Cardano is a “second generation” crypto-currency that is trying to solve a lot of the problems that plague Bitcoin. Similar to Bitcoin, it’s an open source crypto-currency that launched in September 2017. Cardano uses a token (the actual currency) called Ada. However, most people simply refer to it as Cardano.
Cardano is trying to differentiate itself from Bitcoin by being designed from the ‘ground up’ to deliver a secure and sustainable blockchain that can protect user privacy whilst allowing for regulation. It also hypes up that its been designed by academics and scientists who understand the needs of the marketplace.
If you want to get a head start, investing in Cardano will require two accounts:
- Coinbase – To easily buy Bitcoin (and get $10 free when you invest $100)
- Binance – To invest in Cardano (ADA) using Bitcoin
Get started opening those up and follow the directions below.
What Is Cardano?
Cardano was launched in September 2017 via ICO (initial coin offering) to be a better alternative to Bitcoin. The goal was to create a network that valued privacy and security, but at the same time meeting the needs of regulators as well.
As the currency has gained popularity, it’s value has risen dramatically. Cardano, like most other crypto-currencies, has seen it’s price spike in the recent months.
How Cardano Is Different
The big difference of Cardano compared to other currencies is that it maintains a two-tiered network, which allows for faster transaction processing time (similar to Dash)
Cardano’s multi-layer protocol performs advanced functions, and has at its foundation a settlement layer that is linked to a control layer. The settlement layer will have a unit of account, while the control layer will run smart contracts and will be programmed to recognize identity, assisting compliance.
It’s also focused on protecting privacy rights of users, while also taking into account the needs of regulators. This is unique in the crypto-currency space.
The advocates of Cardano see it as one of the best potential currencies to gain mainstream adoption due to it’s regulator friendly nature.
How To Invest In Cardano
As we mentioned earlier, Cardano is not “easy” to invest in. However, there are rumors that Coinbase will be adding support for Cardano (ADA) in the near future. If that happens, you can likely expect the price of Cardano to increase substantially as new investors will easily be able to purchase the currency.
However, today, you need to follow a strict process to buy Cardano, just like you have to do with Electroneum.
1. Create A Binance Account
The first thing you need to do is setup a Binance account. Binance is the place where you will hold your Cardano tokens.
Binance is a popular choice, because it allows crypto-to-crypto transactions from companies like Coinbase. It’s important to note that you can’t send money to Binance (or any other Cardano exchange currently), so you have to go to Coinbase -> Exchange (Binance) -> Cardano (ADA).
So, you’ll always need two accounts:
- Binance: which you can signup for here
- Coinbase: Coinbase gives you $10 in free Bitcoin when you signup and deposit $100 or more
Hopefully this changes soon, but that’s how it goes today.
2. Buy Bitcoin or Ether on Coinbase
Once you have a Binance account setup, you need to buy Bitcoin or Ether on Coinbase.
It’s very easy to do once you have a Coinbase account setup. You simply go to the Buy/Sell page and enter your information. Then, your Bitcoin will be in your wallet and you can move to step 3.
3. Transfer Your Bitcoin To Binance
Once you have your Bitcoin or Ether in your Coinbase account, you can transfer it over to Binance. This is also fairly easy to do.
In your Binance account, simply click “Funds” -> “Deposits/Withdraws”, and you can see all the different coins you can hold in your account.
In our case, we’re transferring over Bitcoin, so click on Bitcoin, and you’ll see a Wallet Address generate. Here’s what it looks like:
Once you have that address, you go back to Coinbase, choose “Acccounts”, and then “Send”. You’ll see this screen come up where you can send your Bitcoin to the address generated in Binance:
4. Buy Cardano
Once you have your Bitcoin in your account at Binance, you can finally buy Cardano (ADA).
At the top of the Binance homepage, you can click on Exchange -> Basic, and then on the right side, choose ADA/BTC:
Once you place your trade, it will show up in your Binance account.
Like any currency, there is a high degree of risk involved if you’re considering investing in Cardano. However, given the low price point, it does have the possibility for a high return with low barrier to entry.
If you don’t like the idea of a digital wallet and/or all of these steps, there are no ETFs that track Cardano yet. However, GBTC is an ETF that tracks Bitcoin, and you can get $5 for free when you invest at Stockpile and buy Bitcoin.
You never know, Cardano could skyrocket as high as Bitcoin is today, and you might be thanking yourself in several years. Even better, it could potentially be adopted as a more legitimate currency. But don’t get your hopes up – there is still extreme risk here.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.