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Home / Tips and Tricks / Coinbase 101: Fees & Fine Print You Must Know Before You Trade Bitcoins & Other Cryptocurrencies «Smartphones :: Gadget Hacks

Coinbase 101: Fees & Fine Print You Must Know Before You Trade Bitcoins & Other Cryptocurrencies «Smartphones :: Gadget Hacks

Coinbase is the first point of contact for many users when it comes to Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC) because of its user-friendly interface. But before you join them, you know that this ease of use is associated with a price. Coinbase calculates fees for each transaction, and your bank could even add additional fees. Plus, there are some fine prints to watch out for.

Although the user agreement is easily understood by careful reading, the fees that Coinbase charges for transactions can be somewhat confusing. And then there are limits to be respected, as well as rules and important details that are not explained in the user agreement.

Understanding these charges, important terms and hidden details are very important to minimize unpleasant surprises you buy and sell digital cryptocurrencies. So, we've decided to delve a little deeper to make it easier to understand, so you know everything you need to know before you open a Coinbase account on your smartphone.

It is available for Android & iPhones

The biggest reason for the rise of Coinbase is its accessibility. As one of the few Bitcoin Wallet apps available for both iOS and Android, Coinbase has high ratings from users on both platforms due to its reliability and intuitive user interface. Coinbase is free to install, so try it if you have not already done so and see if this wallet is right for you.

It is important to note that below are fees and other details applicable to US based transactions that may change at any time

Cryptocurrency Purchase and Sale Fees

As far as fees are concerned, Coinbase requires a small price for the purchase Buying and selling in a combination of fixed and variable fees. depending on the total amount and method of payment or down payment. For smaller purchases and sales, the app charges a flat fee, regardless of whether you use USD in your purse, in a bank account, or on a credit / debit card. The fees for small transactions are:

  • $ 0.99 for buying and selling at $ 10.99 and less
  • $ 1.49 for buying and selling from $ 11.00 to $ 26.49
  • 1 $ 99 for buying and selling $ 26.50 up to $ 51.99
  • $ 2.99 for buying and selling $ 52.00 up to $ 78.05

The fixed fee of $ 2.99 also covers transactions up to $ 200 within Coinbase if you use either your USD wallet or your bank account to buy and sell crypto currency, with a 1.49% variable fee on purchases and sales starting at $ 201. If you use or sell your credit or debit card for purchases and deposit your proceeds into your PayPal account, Coinbase will charge you a variable fee of approximately 3.99% for transactions starting at $ 78.06.

How These Fees Apply When You Purchase [19659005] When you purchase one of the three cryptocurrencies currently available in Coinbase, the app charges you a fee, which is then deducted from the amount you wish to purchase.

For example, if you spend $ 100 to buy ether through your bank account, and the fee is $ 2.99, that fee will be included in that $ 100, giving you only $ 97.01 in ether. To get exactly $ 100 worth of litecoins, you'll need to add that extra fee and pay $ 102.99.

Whatever your end fee, Coinbase will show you the amount confirmation page before committing to buy Bitcoins, Bitcoin Cash, Ether or Litecoins. along with displaying the value in USD and your digital target currency to give you a clearer picture.

How These Fees Are Applied to Sales

If you decide to sell part or all of your shares in Bitcoin, Bitcoin Cash, Ether or Litecoin, Coinbase will deduct the fees from the amount you sell want to reach the grand total.

For example, if you decide to sell $ 49 worth of Bitcoin to your USD wallet and the fee is $ 1.99, your total will actually be $ 47.0. 1. The full Bitcoin value of $ 49 will be deducted from the Bitcoin wallet in your Coinbase account and $ 47.01 will be credited to your account. If you want to sell $ 49 worth of bitcoins, you'll need to spend $ 50.99 to account for the charge.

As with the purchase, Coinbase will show you all the fees on the confirmation page so that you can adjust accordingly before committing

Other Purchase & Selling Fees

In addition to the Coinbase fees, it is very important that you inquire with your bank as they charge additional fees can, in addition to what Coinbase calculates. For example, some users report that they charge 3% for foreign transactions for transactions made with a debit or credit card.

