how coinbase work

What is coinbase how coinbase work complete guide {Update 2022}

In the world of cryptocurrencies, it is becoming more and more popular every day and that is why there are many exchanges to invest in. If you don’t know where to buy your first bitcoins, you’ve come to the right place. Today we explain what Coinbase is and how it works.

Do not worry about the security of Coinbase, since it is one of the most secure exchanges today. At TuAppPara we will help you get started in the world of cryptocurrencies.

Learn everything you need!

What is Coinbase?

Coinbase is a DCE (Digital currency exchange) , that is, it is a digital cryptocurrency exchange house. The peculiarity is that these exchange houses are decentralized. In these DCE, users can trade with the cryptocurrencies accepted by that exchange.

Now, after knowing what Coinbase is, you should also know that this DCE has its own website and several mobile applications . It also has a desktop app for PCs and laptops. In the case of mobiles, these are the available apps:

  • Coinbase y Coinbase Pro
  • Coinbase Wallet y Coinbase Wallet Lite

In the case of this publication, we will review the “Coinbase” application . The “Coinbase Pro” app is a version intended for users who want to do advanced “Trading” with their cryptocurrencies. The other 2 are the official wallets of this DCE.

Leaving the previous explanation aside, we will start with the complete review of the Coinbase application.

How Coinbase works: the most complete guide

It is very easy to understand how Coinbase works, because its app and website have a very friendly design for new users . But before starting with the explanation of its operation, you must know what Coinbase works for.

This DCE allows you to convert, buy, sell, pay, receive payments, store and trade your cryptocurrencies. But this is a summary explanation, because of this, we will start a deeper explanation.

Coinbase app interface

After creating a Coinbase account and verifying your identity, you can start using the app. The initial interface is white and has 4 basic categories:

  • Home : In this category you will find the basic functions: buy, send, receive and convert. In addition, you will also find news about the market, your reference list of cryptocurrencies and what are the most prominent cryptos of the moment. As you can see, the Coinbase app is quite complete.
  • Assets : Here you can analyze all your assets. That is, all the cryptocurrencies that you have purchased.
  • Trade : This is the category that will allow you to trade cryptocurrencies. That is, you can buy, sell and convert. Additionally, this category has the following subcategories: tradable, referral list, new to coinbase, all assets, winners, and losers.
  • Pay : This category is to make payments or receive payments. We remind you that the Coinbase app not only works for trading, because you can use it as a payment app, something like PayPal, but with cryptocurrencies.

The first thing to consider: The initial settings

The Coinbase app comes with basic default settings . However, you can change them, if you consider it necessary. For you to find the settings, follow these steps:

These are the settings options you can change:

Payment methods

In this case, the Coinbase app allows you to set different payment methods that vary by country . This exchange house recommends using credit/debit cards for small purchases. In case of large purchases and sales, it is recommended to use a bank account.

Bill

Possibly, these will be one of the most important settings of all s. Specifically, these are the available configurations:

Local currency

Here you will be able to set which coins you will use in Coinbase and this is very important, because the commissions and fees can change. Currently, the Coinbase app accepts more than 100 currencies , including all those available in Latin America, the United States and the European Union.

 

Limits and characteristics

These settings are very important, because they allow you to set limits necessary for safe trading. Ideally, you should leave these settings as they come by default.

Country

When you create your account, the Coinbase app asks you which country you are from. This is necessary for the payment of possible commissions , assuming that in the country where you reside there are commissions. If necessary, you can change the country in the settings: Country.

Privacy

These settings are only explanations about user privacy , cookie policy and data controls. Here you should not change anything.

Phone number

Here you will be able to add your mobile number , something that will be very necessary for the next security configurations. A special feature is that you can add multiple numbers.

Notification settings

We cannot explain how to use Coinbase without explaining its notification settings. These options allow you to be up to date on the cryptocurrency market.

