Ethereum: What happens to coins purchased on Coinbase?
Coinbase is a popular online platform known to allow users to buy, sell and hold cryptocurrencies such as Bitcoin, Ethereum and many more. But have you wondered what happens to the coins that the funds buy on Coinbase? In this article, we are immersed in the world of cryptocurrency trade and discover where it comes from coinbase coins.
What is Coinbase?
Coinbase is a digital currency exchange platform that allows users to buy, sell and store cryptocurrencies such as Bitcoin (BTC), ETHERUUM (ETH) and others. The company was founded in 2012 by Brian Armstrong and Fred Egraham, and has since become one of the largest and most respected online cryptocurrency platforms.
How is Coinbase looking for?
Coinbase earns money through two main sources of revenue: fees and interest.
- Fees : Coinbase charge for users for each transaction, which is usually 1-5% of the amount purchased or sold. This fee is usually deducted from the user’s wallet.
- Interest : Coinbase is also interested in stored cryptocurrencies. The company keeps coins in custody and is looking for interest, which can be between 0.5% and 3% per year.
Where do they get the coins?
Coinbase is not miner or producing new cryptocurrencies such as Bitcoin (BTC) or ETHEREUM (ETH). Instead, it buys and sells existing coins on the open market. It works like this:
1.
* Stock Exchange
: You can buy coinbase coins directly from the stock exchanges such as NYSE, Nasdaq or Amex.
* Cryptocurrency Exchanges : You can also obtain coinbase coins via other cryptocurrencies sold or removed (removed) from the market.
* Mining Pools
: Some Coinbase users can be part of the mining pools, which are groups of individuals who collect their resources for mining cryptocurrencies. In some cases, you can buy coinbase coins directly from these mining pools.
2.
* Cold Storage : Coins are kept in “cold storage” (offline) accounts that use advanced security measures to protect them.
* Hot Storage : Coins can be stored in online wallets or digital currencies with faster access time.
Conclusion
In summary: Coinbase is making money with a combination of fees and interest in stored cryptocurrencies. While the company does not minimize new coins like Bitcoin or Ethereum, it purchases existing ones from various sources on the open market. Understanding how Coinbase works and what happens to the coins that are purchased on the platform can better evaluate the internal functioning of the digital currency ecosystem.
Legal Declaration : This article only serves information purposes and should not be considered as investment advice. The cryptocurrency market is inherently volatile and the value of the coins can fluctuate quickly. Always do your own research and consult a financial advisor before making any investment decision.