If you see an "international" fee notification, you may be charged by your bank.

As it turns out, CoinBase is known for using a London-based company and credit card-based transactions. Although these reports are sporadic and do not affect everyone, it pays to seek international fees at the bank to minimize headaches.

Length of time before funds are available

Depending on which method you use to buy and sell Bitcoins, Bitcoin Cash, Litecoins and Ether, transaction times can vary from almost instant to a few days. Whatever method you use to buy and sell, you fix the rate at which the digital currency runs – even if it triples or becomes cheaper after buying or selling.

Although you can buy digital currencies with your bank account can take up to a week, Coinbase has made some changes to shorten the time frame. Once you're done, any cryptocurrency you buy with a bank account will be immediately posted to your wallet as long as you verify your identity. While you can buy and sell digital currencies within the app, you will not be able to withdraw money from Coinbase until your original payment is cleared.

This transaction has just begun completed on December 15, seven days later.

For instant transactions with fees that are similar to buying and selling through your bank account, you can use cash from your USD wallet to either buy Bitcoins, Bitcoin cash, Litecoins or Aether or deposit the proceeds directly into the bank account Deposit account. You also have the option to deposit USD from your bank account directly into your USD wallet without incurring any fees, although this takes 4-5 business days.

If you do not decline the higher fees, you can either use a debit or credit card to buy digital currencies and / or deposit your proceeds from the sale into your PayPal account. These transactions happen almost immediately, so if you need a little ether in a hurry, but have no money in your USD wallet, this is the only route – be prepared to pay a hefty 4% for purchases and deposits over $ 78 ,

Maximum spending limits

Coinbase sets limits on how much you can buy and sell weekly. Coinbase increases the spending limits based on the duration and scope of the trade you have made, along with identity verification such as your phone number, personal details and a government ID. For example, if you've been using Coinbase for at least three years and your identity is fully verified, but only sporadically trading in small amounts, it's not unreasonable to have weekly transaction limits of $ 50,000 combined for all the wallets you see in Coinbase, $ 10,000 for bank accounts and $ 3,000 for debit or credit cards.

Soon, however, raises the spending restrictions imposed by Coinbase on users whose identity has been verified. The most significant change concerns the weekly limit of $ 25,000 for bank transactions. This limit has now become a daily limit, giving the heavy users of the platform much more access to buying and selling cryptocurrencies.

While the spending limit changes may not apply to you, you can still increase your earnings weekly limits by adding more bank accounts and credit or debit cards, especially if you plan to invest heavily in digital currencies. This will increase your daily and weekly limits as your trading volume goes up.

Your weekly spending limits are replenished every seven days at a rate of 1/7 a day. So, if you sold bitcoins at your maximum limit of $ 49,000, your limit would slowly top up for $ 7,000 every day for seven days, until it's completely refilled.

These limits only apply to Coinbase itself. Your bank may have lower limits, so read the fine print in your bank agreement or call your bank to find out what these limits apply to.

Coinbase is not available anywhere in the US

Unfortunately, not all of those in the United States may need Coinbase for their cryptocurrency. As of: June 2016, Coinbase and other Bitcoin services such as Coinmama are no longer available to residents of Wyoming due to stringent provisions regarding Bitcoin Wallet services.

Coinbase has argued that the need to obtain a license on the condition is not only impractical, but also very expensive and inefficient for Coinbase, having cash reserves equal to the face value of all Bitcoins held on behalf of clients implement to please the state. For this reason, Coinbase has decided to suspend operations in Wyoming indefinitely.

You can block your account for dubious transactions

Unlike private cryptocurrency wallets, which gives you the total freedom to use your bitcoins or ether, as you see fit, Coinbase has some limitations on spending and the reception of digital currencies. For example, under Section 6.4 of the License Agreement, Coinbase reserves the right to monitor your account and track where you send and receive cryptocurrency to ensure that you do not use it for any purpose that is prohibited. 19659002] "Prohibited Use and Prohibited Business", which can be found in Appendix 1 of the User Agreement, covers a wide range of activities and businesses, such as online abuse, gambling, high-risk companies, illegal drugs, pornography and pyramid schemes, to some call. Violating this may result in the sudden suspension or termination of your Coinbase account.

