How To Use Coinbase
To deal in cryptocurrencies like Bitcoin and Ethereum, you need a secure site to make your purchases. Coinbase is a convenient way to monitor the market and buy or sell cryptocurrencies. We'll walk you through how Coinbase works and why it's vital to so many users in the blockchain world. To better understand these currencies, try this article on the difference between Bitcoin and Ethereum. This video was made with Ezvid Wikimaker.
Is Coinbase A Bank?
One major difference between cryptocurrencies and traditional currencies like dollars or Euro is that their value is not backed by a government. That means that while Coinbase is FDIC insured, only the dollars in your Coinbase account are protected. Coinbase has additional insurance, but it's a bit complicated because not all funds held by Coinbase are held online. The blockchain provides a reliable record of purchases made with cryptocurrency, but don't think you can send money to an unreliable source and just cancel the transaction later when you realize your mistake. That's why sites like DappRadar are useful, because they can help you know if a dapp has real users or if it's a fly-by-night operation.
An Interview With Coinbase's President
Can I Buy Crypto Assets On Coinbase?
If you want to buy Bitcoin or Ether, then Coinbase is the place for you. If you're looking to purchase other assets, you'll need to make one more stop first. After setting up your Coinbase account, you need to download MetaMask for your browser. You can then use your Coinbase login to purchase Ether, which can be used to purchase coins on exchanges like ForkDelta, or crypto collectibles for games like CryptoCities. For a full breakdown of how the process of purchasing unique assets works, try this guide to claiming a Factbar.
Cryptocurrencies like Bitcoin and Ethereum are growing in popularity as their prices climb. And with the introduction of crypto collectibles like Factbar and Cryptokitties, more and more people are purchasing digital assets. If you're confused about where to start and how to actually obtain these things, this tutorial will walk you through Coinbase, a popular service where you can get started in the crypto world.
First, a little background. The most popular cryptocurrency is Bitcoin, a digital form of money that relies on a technology called blockchain. By using a decentralized ledger, users can verify transactions without the need for a central authority. This could be useful for anyone doing business online or dealing with customers in another nation.
Bitcoin rewarded users for their computing power through "Mining," which added new currency to the market. As its popularity has grown, the value of each Bitcoin has gone up, trading at a significant price. Those invested in Bitcoin include short-term buyers who plan to sell their coins down the road at a profit, and long-term holders who believe Bitcoin will soon be used all over the world in place of traditional money.
Those invested in Bitcoin include short-term buyers who plan to sell their coins down the road at a profit, and long-term holders who believe Bitcoin will soon be used all over the world in place of traditional money.
Ethereum was the next step in crypto evolution. Creator Vitalik Buterin took the principles of blockchain from Bitcoin and expanded upon them to involve the storing of programs, not just data. Ethereum incorporates "Smart contracts" to allow for the development of applications that take advantage of its blockchain.
Beyond Bitcoin and Ethereum, there are many different types of crypto coins available. Often companies will issue an "I.C.O.," where they sell tokens that represent a stake in their company, or use those tokens as currency to participate in that company's business. You can use Ether and Bitcoin to buy and sell these tokens, depending on the blockchain they employ. If the company's value goes up, the coins may go up in value just like a stock.
Many companies are attracted to Ethereum because of its ability to incorporate smart contracts through a set of principles called ERC20. When you make a transaction on the Ethereum network, no person is verifying your payment. Instead, it goes through a smart contract for the asset that you're buying or selling. ERC20 is a set of six functions for these smart contracts to ensure integration with the blockchain. This means websites can create their own virtual tokens that you can buy or sell for Ether.
Many companies are attracted to Ethereum because of its ability to incorporate smart contracts through a set of principles called ERC20.
ERC20 tokens are like Bitcoin and Ether in that they are fungible, meaning all coins of a certain currency are the same. If you have two Bitcoins, and you plan to sell one, it doesn't matter which one you sell because they are worth the same amount. You can also deal in fractions of a coin in the same way you can deal in dollars and cents. But some assets are unique, or non-fungible. Ethereum has led the way in using its blockchain for unique digital assets, also known as crypto collectibles.
To handle unique assets, ERC721 was created. This is a standard for smart contracts dealing in digital assets that are not all the same. One popular example is Factbar, online representations of facts that are researched and verified. If you own a Factbar, you are the only person who owns it at that time, and every Factbar has its own unique value. Highly-desirable Factbars are therefore very valuable because they are rare.
The ability to employ these smart contracts has led to an explosion in dapps, applications where users can buy and sell tokens. These include fungible tokens issued by companies, crypto collectibles like Factbar, and games like CryptoCountries, where individual tokens are sold for high amounts if they have desirable traits. Popular games such as CryptoKitties have seen millions of dollars worth of Ether changing hands.
The ability to employ these smart contracts has led to an explosion in dapps, applications where users can buy and sell tokens.
Whether you want to hold onto some Bitcoin or Ether in the hopes that its value will go up, purchase a company's ERC20 token, or buy a unique digital asset, you need to start with the right currency. Ethereum can be used like Bitcoin for buying alternative coins, but only Ethereum is currently used with smart contracts for ERC721 tokens. In order to get the Ether you need to buy these assets, you have to go through a site like Coinbase.
Coinbase has a simple interface that lets you manage your crypto purchases and monitor prices easily. On the home page, you can sign up for an account. You'll have to verify your email address, phone number, and other information for security purposes. When you log in, you'll be taken to your dashboard, where you can see the prices for Ethereum, Bitcoin, and Litecoin. You can add a payment method to start purchasing.
If all you want to do is buy some Bitcoin and hold onto it, you can buy and sell your holdings on the Coinbase site. However, if you want to use your Ethereum to buy crypto collectibles, you need to do so elsewhere. To integrate your Ethereum wallet with your browser, you should download MetaMask. Connecting MetaMask to your Coinbase account is simple, and then your Ether will be in your MetaMask account.
To integrate your Ethereum wallet with your browser, you should download MetaMask.
From there, you can go to an exchange like ForkDelta, where you can buy fungible coins, or to a website for unique assets like Factbar. You can browse the prices of these assets, select one, and then initiate the payment through MetaMask. All your buying and selling will be done in your browser, and you'll only need Coinbase if you want to buy more Ether.
Though blockchain is a complicated technology, getting into this world isn't difficult. Coinbase makes it easy to invest in cryptocurrency or digital assets without needing advanced technical knowledge. With these steps, you'll be on your way to creating a portfolio that is on the cutting edge of the digital world.