How to Buy Bitcoin Guide

We believe Bitcoin is “the people’s currency” – a secure, electronic way to hold and transfer wealth as the value of the dollar disintegrates. Every serious investor should know how to buy, sell, and hold this cryptocurrency. For more information, see our May 12, 2023 issue of The Big Secret.

Below, you’ll find some simple instructions on how to make Bitcoin transactions. If you have any questions, please call Lance, your Customer Concierge, at +1 (888) 610-8895, or locally at (443) 815-4447.

Video instructions for computer:

Video instructions for the Coinbase app:

What Will You Need?

  • A government-issued photo ID (note that passport cards are not accepted)
  • Computer or smartphone/tablet connected to the Internet
  • A phone number that can receive text messages (for two-factor identification)
  • Be at least 18 years old

Note: Coinbase doesn’t assess any fees to create or maintain your account; however, Coinbase does charge trading fees. Click here for a full disclosure of Coinbase trading fees.

How to Start A Coinbase Account

1. Go to Coinbase’s website, www.coinbase.com. From here, you’ll enter your email and click on the “Sign up” button, which will take you to a “Sign up” page. You will also need to select the account type (either individual or business account).

Fill out the signup form with the appropriate information and make sure to choose a strong password. Once the fields are correctly filled, click “Create an account”.

2. Fill out the signup form with the appropriate information and make sure to  choose a strong password. Once the fields are correctly filled click “Create an account”.

3. Once you’ve signed up, Coinbase will send you a verification email to the email address you provided. Check your inbox and click the link to verify your account. If you don’t receive the email,check your junk inbox and make sure you’ve filled in the right email.

4. From here, you will be prompted to set up two-factor verification. You’ll register your mobile number with Coinbase and then click “Send code”.

**Make sure you fill out the right phone number and that the line can receive text messages. If for some reason you’re locked out of your account or lose your password, the phone associated with this phone number will serve as a verification if you need to access your account.

5. Once you enter your phone number, you will receive a text with an authentication code, (a seven-digit number). Enter this number on the next page (see the image below) and select “Submit”.

6. Then you’ll be asked to verify your country of citizenship.

7. Next, you will need to verify your identity by completing the form below. As a regulated financial services company, Coinbase is required to verify all its customers’ identity, but will not sell or distribute customers’ information without their consent.

You will have the option to skip this step and return later; however, you will be required to complete the form to begin trading on Coinbase.

8. Next, you will be asked to add a payment method.

9. Coinbase uses Plaid to connect to your bank account. After you select Continue (on the page below), you will select the institution where you bank.

If you prefer a different funding source, Coinbase offers a variety of methods to fund your account including direct deposit, debit card, credit card, wire transfers, or PayPal.

10. If you select to fund your account with a bank account, you will be redirected to your bank’s site to log in and verify your account information. Coinbase will link this account as your preferred payment method.

Once your account is funded and verified, you are ready to trade Bitcoin and other cryptocurrencies on Coinbase. (We do not recommend any crypto other than Bitcoin at this time.)

How to Buy and Sell Bitcoin on Coinbase

  • If you’d prefer to watch video instructions, a video can be found here.

1. Once you are logged into Coinbase.com and your account has been approved, you will be able to buy and sell Bitcoin or other cryptos at your convenience. Once you log in, your screen should look similar to the one below.

2. To buy (or sell) a coin, you can select the appropriate token on the Coinbase home screen above or enter the coin in the search bar at the top of the page.

Note: the bank account or funding method you selected when signing up will be used to fund your purchases. To add another funding method, select “Pay with” and you will have the option to add an additional account.

3. Now, enter the amount of Bitcoin you’d like to purchase in your preferred currency.  Then click “Preview Buy”. If you’d like to sell crypto, click the “Sell” tab located to the right of “Buy” at the top of the tab pictured below.

4. On the “Order preview” tab, you will confirm the transaction details and review the fee. To learn more about Coinbase’s pricing and fees, click here.

