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If you’re new to cryptocurrency, figuring out how to buy ADA might feel like a daunting task. There’s several wallets to choose from, quite a few exchanges to sift through, and a passionate community telling you to “STAKE! STAKE! STAKE!” — when you might not even know what “stake” means.
Trying to absorb all that info might feel like you’re just floating in the vast expanse of information, completely lost.
Don’t worry! I began the journey into the unknown without having a clue as to what I was doing, and I came out just fine! This guide will help get you get started.
Three Steps, Two Rules
On this journey of exploration, I’ll try to keep things brief, rather than overload you with information.
The Three Steps:
- Create a Cardano Wallet
- Find a good exchange that sells ADA
- Stake your ADA from your wallet
The Two Rules:
- Do not keep your ADA on an exchange
- Do not stake your ADA on an exchange
Step One: Create a Cardano Wallet
You should always store your crypto in your private wallet.
Rule #1: DO NOT keep your cryptocurrency on exchanges!
Cardano has two recommended software wallets you can choose from: Daedalus or Yoroi.
But, if you really want to beef up your security, you can buy a hardware wallet that works for storing ADA: Trezor or Ledger.
Helpful Links:
- How-to guide for connecting your hardware wallet to Daedalus here.
- How-to guides for connecting your hardware wallet to Yoroi here and here.
- More information about the difference between software and hardware wallets can be found here.
CAUTION: Make sure you ONLY download either of these wallets through Cardano’s website. There are a lot of scams out there that you’ll want to avoid. As of Feb. 27, 2021, Daedalus does NOT have a phone app, so make sure you don’t try to install a fake app on your phone.
(special thanks to Kefin on the Cardano Community Discord for reminding me to add this tip).
Step Two: Find An Exchange That Lists ADA
There are many exchanges out there. I was someone who previously only felt comfortable using Coinbase. But, since ADA isn’t currently listed on Coinbase, I had to explore other crypto exchanges. Needless to say, not all exchanges are built the same. I like to categorize exchanges into three groups: Good, Meh, and Sketchy.
Good Exchanges
I’ve personally used Kraken and Binance and was satisfied with them.
Note: I’m not endorsing either of these exchanges, nor am I saying they’re the only good exchanges out there. But, I used them when I wasn’t very experienced, and found that they were easy enough to navigate. They also allowed me to buy and send ADA without hassle, which I can’t say for all the exchanges I tried.
Others who I’ve spoke to have suggested Bitfinex is a good option, but I haven’t personally tried it out.
Helpful Links:
Meh Exchanges
These exchanges are not necessarily nefarious, but I wouldn’t recommend them. That’s because they allow you to purchase ADA, but they do not allow you to send ADA (remember Rule #1!). Meaning, if you use them to buy ADA, you’re forced to keep it on their platform.
Sketchy Exchanges
There are a lot of exchanges out there that you will want to avoid. Maybe they have ADA, and maybe they allow you to send ADA, but they still might not be trustworthy. Because I don’t have experience using the sketchy one’s I’ve been warned about, I’m not going to call them out in this article. But, you can read about some horror stories here.
Rule #2: Don’t Stake ADA on Exchanges!
If you listened to Rule #1, Rule #2 is redundant. Because, in order to stake your ADA on an exchange, you must keep it on that exchange (i.e. you are not sending it to your private wallet).
Yet, sometimes it might seem tempting to just let the exchanges handle the staking process for you. Fight the urge!
ADA’s staking process will be discussed in more detail below, but all you have to know now is that it is very easy and safe to do. Yet, sometimes crypto exchanges like to pretend it’s not:
example:
eToro takes great care to protect our users’ cryptoassets against exposure to any additional risks, sparing them the hassle and complication of staking on their own. In return, eToro retains a small percentage of the yield to cover the various operational, technical, and legal costs involved (source).
Once you understand how staking works, you’ll realize how laughable that quote is. Many exchanges want you to stake with them, specifically because they use their own stake pools (hence earn profit), then take an additional % of your rewards.
You should always be in control of your ADA. That means keeping it in your own wallet, selecting the stake pool you want to join, and keeping 100% of the staking rewards you earn.
Step Three: Stake Your ADA From Your Wallet!
I had no idea what “stake” meant before I began investing in ADA, but I quickly found that it’s not too hard to understand. You’ve probably heard of crypto mining, right? Well, staking is similar to that process (in the sense that by participating, you have the opportunity to earn rewards in the form of cryptocurrency — in this case, ADA). I’m not going to go into the difference between mining and staking, but you can read more about it here.
Essentially, the process is pretty simple.
- You select a pool.
- You delegate your ADA to that pool.
POOF! You’re done. Check back in on the pool every now and then to make sure you’re still earning good rewards.
Here are some helpful guides that will walk you through the process, specific to your wallet:
- How to stake ADA using a Daedalus wallet
- How to Stake ADA using a Yoroi wallet
You’ll probably want to read up on how to select a stake pool that’s a good fit for you. This is less of a factor if you don’t own a lot of ADA, but it’s still important to know for the future.
Read this to help understand which pool to choose:
- How to choose a staking pool.
A Closer Look At Staking
You probably have questions! Is it safe? What’s the financial return for staking? Rather than reinvent the wheel, I will direct you to a great resource for FAQ’s.
Summary:
If you’re new to buying cryptocurrency, it might seem like it’s a difficult task, but once you begin to learn the in’s and outs’, you’ll see it’s not so bad. Make sure you take the necessary steps (follow the rules) to secure your crypto! Don’t get taken advantage of!
More Helpful Links:
The Cardano community is pretty cool. You can learn a lot from chatting with people and watching videos. I’ve included some Discord groups, Reddit Communities, and YouTube Channels that were helpful for me (I’m not officially affiliated with any of them, just a member/subscriber).
Discord
- Cardano Community: https://discord.gg/DuUPkSqk
- Cardano Fans: https://discord.gg/wptMsH44
- The Home of Cardano: https://www.reddit.com/r/cardano/
YouTube
- IOHK: https://www.youtube.com/channel/UCBJ0p9aCW-W82TwNM-z3V2w
- Cardano Foundation: https://www.youtube.com/channel/UCbQ9vGfezru1YRI1zDCtTGg
Note: This article is entirely comprised of the author’s own personal opinions. No sources, companies, or other affiliates referenced in the reading have endorsed or sponsored this article. I’m not an expert and this is not financial advice. Use this guide as one of many sources you use to gain information about cryptocurrency.
