Maybe you've heard about Shapeshift.io. It's a cryptocurrency exchange that works a bit differently from other, more traditional, crypto exchanges. If you use Coinbase to buy cryptocurrency with fiat currency you may be wondering how to use Shapeshift with Coinbase to make exchanges or buy altcoins. This shapeshift review and tutorial will hopefully answer your questions.
What is Shapeshift?
Shapeshift is a crypto-only currency exchange. This means that it doesn't work with fiat currency so you won't be able to use it to buy cryptocurrency with US dollars, Euro or any other government-issued currency. You can only use it to trade one token for another. Shapeshift definitely isn't the only crypto-only exchange out there. And some exchanges offer fiat trading besides crypto trading. However, unlike most other exchanges out there, Shapeshift is a non-custodial exchange.
What is a non-custodial exchange?
Most exchanges store user's tokens in wallets created by the exchange itself. If you buy bitcoin on Coinbase or Poloniex, those bitcoins are kept on exchange wallets until you withdraw them. This is controversial among crypto traders because exchanges don't give their users the private keys to those wallets, meaning users don't have full ownership.
Non-custodial exchanges work differently. These exchanges don't create wallets for their users. Instead, users must use their own wallets to receive tokens. This makes it possible to use Shapeshift not only with personal wallets but also with wallets from other exchanges, like Coinbase or Poloniex. In this review, you will learn how to use Shapeshift with Coinbase. Read on.
What are the advantages of Shapeshift?
When shapeshift started trading it offered anonymous exchanges. Users didn't even need to create an account. This is no longer the case. Since October 2018 users must create an account to use the exchange. So anonymity is no longer one of the advantages. But that doesn't mean that it doesn't offer any benefits.
As stated above, Shapeshift is a non-custodial exchange so you will use your own wallets to hold your coins. This is an advantage not only because your wallet is truly yours, but also for security. Since this type of exchange holds no currency, they are nor that attractive a target for hackers. Shapeshift was hacked back in 2016, but since then they have added new security measures.
Ease of use and speed:
Shapeshift has a very simple interface. Straightforward and with no distractions or complicated options to navigate. And transactions happen very quickly with a minimum of confirmations required. Even first time traders will have no trouble exchanging their tokens.
Typically, exchanges charge a fee from every transaction. Some charge flat fees, such as 1% on all trades. Others charge different fees depending on transaction type or the specific token being traded. Shapeshift is different. They charge no fees except for a miner's fee which is normally much lower than what other exchanges charge. The miner's fee varies according to cryptocurrency. For example, for Bitcoin, the miner's fee is 0.00056 BTC. For Ripple, it's 0.15 XRP. For Ethereum, it's 0.003 ETH. You can see the full list of miner's fees here.
Are there any Shapeshift limits?
As with all exchanges, there is a limit on transactions on Shapeshift. Currently, the limit for verified user accounts is 10,000 USD per transaction.
What about a Shapeshift alternative?
Although most crypto exchanges are custodial, Shapeshift is not the only non-custodial instant exchange out there. CoinSwitch and Changelly are alternatives to Shapeshift. There are differences among the three re altcoins listed, fees and trading time. Changelly supports fiat currencies, and CoinSwitch offers a larger list of supported tokens. All are solid, trustworthy, secure options for exchanging cryptocurrency. Read about them and select the most appropriate to your needs.
Now we'll move on to the tutorial section of this article…
How to use Shapeshift with Coinbase
If you've come here wondering how to use Shapeshift with Coinbase, you probably already have a Coinbase account and have used it to buy some cryptocurrency and want to use Shapeshift to make the trade.
If you don't have a Shapeshift account, the first step will be to create and verify one.
Create and verify a Shapeshift account:
- Head over to the Shapeshift home page and click on the “Sign Up” button in the middle.
- Enter your email address, select and confirm a secure password for your account, complete the CAPTCHA and click “Sign Up”.
- An email with an activation link will be sent to the address you provided. Open it and click the link.
- After activation, it will be time to start account verification. Type in your basic information: name, date of birth, phone number and address. Click “Continue”.
- The next step is to verify your identity. You can choose one of three documents to do so: government-issued ID, driver's license or passport. Select the type of document you want to use, fill in the document's number and click “Submit”. Then you will have to take pictures or upload scans of your document. After upload, verification should be done in a few minutes.
- After ID verification is complete, you will be asked to set up two-factor authentication (2FA). This is optional but highly recommended. Click on “settings” from the menu on the left and then “Setup 2FA” from the panel. Follow the instructions to complete this step.
After completing the steps above, you'll be ready to start trading.
How to use Shapeshift with Coinbase to make an exchange
Let's suppose you want to exchange some Bitcoin stored in your Coinbase account for some Ethereum, which will also be deposited to Coinbase (it could also be any other Ether wallet).
- Go to the Shapeshift.io home page. The box on the right is where you'll set up your trade. Click on the “Deposit” field and select Bitcoin from the list. Then click on the “Receive” field and select “Ether”. There are two kinds of trade allowed: Quick and Precise. The latter lets you have more control over the exchange, so click on “Precise”. Your screen should now look like the image. Click “Continue”.
- The following screen presents some useful information. You can see both the minimum and maximum amount of Bitcoin you can trade, as well as the miner fee for the trade. Here you will also fill in the amount of Bitcoin you will send. You must also fill in the address where you want your Ether to be sent and provide an address for refunding your Bitcoin in case the trade fails for some reason.
- Since we will be using Coinbase to both send and receive, let's head over to Coinbase, login and go to your wallets.
- Under your Bitcoin wallet, click on “Receive”. This will be your refund address. Copy it and paste it into the “Refund address” field on Shapeshift.
- Still on Coinbase, under your Ethereum wallet, click on “Receive”. This is the address Shapeshift will send your Ether to. Copy it and paste it into the appropriate field on Shapeshift.
- Fill out the amount of Bitcoin you want to trade and Shapeshift will show the amount of Ether you will get.
- After everything is filled out, agree to the terms and click “Start Transaction”.
- Shapeshift will now show you the address you need to send your Bitcoin to. Copy it and head back to Coinbase.
- On Coinbase, under your BTC wallet click on “Send”. Paste the address Shapeshift provided and send your tokens.
- After that, it's just a matter of waiting for Shapeshift to make the trade (it only takes a few minutes) and send your Ether to Coinbase. Receiving time will depend on token and network activity.
Congrats! You have now used Shapeshift to make a trade with tokens held on Coinbase.
Non-custodial exchanges like Shapeshift are a great option for trading crypto tokens quickly, often with lower fees. Since you decide which wallets you use with these exchanges, you can choose to use your existing personal wallets or your exchange wallets. Following the steps outlined here, you now know how to use Shapeshift with Coinbase.
Read Also: Best Shapeshift Alternative
Leave your comments or questions below!