Just by entering this configuration, you will come across several very important options:

Within the notification settings there are 2 major options:

  • Automatic notifications: Here you can activate or deactivate notifications by means of the “Pause” box. By doing so, you can choose between 8 hours, 1 day and 1 week. Also, SMS and email notifications will not be affected. SMS and mail notifications are mandatory. The mandatory notifications are due to Coinbase being safe and seeking to create a responsible trading environment.
  • Customize notifications : In case it is necessary, you can set custom settings. You have these options:
    • Security alerts : This option allows you to be informed about the security of your account . By default, push notifications and in-app notifications are turned on. Email and SMS notifications are mandatory and cannot be disabled.
    • Account activity : The Coinbase app allows you to stay up to date with your purchases, sales, conversions, payments received and sent . Here you can activate 3 options: Push notifications, in the application and email. The first 2 are enabled by default and the last one is mandatory and cannot be disabled.
    • Price alerts : These options are for price changes of the assets you have purchased. These are the available options: Push notifications, in the application and by email. All 3 are enabled by default.
    • Product Announcements : This is an ideal option for expert users, because they allow you to be informed about new features of Coinbase and new assets. The options available and enabled by default are: Push and in-app notifications.
    • News : Here the only option available in “In the application”. This option allows the Coinbase app to inform you about the most important news of the week.

Screen

These are configurations focused on the comfort of users. Currently, it has the following configurations :

Appearance

This app allows you to change the background color for convenience. You can set a light and dark color.

privacy mode

This mode allows you to have your balances hidden and so when you have the app activated on your mobile, your investments will be hidden. Thanks to this feature, Coinbase is safe and is positioned as one of the most private crypto apps.

Security

These are other settings of great importance. In tuAppPara we recommend that you use the following security options:

Require PIN/ Biometrics

Since Coinbase is a reliable and secure app, it allows you to set a 4-digit security PIN . Doing so also activates the biometric parameters. Then, a series of options will appear related to this security and that are activated by default:

  • Require the opening of the application.
  • Require the sending of cryptocurrencies.
  • Use biometrics.

An ideal aspect of Coinbase is that it allows you to choose whether you want to use PIN or biometric analysis.

So far our explanation of the basic configurations of Coinbase has come. Now it’s time to start explaining how to use the app to trade.

Start Your Trade: Learn How to Trade on the Coinbase App

Coinbase is a very versatile app, because it allows you to buy, sell, convert, pay and receive payments with cryptocurrencies. In this case, we will teach you how to buy and convert .

Before you start: Discover the organization of cryptocurrencies to operate in Coinbase

Within this category, you can find a series of listings that correspond to the different cryptocurrencies available. Specifically, these are the lists you will find:

  • Tradable : All the coins on Coinbase that are tradable are listed here. Not all cryptocurrencies within Coinbase are tradable for various reasons, but mainly because the platform is strict with the assets allowed for purchase.
  • Reference list : These are the cryptos that you usually frequent within the application.
  • New to Coinbase: This is where Coinbase places the new coins it lists on its platform.
  • All assets : This is the list with all the cryptos within Coinbase.
  • Winners : In this list are the cryptocurrencies with the highest price increases in the last 24 hours.
  • Losers : It would be the opposite of the previous case, because it is the list of cryptos with the greatest losses in the last 24 hours.

Knowing how all the cryptocurrencies available on Coinbase are organized, we will explain how to operate.

Steps needed to buy on Coinbase

It is very easy to learn how to use Coinbase to buy, because the app has a very easy to understand interface. You just need to apply these steps:

  1. Go to the “Trade” category, located at the bottom of the interface.
  2. Within the operate category, select the list: “Tradable” , where all the cryptos that you can buy will be.

In our example, we will select Bitcoin , but these steps work for all tradable assets within Coinbase.

On the Internet, opinions about buying bitcoins on Coinbase are very positive, because the procedure is very simple . When we select Bitcoin, a graph of the price change will appear . This graph gives you the price change according to the selected time, which can be: 1 hour, 1 day, 1 week, 1 month, 1 year or the entire time of existence of the asset.

Also, just below the chart will be the “Trade” button . When you click on it, 2 options will appear:

  • Buy BTC.
  • Convert BTC.

With the option to buy, you will be redirected to another screen within the Coinbase app. Here you must set the amount of fiat money you want to invest.

With these simple steps, you will now be able to buy any tradable cryptocurrency within Coinbase.

Steps to convert cryptocurrencies within Coinbase

Since Coinbase is reliable, it has extra options besides buying. One of those is the option to convert cryptocurrencies . This ability allows you to convert your BTC into other cryptos.

However, you will not be able to convert your Bitcoins into all cryptos , only those that are compatible with your algorithm and protocol. Continuing with the example of Bitcoin, these would be the necessary steps to convert:

  1. Go to the “Operate” category .
  2. Then, select the “Tradables” list.
  3. Within this list, find the asset you want to convert. In this case, it will be the BTC.