While these surface bans appear reasonable, it is still worrying as we are technically prohibited from using our bitcoins for companies that consider Coinbase to be a high risk. This is a slippery slope in and of itself, as crypto currency exchanges may very well fall under this umbrella. So, if you transfer bitcoins to a stock exchange site like Poloniex to buy other, less popular cryptocurrencies like stellar, Coinbase may be able to suspend or terminate your account without notice and freeze any in-app assets you may have.

You are responsible If your account is hacked

Another notable fact is Section 6.9, which basically states that you alone are responsible for keeping your wallets and other important information as secure as possible. This means that various measures, such as strong passwords and two-factor authentication, are used to keep thieves out.

Staying as safe as possible can not be overemphasized, because if Bitcoins, Bitcoins, Litecoins, or Aether have disappeared, your chances of getting them back are almost impossible. To underline this, Coinbase insurance policies do not cover losses you suffer because your account has been hacked and compromised. That said, Coinbase offers some protection in terms of both your USD and your cryptocurrency.

Your money is only partially insured

According to Coinbase, your cash stored in your USD wallet is a separate bank account. Therefore, your USD wallet is protected by the FDIC up to a maximum of $ 250,000 through theft, fraud, or if Coinbase closes the store.

On the other hand, because digital currencies like Bitcoin are considered neither legal tender nor guaranteed. FDIC protection does not extend to your cryptocurrency. However, Coinbase offers some protection against fraudulent activity and theft and insures all digital currencies that are stored online. So, if Coinbase is compromised as a whole, any Bitcoins, Bitcoins, Litecoins, or Aethers that you have stored and stolen online will be returned to you.

There is a huge catch: Coinbase only has less than 2% of client funds being stored online. This means that more than 98% of all funds stored offline are not protected against theft or fraud. If someone ever came to the company's offline store and deleted it completely, it's likely that any digital currency you've lost will not be returned.

Coinbase is not anonymous

Long before Bitstream became popular Because of its security and supposed anonymity, cybercrime is often viewed as the currency of choice. In truth, bitcoins are not nearly as anonymous as you think. According to Bitcoin.org:

All Bitcoin transactions are publicly and permanently stored on the network, meaning that anyone can see the balance and transactions of any bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices to protect your privacy.

– Bitcoin.org

Coinbase extends these layers of privacy even further with its identity verification requirement, firmly anchoring your identity to your wallet addresses. So, if you decide to buy illegal items like drugs on the dark net with your Coinbase account, do not be surprised if one day you wake up and not only find your account and assets frozen, but also tap federal authorities at your door

The IRS Wants Its Just Share

Wherever much money is to be made, the helmsman will surely follow, and Bitcoin exchanges like Coinbase are not immune to this fundamental truth. In November 2017 Coinbase was forced by the Federal Court to comply with the IRS and divulge information about at least 14,000 accounts responsible for 9 million transactions between 2013 and 2015.

In its request, the IRS initially called Coinbase to identify and report more than one million accounts, but later scaled it back to only report high volume merchants who have accounts worth $ 20,000 or more and only on Concentrate bitcoin. With a Bitcoin now worth nearly $ 20,000, significantly more Coinbase account holders will be scrutinized when investigating transactions for 2016 and 2017.

There are sporadic outages

Coinbase seems to be struggling to keep up with demand, while the cryptocurrency hype train continues to gain momentum. New users have been flooded and have so overwhelmed Coinbase that it temporarily interrupts the trade from time to time to relieve pressure.

Due to the high volume of traffic, do not be surprised if you do occasional service trading digital currencies in Coinbase. Hopefully, this problem will be resolved soon when Coinbase works on its network to handle a significantly higher number of users. We will certainly keep you up to date with more information on downtime.

Do you have questions about Coinbase?

As always, we welcome your thoughts or questions about buying and selling cryptocurrencies on Coinbase. Just click in the comments below.

Cover Picture and Screenshots of Amboy Manalo / Gadget Hacks

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