activity it will be marked Completed).

It’s done. Your Bitcoin has been successfully transferred from your Coinbase account to your private Electrum Wallet. There it can only be transferred out using your private seed or password, otherwise there is no way for anyone to access it.

How to Buy Your First Bitcoin on Coinbase

Go to Coinbase.com and open an account as described in How to Open a Coinbase Account.

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’:

Coinbase: Add a Payment Method (Image: Bitcoin Investors UK)
Coinbase: Add a Payment Method (Image: Bitcoin Investors UK)

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 the Payment Method (Image: Bitcoin Investors UK)
Choose the Payment Method (Image: Bitcoin Investors UK)

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.

Add a Debit Card (Image: Bitcoin Investors UK)
Add a Debit Card (Image: Bitcoin Investors UK)

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:

Coinbase Buy/Sell (Image: Bitcoin Investors UK)
Coinbase Buy/Sell (Image: Bitcoin Investors UK)

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:

Coinbase Authorize Transaction (Image: Bitcoin Investors UK)
Coinbase Authorize Transaction (Image: Bitcoin Investors UK)

Again check it then press the Confirm Buy button. Coinbase will tell you that it is confirming the transaction:

Buy confirmation (Image: Bitcoin Investors UK)
Buy confirmation (Image: Bitcoin Investors UK)

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:

Dashboard - success (Image: Bitcoin Investors UK)
Dashboard – success (Image: Bitcoin Investors UK)

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:

Review Coinbase Transaction (Image: Bitcoin Investors UK)
Review Coinbase Transaction (Image: Bitcoin Investors UK)

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!

How to Open a Coinbase Account to Buy Bitcoin

This is an introduction to buying Bitcoin for those new to cryptocurrencies in general and to Bitcoin in particular. The first step is to open a ‘wallet’ – a software app or website – to hold your cryptocurrency.

Here I’ll show you how to do this in Coinbase. This claims to be “the world’s most popular Bitcoin wallet” and is certainly very well known. As well as being popular it is also very easy to use. It is not the cheapest nor the most fully featured wallet and so we’ll look at other wallets later for those more experienced with cryptocurrencies. It is, however, perfect for newcomers.

Go to the following website: https://www.coinbase.com/join/59e7d9f9cca2f100d9a1a773

Note this is an referral link – this means you’ll get about £7 ($10) of free bitcoin when you buy your first bitcoin and so will I. Your first purchase needs to be worth at least $100 (about £75) so I suggest you buy £80-£100 to be sure you get the free money.

When you follow that link you’ll see a webpage like the following:

Opening a Coinbase account (Image: Bitcoin Investors UK)
Opening a Coinbase account (Image: Bitcoin Investors UK)

Complete the form (First Name, Last Name, Email and Password), the Captcha, and agree to the Ts & Cs. Click Sign Up. A good place to get a password is PasswordsGenerator – choose a length of 16 characters and include symbols, numbers and upper and lowercase characters. Make sure at this point that you have record the password somewhere, e.g. a new document. You will need a lot of passwords when dealing with cryptocurrency and the general rule is that if you lose the password you can lose the money! Get into careful organisation now.

A Coinbase account will be created for you and you’ll see a screen that says ‘Verify Your Email: We sent a verification email to <your email address>. Click the link in the email to get started!’

Go to your email inbox, find the Coinbase email and click on the Verify Email Address button/link. Return to Coinbase and you’ll see a new Coinbase screen with a popup message that says ‘Your email has now been verified. Thank you!‘ Close the old Coinbase screen.

The new Coinbase screen will say ‘Welcome <first name> – Let’s get started > Complete the following steps to get your first bitcoin or ethereum!‘ Select the Individual button unless you’re working on behalf of a business. Press Next.

On the next screen choose your country (if it’s not already set) and enter your mobile phone number. The number is required for security – Coinbase will text you a ‘2 Step Verification’ security code to login with. Press Next.

Enter the code Coinbase sent to your phone on the form on the next page.  Press Verify Phone Number.

Once that’s passed you come to a payment method screen. You can return to this later – for now Press Skip, I’ll do this later. You’re now into Coinbase.

You’ll see the main Dashboard, as show below.

Coinbase Dashboard (Image: Bitcoin Investors UK)
Coinbase Dashboard (Image: Bitcoin Investors UK)

This shows a chart and statistics of the current Bitcoin status (price, change since last month in £, change since last month in %). You can change the timescale to 1 hour, day, week, month, year, or All time. There are also tabs to see the same data for the Ethereum and Litecoin currencies instead of Bitcoin.

Below left you’ll see your account status. Below right you’ll see the value of coins in Your Portfolio (zero at this point).

Before you’re ready to buy your first Bitcoin you need to Verify your identity. To move to this step you can click on ‘Complete your account‘ bottom left, or just attempt to Buy (on the top menu) or add a payment method.

The screen will show ‘Select ID type‘, choose whatever you want (e.g. Driver’s License).

Choose your ID type (Image: Bitcoin Investors UK)
Choose your ID type (Image: Bitcoin Investors UK)

You will need to take a live photo of your ID so you are asked to choose to do this with either your mobile phone’s camera or your PC’s webcam, it’s up to you. I found it easiest to use the phone – once you select this you get messages on your phone to take you through the process.

I chose to photograph my driver’s licence – I did this with care in good lighting on a plain surface (white paper on a kitchen worktop) otherwise it can fail. Once you’ve taken front and back pictures on your phone control goes back to the PC. You get a message confirming that the ID is being verified:

ID is being verified (Image: Bitcoin Investors UK)
ID is being verified (Image: Bitcoin Investors UK)

Once it’s complete you’re back at the Coinbase Dashboard and ready to buy your first Bitcoin.

Next: How to Buy Your First Bitcoin