How to Buy Cardano
What Is Cardano?
Cardano is a decentralized blockchain platform.
This proof of stake (PoS) platform is widely considered to be more ‘green’ and efficient than many proof of work (PoW) platforms.
PoS platforms are more environmentally friendly than PoW platforms, and they also enable quicker and cheaper transactions.
Ada coin holders can stake their coins for the right to verify transactions and earn transaction rewards.
When compared with Bitcoin, Ada uses much less energy at the cost of less decentralization.
Ada is the cryptocurrency token linked to Cardano. This is different from the likes of Ethereum and Bitcoin, where the platform and token have the same name that are used interchangeably.
At the time of writing, the price of Ada has increased by more than 1,000% during 2021.
The vision for Cardano is to create “a blockchain platform for changemakers, innovators and visionaries, with the tools and technologies required to create possibility for the many, as well as the few, and bring about positive global change”.
Why Buy Cardano?
Like Ethereum, Ada has an industry value and an intrinsic use that can help to provide stability.
The Cardano platform was founded on peer-reviewed scientific research and was created by Ethereum co-founder and mathematician Charles Hoskinson. The entire Cardano project was informed by academic research.
All platform integrations and implementations were researched, mathematically modeled, tested and challenged prior to development.
Cardano was developed using the programming language Haskell. It is built upon a consensus protocol known as Ouroboros.
Cardano says that this allows the blockchain to address one of the main challenges faced by early generation blockchain networks: high transaction fees brought about by increased transaction volumes.
As well as faster processing speeds, Cardano aims to save money on energy costs by streamlining its transactional processes.
As with all cryptocurrencies, Cardano is volatile.
In 2020, its value grew by more than 800%; therefore, many investors consider its volatility as an opportunity.
At present, the Cardano platform can handle more than 250 transactions per second.
Cardano says its blockchain will bring opportunities outside of finance, setting it apart from other cryptocurrencies. It has identified potential opportunities for the blockchain to be used by the agriculture, education, government, healthcare and retail sectors.
How to Buy Cardano
Decide What Type of Investment You Want to Make
If you are new to cryptocurrency or you just want to test the waters, consider using a well-known cryptocurrency to fiat exchange.
If you are an experienced trader investing in multiple currencies, consider a cryptocurrency to exchange.
You can either invest in Cardano Ada directly or as part of an index portfolio.
The simplest option is to buy it as part of an index portfolio.
This means you invest in several different cryptocurrencies, so you are not investing all of your money in one type.
There are more than 4,000 different types of cryptocurrency available at the time of writing; therefore, it is sensible to spread the risk.
If you decide to invest in an index portfolio, you will need to decide how many other cryptocurrency coins to buy and the ratio of Cardano in comparison to your remaining portfolio. You will need to work this out each time you invest in Cardano.
Calculate How Much You Can Afford to Invest
Each cryptocurrency exchange sets out its own minimum purchase amount; therefore, you will need to consider this when choosing a platform.
Consider Trading Fees
These might include deposit fees, withdrawal fees and trading fees.
Choose Your Exchange
If you have decided that you want to exchange your dollars for cryptocurrency tokens, you will need to identify the best cryptocurrency exchange for your needs.
There is a wide range of US and global cryptocurrency exchanges to choose from, each with its own advantages and disadvantages.
Look for an exchange with positive user reviews. When choosing an exchange, it is important to be wary of scams. If an offer looks too good to be true, it probably is.
You might consider using one of the following:
If you are a new crypto trader, eToro is ideal.
This highly regulated broker provides a simple and intuitive platform with access to some of the most popular coins.
Renowned for its CopyTrader technology, this feature allows you to copy the trading moves of professional traders.
Choose a professional trader from the community and click the 'copy' button to instantly copy your chosen trader’s future moves. To use this feature, you must make a minimum deposit of $200.
For a basic account, US traders must make a minimum deposit of $50.
Robinhood is the perfect choice for crypto traders who want to keep track of their trades on the go.
It is only available on mobile; therefore, there is no desktop version.
Safe, intuitive and well-designed, this is a straightforward platform if you want to trade cryptocurrencies, ETFs, stocks and options.
Another good option for experienced traders, Interactive Brokers offers bonds, cryptocurrency and stocks.
For most traders, there is no minimum deposit, although this depends on your account type.
Setup is complicated, and it can take some time to receive confirmation of your account.
This platform offers high-quality educational resources for registered users.
Both desktop and mobile platforms are available, although they are difficult to navigate at times.
With more than 4 million users, this is one of the most popular cryptocurrency exchanges. It is a great option whether you are a novice or experienced trader.
As a pure cryptocurrency exchange, this platform sells a wide range of coins.
When buying coins through Kraken, you own the coins. This means you can store them, move them and use them to make payments online.
However, this platform does not offer a zero-commission fee structure, and you cannot make deposits using Paypal or a credit card.
If you sign up to Kraken, you will need to consider the crypto dealing fees, deposit/withdrawals fees and margin fees.
Great for beginners, you can use this broker to buy and sell ten cryptocurrencies, including Cardano.
Reliable, fast and easy to use, this platform offers good payment options and a highly regarded support team.
However, the verification process is tight, and fees are high, depending on which account level you choose.
CoinMama does not provide users with an online wallet for cryptocurrency, and it does not store or invest funds.
You will need to set up and secure a self-hosted wallet.
The minimum allowed cryptocurrency transaction is $50.
What are the Simple Steps to Buying Cardano?
If you want to open an account with a cryptocurrency exchange, you will need to provide evidence of your personal details and identification as part of the registration process.
Once you have registered, follow these steps to buy Cardano:
Step #1: Choose Your Wallet
As a relatively young cryptocurrency, there are limited cryptocurrency wallet options for storing Cardano Ada.
The simplest option is a software wallet like Atomic or Exodus. This type of wallet allows you to store Ada alongside other cryptocurrencies.
If you want to use the official Cardano desktop wallet, download Daedalus.
Available for both Windows and Mac users, this is an open-source crypto wallet that is designed to grow with the Cardano community.
If you want a secure solution, choose a hardware wallet such as Ledger or Trezor. These wallets store your private keys online on a hardware device.
This option is more resistant to hacking than software wallets, which must be connected to the internet.
Step #2: Find Your Cardano Address
After setting up your wallet, you will need to find your ADA address. This is a long string of letters and numbers, starting with the letter D.
It will look much like this:
Step #3: Invest in ADA Using Your Chosen Exchange
Once you have completed the registration process, navigate to the appropriate section of the site to trade Ada.
Choose the amount you wish to trade and select your chosen payment method.
As cryptocurrency pricing is often volatile, it can be difficult to find the correct price.
Most exchanges allow debit or credit card payments; however, it is important to double-check.
Review and confirm your order details to finalize the transaction.
Step #4: Withdraw ADA to Your Wallet
After you have finished purchasing Ada, move the coins into your personal non-custodial wallet (this should be a coin that provides access to your private key).
Do not leave your coins on the exchange, for this increases the risk of fraud and theft. As soon as the coins arrive into your wallet, you have completed the process of purchasing Cardano.
As a relatively new cryptocurrency, investing in Cardano remains a gamble. It faces fierce competition from the likes of EOS, IOTA and Ethereum.
That said, Cardano has many interesting aspects which work in its favor. As it becomes more popular, it should become easier to buy, sell and store Cardano.
To minimize risk, always use a stable and established trading platform to manage your Cardano investment.
WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.