What is Coinbase and how does it work?

Coinbase is a publicly-traded cryptocurrency exchange that allows users to buy, sell, and store digital assets through a beginner-friendly platform. The exchange operates by connecting users' bank accounts or payment methods to cryptocurrency markets. This enables instant purchases of Bitcoin, Ethereum, and hundreds of other digital currencies with transparent pricing and regulated security practices.

Is Coinbase safe to use?

Coinbase maintains strong security through cold storage of 98% of customer funds, comprehensive insurance coverage, and regulatory compliance across multiple jurisdictions. The platform's public company status, bank-level security measures, and clean track record of protecting customer assets make it one of the most trusted exchanges. This applies to both cryptocurrency storage and trading.

What are the fees for trading on this platform?

Fee structures vary based on transaction type and funding method. Bank transfers typically cost $0.99-$2.99 for smaller purchases plus a spread of 0.5-2%. Debit card purchases incur approximately 3.99% fees for instant settlement. Advanced Trade users can access lower fees ranging from 0.60% to 0.80% depending on trading volume.

How do I buy cryptocurrency on the platform?

Purchasing crypto involves creating a verified account, linking a bank account or payment method, selecting your desired cryptocurrency, entering the purchase amount, and confirming the transaction. The entire process typically takes less than 15 minutes for new users. Purchases appear immediately in your account regardless of settlement times for the underlying payment method.

Does Coinbase report transactions to the IRS?

Yes, Coinbase reports cryptocurrency transactions to the IRS and provides users with necessary tax documentation including Form 1099-K for qualifying transactions. The platform automatically tracks transaction history and generates tax reports to help users comply with cryptocurrency tax obligations. Users should consult tax professionals for specific guidance on their situations.

Is Coinbase the Right Crypto Exchange for You?

Jake

Nov 26, 2025

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18 min read

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