As in the steps to buy, the Coinbase app shows you the Bitcoin price change graphs. Below this graph, there is the “Trade” button. When pressed, 2 options will appear:

  • Buy BTC.
  • Convert BTC.
  • By clicking the “Convert” button, you will be redirected to a screenwhere the crypto you want to convert and its result will appear. Many users, before learning how to use Coinbase, think that it only works to buy or sell. However, the convert function is one of the most used.
  • In the case of BTC, you can convert it to more than 135 cryptocurrencies. In our example, we will do the conversion BTC =} ADA . If you want to change the exchange order, you can press the button between the symbols of both cryptos.

With these simple steps, you will be able to convert your cryptocurrencies into other assets. The main use of this function is to protect your capital. If you consider it necessary, you can convert your BTC into USDT, which is a stable crypto and its price does not change.

Learn how to receive and send payments with the Coinbase app

This app not only allows you to buy, sell and convert, you can also pay and receive payments . In other words, it also works as a payment application, something like PayPal, but with cryptocurrencies. Due to this interesting function, we will explain how to use it.

Learn how to receive payments with Coinbase

In order for you to receive your payments, you need to apply these steps :

  1. Go to the “pay” category.
  2. Then click on the “Receive” button.

If you are a merchant or just need to get paid, Coinbase has the option to get paid. However, in this case, you have 2 options:

  • Wait for the payment to arrive : This happens when the user who paid you has already done so before.
  • Submit a payment request .

This last option allows you to send a payment request. Since Coinbase is trustworthy, it allows you to choose 2 options for this request to be made:

  • Use a QR code : You can take a screenshot of this QR code and send it to the person who needs to pay you. But if that person is near you, they can scan the QR code that appears on your screen.
  • Share the payment address: All cryptocurrencies have a unique and exclusive payment address for this cryptocurrency. For example, the BTC address can only be used to send or receive BTC. This option allows you to share that payment address through various social networks, such as WhatsApp.

With these simple steps, you can request a payment through the Coinbase app.

Learn how to send payments by Binance

Coinbase allows you to send payments with various cryptocurrencies , such as stablecoins and some volatile ones , such as Bitcoin. To do so, follow these steps:

  1. Go to the “Pay” category.
  2. Hit the “Send” button.
  1. By pressing the “send” button, you will be redirected to a window where you must set the payment amount. You can do this in the fiat currency of your account or in the amount of cryptocurrency you want to send. To exchange these values, you must press the double arrow icon.
  2. With the amount of money established, you just have to click on continue and then select the contactwho will receive the money. Since Coinbase is reliable, it will ask you if the amount of money and the contact are correct, before sending.
  3. With these simple steps, you can easily send payments to any of your contactsthrough the Coinbase app.

6.    Other relevant Coinbase utilities

  1. The Coinbase app, even though it is the standard version, is still extremely useful. Its only use is not trading and payment method, because it also offers an excellent amount of news.
  2. By understanding how to use Coinbase, you will have realized the newsthat this application offers you. But you can also find even more information.
  3. In the “Trade” category, you will not only find all the tradable and non-tradable cryptocurrencies, you will also find a lot of valuable information.
  4. Continuing with the Bitcoin example, by selecting this asset in the “Trade” category, you will be redirected to the price charts. But you also have access to basic project information. Actually, all Coinbase coins have this information available.

As you can see in the screenshot above, the amount of information is quite large . But this information can be divided into 3 groups:

  • “About”
  • Basic statistics about the project.
  • News about the project.

In the case of “About” , you will find everything about the history of the project. By clicking the “See more” button , which is just below “About Bitcoin”, you will be redirected to the following page:

For Coinbase to be trustworthy, it must verify and provide official information about the projects it allows trading with. Because of this, on this page there are 2 extremely important links:

  • White paper.
  • Official Web site.

The term “white paper” is used to refer to an official document where a specific project is explained. The other is the direct link to the website.

In the case of statistics , these are stock information about the cryptocurrency in question.

The news is all in English and if you click on any of them, you will be redirected from the Coinbase app to their website.

How to track a specific cryptocurrency?

If you are interested in following the development of any cryptocurrency , this application allows you to do so. It is advisable to monitor the cryptos where you have your investment.

So that you can follow up, just apply these steps:

  1. Go to the “Trade” category.
  2. Next, select the crypto you want to track.
  3. Then, tap on the star icon above the Bitcoin chart.

By following these steps, the cryptocurrency of your interest will be tracked and will appear in the “Preference List” in the “Trade” category.

