Beyond Coinbase -- A Crypto Newbie's Journey and Learnings
Goal of this Post
Talk about my journey into crypto, and explain to other crypto newbs who are only using big exchanges how to save fees and invest in smaller market coins that have not yet hit those exchanges. This isn't financial advice, it's more just how as a US citizen can you get access to coins that aren't on Coinbase. I also hope to get feedback on what I am still doing wrong, since I am still very much a newbie. Also hopefully some people will just enjoy reading about it.
Backstory (skip to Lessons Learned for TLDR)
I'm someone who was holding 0.5 ETH in since 2017 in a Coinbase account that I never checked. I'm a software engineer who had initially dismissed crypto as too complicated to become mainstream. In the last few weeks though I decided I wanted to deep dive into crypto, better understand blockchain technology, and in particular try to figure out if Play-To-Earn is really the future of videogames or not.
I started off by first trying to understand how Bitcoin and Ethereum work, and what Ethereum's transition to Proof of Stake means, and what a smart contract is. I'd recommend running through a free course or two online as a way to jump in. I used this Coursera course to start off. There are a ton of other options though, so pick one! Learning more about Ethereum made me really bullish on Ethereum, so I bought some the only way I knew how -- using Coinbase. I already had it hooked up to my bank account, so it was easy.
Then I joined this subreddit, and quickly got hooked. I want some ONE, and TRAC, and ALGO. I want to throw a little bit into some memecoins like ELON. But wait, some of these aren't on Coinbase, what do I do? First I started using Coinbase Pro, then I figured out using KuCoin, and then finally made a MetaMask wallet and figured out using exchanges like Uniswap and Pancakeswap. I wanted to summarize my findings here for other newbies who are stuck on Coinbase and typically just wait for Coinbase to support a coin before investing in it.
Lessons Learned
- Coinbase Sucks. It's really great as a newb-friendly platform for people who are just getting started in crypto investing, but the fees are really high, and in some cases hidden. For example, when you transfer between crypto types, it shows you that the fee is $0, but you are getting a poor exchange rate and as soon as the transfer is complete you'll notice the full $ amount is not reflected after the change.
- Coinbase Pro is Better. It's interoperable with Coinbase, and has way lower fees. It supports limit transactions for more advanced trading, has more coin options available, and the only downside is that the user interface is worse and more confusing.
- Transfer to other exchanges using XLM (Stellar). XLM is incredibly fast and has near-zero fees. If you need to get your assets out of Coinbase and into another exchange, first convert them to XLM, then you can transfer to another exchange like KuCoin or Binance.
- ETH Gas Fees are Insane, use BSC (Binance Smart Chain) if you can instead. For many small market coins, they are either available only through BSC or they are available on both ETH and BSC. Transfer to BSC using XLM, trade your XLM for BNB, and buy your small bags of small market coins using BNB.
- Play-to-Earn Does Not Mean Fun. Many play to earn games, especially those on the WAX platform, are hardly games at all (looking at you Alien Worlds). They're just idle clickers in some fashion with massive upfront investment costs (looking at you Farmer's World!). A lot of the P2E space feels like cash grabs for limited edition NFTs that entirely rely on hype and FOMO to sell. There are a few real games (Axie Infinity, God's Unchained) in the space, and these have a ton of potential in my opinion. But all in all it seems like a lot of gaming companies in the P2E space are just overhyping NFTs for games that are either not released or still in very early beta, and reaping tons of profits from these "limited edition" NFTs. The FOMO is real, and the FOMO is never ending, as there will be a never ending stream of "limited edition" NFTs now.
- Look up Staking for your coins. For instance, don't hold your ADA in Coinbase. Get an ADA wallet, and stake it!
- HODL! Especially ETH and BTC!
Helpful How-Tos for Coinbase Users:
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Buying on KuCoin (e.g. I want to buy some ONE!)
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Get some XLM on Coinbase.
- Transfer XLM to KuCoin (use Deposit button in KuCoin to get your XLM address and memo)
- Sell XLM for USDT on KuCoin.
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Buy ONE/USDT (or your other crypto of choice that's on KuCoin but not Coinbase) on KuCoin.
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Buying on Uniswap (e.g. FLOKI) -- this will have expensive gas fees!
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Get some ETH on Coinbase.
- Create a MetaMask wallet (https://metamask.io/) -- make sure you never share your recovery phrase with anyone ever. I like the Chrome plugin.
- Transfer your ETH to your Metamask wallet address. Prepare yourself to get owned by ETH gas fees. Try to pick a time of day when they are lower (google for this)
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Now you can use Uniswap by connecting your Metamask wallet. Note -- no website will ever ask you for your recovery phrase, ever.
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Buying on PancakeSwap using BSC (e.g. CATGIRL)
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Get some XLM on Coinbase
- Open a Binance (or Binance.us if you are in the US) account. You don't have to finish the identity verification process (my step #3 is still pending for almost 2 weeks now)
- Transfer the XLM to Binance
- Sell the XLM for USDT on Binance
- Buy BNB on Binance
- Open a Binance Chain wallet
- Transfer the BNB to your Binance Chain wallet using the Binance Chain Network (note: this transfer and subsequent transfers here will have fees, but they are very tiny compared to ETH gas fees)
- Transfer your BNB balance to the Binance Smart Chain using the Binance Chain wallet
- Create a MetaMask wallet if you don't already have one
- Add Binance Smart Chain to your MetaMask wallet (see Connecting BSC to MetaMask)
- Transfer your BNB balance to your MetaMask wallet.
- Now you can use PancakeSwap and transfer BNB for whatever BSC small market coin you want to nab (CATGIRL! Or maybe you want to play DogeDash)