The first blockchain to benefit from functioning sharding, Zilliqa’s ground-breaking scalability makes it a powerful and intriguing crypto project to watch out for.
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Read on to find out about Zilliqa and how it works or jump ahead to our step-by-step buyers guide if you’re ready to buy Zilliqa (ZIL).
What is Zilliqa?
Billed as a third generation blockchain, Zilliqa was developed with the aim of addressing one of the biggest problems associated with older cryptocurrencies: scalability.
It does this by using a hybrid consensus protocol that increases throughput with every additional 600 nodes in the network, thus ensuring that the throughput rate scales up as Zilliqa’s network size increases.
Zilliqa’s native token is Zillings (ZIL), which is used to pay for transactions and run smart contracts.
How does Zilliqa work?
Zilliqa’s impressive scalability is achieved by using a database partitioning technique called sharding. This involves dividing the network into groups of 600 nodes. Each of these groups is called a ‘shard’ – effectively a mini-blockchain. By dividing the work done on the network across multiple shards Zilliqa achieves much faster throughput of transactions than singular blockchain networks. Throughput will increase with each additional shard.
How to buy Zilliqa online – step-by-step guide
Step 1. Get a suitable wallet
Before you decide on where to buy Zilliqa, you will need to find a reputable wallet. Zilliqa has recently shifted from ERC-20 ZIL tokens to native ZIL tokens, which means you’ll need to find a ZIL-compatible wallet. Here are a few options to use after you buy ZIL coins:
- Ledger Nano X: One of the safest options for storing your ZIL tokens is the Nano X hardware wallet from Ledger. It’s not the cheapest wallet out there, but if you’re serious about security, it’s one of the best.
- Moonlet Wallet: An extension for Chrome that supports both ERC-20 and Zilliqa native tokens. The Moonlet Wallet was developed with the help of the the Zilliqa grants scheme, which aims to assist Zilliqa adoption.
Step 2. Find an exchange to buy Zilliqa
The next step to securing those ZIL funds is to find an exchange to buy Zilliqa coins. There are plenty to choose from, so to narrow your search and save you some time, we’ve picked out a couple of our favourite places to buy ZIL:
- Binance: Binance is the world’s biggest crypto exchange. But, while it offers a huge crypto marketplace with competitive fees, you won’t be able to buy using Fiat currency, so you’ll have to acquire Bitcoin or Ethereum in order to exchange it for ZIL.
- KuCoin: KuCoin has five-million worldwide users and is one of the more advanced trading platforms out there, but don’t let that put you off if you’re new to the game as it’s simple to use, safe and can be accessed via a desktop computer or via Android and iOS phones.
Step 3. Withdraw your Zilliqa
It’s a good idea to withdraw your ZIL funds from the exchange as soon as you’ve acquired them – it’s much safer to keep cryptocurrencies in a digital wallet than on an exchange.
How to trade Zilliqa – step-by-step guide
If you’re only interested in trading rather than buying Zilliqa, you don’t really need to set up a wallet – you’ll simply be predicting whether the price of ZIL will go up or down.
Step 1. Find a broker to trade ZIL
Finding a broker is easy if you know where to find them and what you’re after. However, it’s well worth having a look around and doing some research before you commit to one as they all offer different perks and levels of support.
We tend to go for more established brokers such as Plus500 or eToro as they have been around for a while and are easy to get to grips with.
Step 2. Deposit money
Once you’ve chosen a broker, you’ll need to put some cash down as a deposit. The process is fairly straightforward and minimum deposit requirements are usually pretty low, so you can start with a relatively small bankroll.
Step 3. Decide how you’d like to trade
There are two main ways to trade cryptocurrencies: spread betting or CFDs (contracts for difference). While there are some differences, both methods require you to take a position on whether you think the price of your chosen cryptocurrency will rise or fall over a set period of time. If you’re just starting out, it might be worth doing some research on spreads and CFDs before you jump in.
Step 4. Start trading
Once you’ve put down a deposit, you’ll no doubt be raring to go, but we recommend you set up a demo account with your broker before you start trading for real. It’s easy to win and lose money very quickly when trading, so it makes sense to get a feel for the platform you’ve chosen as well as the ebb and flow of the cryptocurrency market.
In essence, all you need to do is take a position on whether the price of your cryptocurrency will increase or decrease. If you think it will increase take a long position (buy) and if you think it will decrease, take a short position (sell).
You may opt to take advantage of leveraged betting, which is a feature of most trading platforms. Leverage enables you to put down a fraction of your trade’s total value as a type of deposit called a ‘margin’. However, this is a high-risk strategy, so it’s probably not for beginners. Experienced traders understand this and use stop loss orders to mitigate risk.
Still undecided?
- Zilliqa is the first crypto platform to use sharding technology
- Solves the problem of scalability
- Unplanned ICO showed that the project has considerable support
- Ethereum’s planned adoption of sharding technology means Zilliqa won’t be alone in solving the scalability problem
- Growth hasn’t lived up to the hype surrounding Zilliqa
- Probably not a great short-term investment
