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What is coinbase?

What is coinbase?
Image source: Getty Images.

Have heard the name Coinbase and you’re wondering what it actually is? I’m going to explain everything you need to know about the company and why it is one of the world’s most popular crypto exchanges.

What is Coinbase?

Coinbase is a leading cryptocurrency exchange. A crypto exchange is simply somewhere that you can buy, sell, transfer and hold assets like Bitcoin.

Exchanges help to bring buyers and sellers together and they charge a fee for doing so. They make money by acting as the middleman.

The Coinbase platform works in a very similar way to something like a stock exchange. People can use it to trade digital currencies.

How did Coinbase start?

Coinbase has a pretty interesting history. Airbnb programmer Brian Armstrong formed the company in San Fransisco back in 2012. 

Armstrong learnt about Bitcoin pretty early on and was hooked. At that time, there wasn’t really anywhere for people to easily buy, sell or keep the digital asset. Bitcoin wallets were complex and difficult to use.

For a long time, cryptocurrency was an underground movement. Coinbase helped bring it to the masses. Along with being user-friendly, Coinbase welcomed regulation of the cryptocurrency market, helping the space to become more legitimate.

Why is Coinbase so popular?

When people are starting out with cryptocurrency, Coinbase is usually the first place they go. This is largely because the website and app are very simple and easy to understand.

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Coinbase is very straightforward and you can buy or sell digital assets with minimal hassle. It is definitely one of the easiest exchanges to get to grips with if you are just entering the world of digital currencies.

Another strong feature of Coinbase is security. Since the start, Coinbase has taken security very seriously. The company has never had any serious security breaches, which is somewhat rare in cryptocurrency. The platform’s close work with regulators and lawmakers has also earned it the respect of more traditional investors and organisations.

How do you use Coinbase?

In order to use Coinbase, you have to create an account. This just involves some basic information and providing identification so the company can verify who you are. You can set things up easily on a computer desktop or on the Coinbase app.

Once you’re set up, you can fund your account using a bank card or bank transfer. Buying cryptocurrency on the platform is very straightforward and the fees are clear.

Originally, you could only purchase Bitcoin. In recent years a number of different types of cryptocurrency have been added to the platform. Currently, there are around 40 different types available, including popular choices like:

  • Ether (ETH)
  • Litecoin (LTC)
  • Dash (DASH)
  • Stellar Lumens (XLM)

Are there alternatives to Coinbase?

Although it was one of the first crypto exchanges, there are now plenty of competitors, including:

  • Gemini
  • Bittrex
  • Kraken
  • Binance
  • Bitfinex

Some will let you buy directly using sterling. Others require you to use euros or US dollars to make purchases.

Buying cryptocurrency is becoming simpler but it’s still important to understand the risks involved. Although the process of buying them is becoming more streamlined, they can still be risky or volatile as a potential investment.

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