If you haven’t read my feature on “What is Cardano Used For?” here’s a summary of the popular cryptocurrency:
Cardano is pretty sweet.
The cutting-edge digital asset touts itself as a “third-gen crypto” (Bitcoin > Ethereum > Cardano), and honestly, it has the chops to back up that claim. Its white paper was peer-reviewed by a panel of global experts, it’s capable of speeds 200,000 times faster than Bitcoin, and it's way, way friendlier to the climate than its forebears.
Cardano may very well be the crypto of the future, so you might be wondering: “How can I get some?” Let’s investigate how to buy Cardano, where, and whether you should buy it in the first place.
The Short Version
- You can buy Cardano on most major exchanges, but you should pick one based on your specific needs.
- There are many ways to pay for your Cardano, including Apple Pay, Google Pay, debit cards and even credit cards, but the best way to pay is by old-fashioned ACH transfer.
- You can't mine Cardano, but you can stake it. The staking pool you choose will depend on a number of factors including the expected APY.
Where to Buy Cardano Crypto in the USA
As the eighth most popular crypto by trading volume, you can buy Cardano (ADA) just about anywhere you can buy Bitcoin and Ethereum.
So, that’s where you can buy ADA.
Where should you buy it?
It depends on what you’re looking to get from your trading experience. Do you want the lowest possible fees? Something simple and beginner-friendly? Or maybe somewhere where you can ask the community about staking pools?
Here are options for all three:
For the Lowest Fees, at All Costs: Binance.US
Binance.US is the “lite” version of Binance global, the largest crypto exchange in the world by trading volume. The U.S. needs its own “lite” version because big Binance didn’t exactly jive with regulators.
More on that in my Binance.US review, but here’s the bottom line: if you can stomach a shady corporate culture in exchange for crazy low buying fees, Binance.US might be your best bet for buying Cardano. It’s also a great destination for frequent day traders because you won’t get peppered with high fees as you constantly adjust your positions.
For Ease of Use and Security: Coinbase
Coinbase is like the Toyota of crypto exchanges; it may be short on fancy features, but it’s safe, reliable, and beginner-friendly. The platform makes it super easy to stake your Cardano in just a few clicks. You pay a higher trade fee for all of this safety and convenience, but countless millions of crypto beginners have found this a worthy tradeoff.
Read more >>> Coinbase Review 2022
For Social Trading: eToro
Cardano trading and staking can get a little complex, so if you want to connect with other traders on your investing journey, consider buying ADA on eToro.eToro shares DNA with Facebook and Instagram, allowing you to “follow” other traders, like their content, and even automatically copy their trading activity in real-time using CopyTrader. CopyTrader is also a great tool if you’re unsure when to buy ADA since you can piggyback on the surgical timing of the pros.
Which Payment Method Should You Use?
Which method should you use to fund your account and purchase ADA?
Well, what options are there?
Coinbase offers the best visual breakdown of the most common funding options, their speed, and what kind of investment they’re best for.
And yes, believe it or not, you can now buy crypto with Apple Pay, Google Pay, and PayPal. Some sites even let you use a credit card. Not long ago, your only option was an ACH transfer directly from your bank account.
That all being said, an ACH transfer remains your best option. For one, it’s typically the option with the lowest fees. Second, most credit card companies won’t even let you purchase crypto with one of their cards since they perceive it as an illicit cash advance at best and a fraud risk at worst.
Plus, using your credit card to buy crypto can raise your credit usage, which might negatively impact your credit score. So to use a phrase rarely uttered in crypto circles, the old way is still the best way.
How To Store Your Cardano
Once you’ve purchased some ADA, you face the same tough choice you’ve encountered at the Starbucks counter: Hot or cold?
Specifically, should you stash your ADA in a “hot wallet” connected to the internet? Or a “cold wallet” that’s totally disconnected from the internet for security?
Technically speaking, you aren’t stashing your ADA itself — which lives on the Cardano blockchain — but rather, your private keys to access your ADA.
Our general guide to helping you choose between a hot wallet and a cold wallet still applies. There aren’t any special considerations for Cardano, considering many cold wallets like Ledger let you stake your ADA straight from your wallet’s dashboard. Check out my full review of Ledger and why I gave it a 9.5.
At the end of the day, all that matters is that you know how to access your ADA when it’s time to trade or cash out. Save all of your passcodes and recovery phrases somewhere safe.
How To Mine Cardano
You can generate passive income from your Cardano holdings. It’s pretty straightforward, but it may not be like the process you’re familiar with.
So how do you mine Cardano?
Step 1. You can’t.
Cardano uses a proof of stake protocol, meaning it doesn’t rely on “miners” to sustain the blockchain and validate new transactions. Instead, it depends upon “validators” who make deposits of ADA back onto the Cardano blockchain. This process is called staking.
Staking ADA is a bit like buying stock: You invest in the company, and the company kicks back regular dividends.
As our primer on Cardano mentioned, the Ouroboros protocol rewards everyone who “invested” their ADA with a tiny trickle of additional ADA at the end of each five-day epoch. The expected ADA you can earn through staking at a given time is represented by an APY (annual percentage yield), and in 2022 it’s hovering around 3.75% to 5%.
Now, anyone with staking/mining experience will want to know how many Cardano coins there are. After all, after the last ADA is rewarded, no more will be left. The community must develop something clever to keep folks invested (literally and figuratively).
Luckily, there is 45 billion ADA total, and just 33 billion have been awarded so far. So the team behind Cardano has plenty of time to think of a long-term rewards system.
How To Stake Cardano
There are two ways to stake Cardano: beginner and advanced.
The beginner method couldn’t be more straightforward. As long as your chosen exchange supports staking (which Binance.US, Coinbase, and eToro all do), just click on your Cardano and click “stake.”
Some exchanges like Binance have required lockup periods such as 30, 60, or 90 days. They also may charge a small fee on your earnings. These are the two drawbacks to the beginner method, but for most folks, it’s worth it for the convenience.
The advanced method involves downloading one of two hot wallets — Daedalus or Yoroi — moving your ADA and manually choosing one of 2,500 “stake pools” to stake your ADA. This method can be more profitable than letting an exchange pick your pool but involves researching which pool has the best mix of ROA (return rate), pool size, costs, and more.
Should I Buy Cardano?
Now that you know how, should you buy Cardano/ADA?
Cardano is a fascinating and promising crypto — there's no denying that. But crypto as an asset class is still extremely risky and should never make up more than 5%, or a maximum of 10%, of your overall portfolio.
For a deep dive on why investing in crypto is still so risky — and what every investor should know first, check out my complete guide on Should You Invest in Bitcoin? (Deep Dive on the Risks in 2022).
- Is It Too Late To Invest in Cryptocurrency?
- What Does HODL Mean in Crypto & Stocks?
- Why Are There So Many Cryptocurrencies?