5. Then click “Buy now”  to submit your order. Once your order is completed, you will receive a confirmation email.

Congrats! You’ve now purchased Bitcoin. Now that you own Bitcoin, you need to decide where you would like to keep your tokens: either a custodial wallet or a non-custodial wallet.

Custodial vs. Non-Custodial Wallets

Just as with money, Bitcoin needs to be stored somewhere safe so that you can access it when you need to, but also make sure that it is protected. There are two types of blockchain wallets where you can store your crypto assets: custodial wallets and non-custodial wallets.

What is a custodial wallet?

A custodial wallet is a type of blockchain wallet in which a third party (i.e. Coinbase) controls the private keys on behalf of the wallet’s owners. Coinbase offers a custodial wallet, meaning that Coinbase has full control over your funds while you only have to give them permission to buy or sell funds. The third party, in this case, Coinbase, is responsible for storing, securing, and managing your cryptocurrency on your behalf. The custodial wallet owner (you) does not have direct access to the private keys, creating some level of risk since the custodian controls the funds.

What is a non-custodial wallet?

A non-custodial wallet is a type of blockchain wallet where the user controls the private keys. Non-custodial wallet owners have full control over their private keys and manage their cryptocurrencies. Non-custodial wallets come in both hardware wallets and software-based wallets that are managed through a computer or mobile device.

What’s the difference between a non-custodial wallet and a custodial wallet?

Non-custodial wallet owners have full control of the wallet and its private keys, whereas custodial wallet owners do not have full control of their wallet or its keys.

Non-custodial wallets are considered a higher level of security compared to custodial wallets because the user has complete control over their funds.

Overall, custodial wallets offer more convenience and ease of use, while non-custodial wallets provide more security and control over the user’s cryptocurrency holdings. It’s important to understand the pros and cons of both types of wallets before investing in Bitcoin.

Risks of custodial wallets:

  • Security risk: Custodial wallets are more vulnerable to security breakers and hacking attempts as they store a large number of cryptocurrencies and other data in one place.
  • Third-party risk: The company acting as a custodian (i.e. Coinbase) could act fraudulently, go bankrupt, or become insolvent.
  • Limited access: The custodial wallet may impose limitations on withdrawals, deposits, or trading.
  • Regulatory risk: Custodial wallets may be subject to changes in regulatory requirements that could impact users’ ability to trade or access their funds. Currently, the FDIC does not insure any cryptocurrency exchanges and cryptocurrency exchanges are not subject to the protections of the FDIC.

Risks of non-custodial wallets:

  • User error: Non-custodial wallet users are required to manage their own private keys. If the private keys are lost or if a mistake is made in securely managing the private keys, all funds could be lost. This is why it is extremely critical that you safely secure a password and make sure that it is written down in a safe place where no one has access.
  • Hardware failure: If using a hardware wallet to store a non-custodial wallet, the hardware device could be damaged or lost, which could result in a loss of access to funds.
  • Phishing attacks: Non-custodial users are at risk of phishing attacks, where a malicious actor tricks the non-custodial user into revealing their private keys or passwords.
  • Limited support: There are no customer support teams to help you navigate the options to recover lost or stolen funds.

For the purpose of this guide, we’ve demonstrated how to start an account and buy/sell Bitcoin through a custodial wallet, Coinbase. We will also provide the resources for how to transfer your Bitcoin (purchased through Coinbase) to a non-custodial wallet, as well as provide links to a few secure hardware wallets.

Non-Custodial Hardware Wallets:

Link to Ledger Hard Wallets (see the picture below)

Video Instructions for Ledger Hard Wallets:

Other relevant videos:

Other Hardware Wallets:

Non-Custodial Software Wallets

Coinbase Wallet is a non-custodial software wallet that is a separate entity from the Coinbase.com cryptocurrency exchange. You do not need a Coinbase.com account to create a Coinbase Wallet. You can download a Coinbase Wallet here.

Videos to get you started:

Other relevant Coinbase tutorial videos: