So you want to get involved. You want to buy some Bitcoin, Ethereum or Litecoin. What do you have to do?
There are two main ways in which you can buy cryptocurrency on these platforms. First is by using a credit / debit card and second is by making a bank transfer. The fees are lower for a bank transfer, but it takes longer for the money to reach your account (a few days), whereas with a credit / debit card, the transaction takes place very quickly.
As mentioned above, the fees are different depending on the payment method. If you choose to pay by bank transfer, there will be an initial, one-time only fee when your bank account gets verified. If you choose to pay by credit / debit card, there is a 3.99% fee every time you buy a cryptocurrency. So if you want to invest £300, you will only get Bitcoin worth £288.03 as the £11.97 is the transaction fee charged by Coinbase / Bitpanda.
Because you will have to link your bank account to your Coinbase / GDAX / Bitpanda account, you will need a formal ID verification using your passport or driving licence. This process was a hassle for me and the best platform in this case was Bitpanda, which got me verified within a day. However, they have the standard transaction fee of 3% and you would also have to pay for the conversion rate from GBP to EUR, as Bitpanda is for European customers and works in Euro.
GDAX needs two forms of ID verification, unlike Coinbase or Bitpanda which only need one.
GDAX is the way to avoid the transaction fees
GDAX is a fiat exchange platform owned by Coinbase. The main difference between Coinbase and GDAX is that it is much easier to buy on Coinbase – the user interface is simple and straightforward.
However, the fees on GDAX are much lower than on Coinbase and in terms of transaction fees, this is probably the cheapest place to buy cryptocurrency using fiat.
You can see that the transaction fee is topped at 0.1%, compared to 3.99% on Coinbase. So GDAX is definitely the place to buy.