Coinbase Opinions: Is It Safe? Is it reliable?

Reviews of the Coinbase app are very positive. Actually, it is one of the safest markets to trade cryptocurrencies. Since at TuAppPara we are transparent, we will explain some reasons that validate Coinbase’s security claim.

Coinbase is one of the highest rated and most popular exchanges

Coinbase has an excellent reputation on cryptocurrency tracking websites. For example, CoinMarketCap has a rating on all exchanges. In the case of Coinbase, it ranks second in popularity.

In addition, it also ranks second in Spot volume movement.

Coinbase is transparent about its security

In the process of explaining what Coinbase is and how it works, we do not explain anything about its security. According to Coinbase, these are its security features:

  • 98% of funds in Coinbase are stored offline : Cryptocurrencies stored in Coinbase are stored in safe deposit boxes offline and these are spread all over the world.
    • User data is not stored in Coinbase : Data is stored offline.
    • The data is encrypted with AES-256 and then copied onto FIPS-140 USB drives: Coinbase backs up this data on paper.
    • The information is stored in these units and their respective paper copies are distributed in safes: With this last feature, Coinbase makes sure to guarantee a safe storage of the funds.

But this is not all, because Coinbase is reliable thanks to the fact that it checks the criminal background of its employees , before hiring them.

The application has SQ L injection filters and verification of DELETE, POST and PUT requests . This allows CSRF attacks to be stopped. But this is not all, because the app checks the strength of the passwords when creating the account or when resetting the passwords.

In addition, the app has a limit of actions . For example, you only have 4 login attempts. Likewise, Coinbase verifies the personal data of its users to allow them to trade.

Coinbase account can be strengthened with 2-step verification. Lastly, Coinbase is secure because its website has HTTPs protocol and SSL certificate.

Coinbase is publicly traded: An example of Coinbase’s security

This might not seem like a big deal, but it is irrefutable proof of Coinbase’s security. On April 14, 2021, Coinbase began trading on the “Nasdaq” market . This is a historic event, because it is the first exchange house to obtain this achievement .

Since the “nasdaq” market does not accept just anyone , we can reaffirm that Coinbase is completely safe.

Alternatives to Coinbase: other applications to invest in cryptocurrencies

The market is full of many apps to buy cryptocurrencies , so you have a lot to choose from. It is impossible to say which are the best apps to invest in cryptos. However, we can rely on official data provided by CoinMarketCap.

This website has a ranking of the best cryptocurrency exchanges. This would be the top 10:

  1. Binance.
  2. Coinbase.
  3. FTX.
  4. kraken.
  5. Kucoin.
  6. Huobi Global.
  7. Gate.io.
  8. Binance.US.
  9. BitFinex.
  10. Cryto.com Exchange.

As you can see, Binance and Coinbase are direct competitors. Because of this, many users wonder: Which is better Coinbase or Binance?

The answer is very complicated and is related to personal tastes. For example, if you want an exchange that accepts a large number of payment methods, including virtual and physical prepaid cards , then Binance is a good option.

But if you want an exchange with a user-friendly interface , even for inexperienced users, then Coinbase is a better option.

Warnings and precautions

As we have already mentioned in other publications on cryptocurrencies, these are very volatile digital assets. In reality, they are the most volatile assets. Because of this, there are some risks when you enter the world of crypto:

  • Cryptocurrencies are extremely volatile: Although technical and fundamental analysis is useful to understand the market, you will never be 100% protected from market movements.
  • Exchange houses can be hacked: These websites have great security, but they are not impossible to hack. In 2019 Binance was hacked and lost $40 million worth of Bitcoin. To avoid these situations, it is best to store the cryptocurrencies in a wallet (“Wallet”).
  • Some countries have fees: Although cryptocurrencies are a decentralized asset, they may have fees and taxes. For example, Binance could provide financial information of its users to the government of the country. This in order for people to pay their taxes.
  • You should only invest what you are willing to lose: This is a repeated phrase in the world of investments. Remember, I only invest what you can afford to lose, due to the volatility of crypto.
  • Although Coinbase is safe, you should not have all your money on this platform : In some cases, exchanges may stop offering their services in a certain country. This is due to political reasons and if this happens, you must move all your money deposited in that exchange house and the more money there is, the more difficult it will be to move it.

We are done with our post on what Coinbase is. Tell us, have we answered all your questions? Have we forgotten to explain some feature? Do not forget to leave us a comment and share us with your friends, so they will learn everything they need about Coinbase.