Cardano is an open-source decentralised public blockchain and cryptocurrency. Traders looking for new and lesser-known coins have had their eye on this one recently. This guide will show you how to buy and trade Cardano (ADA) in 2020.
Where to buy Cardano
Read on to find out about Cardano and how it works or jump ahead to our step-by-step buyers guide if you’re ready to start investing.
What is Cardano?
Cardano is both a platform and a cryptocurrency (ADA). Once launched, the platform will be used by individuals, private companies and even governments to run smart contracts and other financial applications. The Cardano team are working on ADA. They then hope to complete the part that will handle smart contracts. The platform will also be able to run decentralised apps (dApps), which will operate on a blockchain.
How does Cardano work?
Cardano ADA uses a Proof-of-Stake algorithm to mitigate the problems associated with energy inefficient Proof-of-Work algorithms.
The Cardano coin, ADA, was created for users of the Cardano network to send and receive funds without the need for third parties, such as banks and other traditional centralised financial institutions. This way, transactions are more private and secure.
How to buy Cardano online – step-by-step guide
Step 1. Get a suitable wallet
There are loads of ADA-compatible wallets to choose from, so we’ve listed our top three to narrow down your search:
- Ledger Nano X: If you’re into security, you should take a look at the Nano S. It’s not the cheapest storage option out there, but if you’re serious about keeping your funds safe, it’s a worthwhile investment.
- Daedalus Wallet: if you’re not looking for a hardware wallet right now, the next best option is a desktop wallet, and Daedalus is a dependable pick.
- AdaLite Wallet: We also like the Adalite web-based wallet for its convenience and ease of use.
Step 2. Find a Cardano exchange
Looking to buy ADA? You’ll need to find a good exchange. Here are a couple of our favourites:
- Binance: One of the biggest players in the game, Binance is usually the first place we check when looking for cryptocurrency.
- Coinex: If you need an alternative to Binance when looking for ADA, we can recommend Coinex. Once you’ve signed up and logged in, this popular exchange is easy to use.
Step 3. Withdraw your Cardano
It’s important to protect your funds. With that in mind, it’s a good idea to withdraw your cryptocurrencies from the exchange once you’ve acquired them. It’s much safer to keep them in a wallet.
How to trade Cardano – step-by-step guide
There’s no need to download and set up a digital wallet if you’re only interested in trading. You’ll be speculating on the value of your cryptocurrency rather than buying and owning it.
Step 1. Find a broker
When you are on the lookout for somewhere to trade cryptocurrency, make sure you pick a reputable and trustworthy broker. When it comes to trading Cardano, you have a few options. We like Avatrade, which is especially good for new traders thanks to their low spreads and great customer support.
Step 2. Deposit money
When you’ve chosen your broker and decided you’re ready to trade, you’ll need to put down a deposit. Typically, minimum deposits won’t break the bank if you’re serious about trading.
Step 3. Decide how you’d like to trade
There are two ways to speculate on cryptocurrencies – spread betting and CFDs (contracts for difference). Whichever one you pick, you’re effectively predicting whether the value of your cryptocurrency will go up or down. If you’re not sure which route you want to take, it might be worth doing some more research and finding out a bit more about spreads and CFDs.
Step 4. Start trading
If you’re a complete beginner, it’s worth setting up a demo account with your broker before you start trading for real. This will give you a good feel for the way trading works as it can take a while to get used to the way cryptocurrency values fluctuate. As you’ll see, cryptocurrencies are highly volatile and difficult to predict so it’s easy to win and lose money quickly.
Whether you’re on your live account or still in practice mode, trading involves taking a position on the price of your chosen cryptocurrency – essentially betting whether it will rise or fall in value. If you think it will rise, take a long position (buy), if you think it will fall, take a short position (sell).
Depending on the type of broker you choose, you may also be able to add leveraged trading to your strategy, but you should proceed with caution as this is a high risk move. Leveraged trading allows you to lay a fraction of the value of your trade in the form of a ‘margin’.