This beginner’s guide answers those questions, discusses how to add ADA to your wallet, and offers tips for buying cryptocurrency successfully.
Table of Contents
What Is ADA?
Cardano is a blockchain-based platform designed to be more than just a peer-to-peer payment system.
Cardano’s goal and purpose is to support the development of applications and digital services through smart contracts and decentralized finance tools.
The token that resides on the Cardano network is Ada which serves as the digital currency that makes transactions on the blockchain possible.
So, what is ADA? ADA (all caps) is the symbol/abbreviation that crypto platforms use when listing the Ada token for sale or trade. This naming convention is similar to the Ethereum network that uses Ether as the name of their coin and ETH as the symbol/abbreviation.
How Cardano Works
The Cardano blockchain works by using the computing power of a widely dispersed network of computers running the Cardano protocol software in order to record digital transactions without the oversight of a central authority, such as a bank or government.
Through that process, the Cardano network maintains a decentralized, distributed digital ledger that verifies and records activities (e.g., sales, payments, trades, etc.) in blocks of various sizes.
Once the network agrees on and validates these transactions, the blocks cannot be altered in any way, nor can they be deleted from the chain. This immutability provides a secure and trustworthy record of ownership that isn’t controlled by one person, business, or entity.
The Cardano blockchain relies on the proof-of-stake (PoS) consensus method to validate and verify transactions on the network. Under the PoS model, participants in the transaction — and those doing the verification work — stake their tokens in order to qualify as validators.
Cardano History
Charles Hoskinson, the co-founder of Ethereum, began developing the Cardano network in 2015 as an alternative to his first blockchain (Ethereum).
Cardano launched in 2017 with the purpose of facilitating smart contracts and providing financial services to parts of the world where such services are complicated, time-consuming, and heavy with fees.
Cardano sees itself as a third-generation blockchain protocol that improves on both Bitcoin (the first generation) and Ethereum (the second generation).
The network is backed by three entities, each of which serves a different purpose:
Input Output Hong Kong (IOHK) (in the process of rebranding to Input Output Global) provides blockchain research and development
The Cardano Foundation focuses on core development and ecosystem growth
Emurgo (a Japanese venture capital firm) assists with researching and building the network’s planned phases of development
Cardano is currently in the third phase of its planned upgrades with two more set to drop in the coming years.
How to Buy Cardano (ADA)
1) Create an Exchange Account
When learning what Ada is and how to buy it, the first step in the process is finding a crypto exchange, such as Binance.US, that offers reasonable fees, a broad range of tokens and coins, and tools and information to help you make the right choices.
Partnering with an exchange allows you to buy, convert, or trade for Ada (ADA) — while enjoying the benefits of security and other advanced features, like recurring buy orders and real-time order books.
2) Fund Your Account
Once you've selected an exchange that supports Ada, like Binance.US, open an account and complete verification to get started.
Most exchanges will make this pretty simple and offer a variety of options for doing so. If you are using Binance.US, consider trying the Top Up feature, available only on the mobile app, to buy and sell USDT. You can then convert USDT for ADA, or trade ADA on the ADA/USDT Advanced Trading pair.
Before you sign up, we recommend verifying that the platform you’re partnering with offers the funding method you want. This will make it easier to fund your account when you reach that point.
3) Choose When to Buy
Once you’ve funded your account, you’re ready to buy, convert, or trade for Ada (ADA) by specifying the amount you want.
With most platforms, you can initiate the buy order manually, or you can set your account to initiate the buy automatically when certain conditions are met (e.g., time and/or price). Auto-Buy on Binance.US makes setting up a recurring buy on the schedule of your choosing easy. Simply open the Buy page, choose a cryptocurrency, and select Auto-Buy to set your recurring buy and choose your preferences.
Store ADA in a Crypto Wallet
Once you’ve purchased Ada (ADA), store the tokens in a crypto wallet for safekeeping. Crypto wallets fall into two categories: hot wallets and cold wallets.
Hot wallets are those that online cryptocurrency exchanges offer their customers. Cold wallets, on the other hand, store cryptocurrency offline (e.g., an external hard drive).
Choose the storage method that’s best for you.
Tips to Help You Buy ADA
1) Plan Your Approach
Before buying ADA — or any cryptocurrency, for that matter — make a plan and do your best to stick to it despite the ups and downs of the market.
Perhaps buying and staking ADA is the best option for you right now. Or, maybe you’re more comfortable buying and then day trading.
Whatever strategy you choose, resist the urge to deviate from the plan to follow some temporary hype into a losing position.
2) Research the Market
After learning about Ada (ADA) and planning your approach to buying the token, research the market — both the Cardano market and the entire cryptocurrency market as a whole — so you know how it all works and the factors that cause a price to rise or fall.
After you familiarize yourself with the Ada market, research the exchange through which you’ll purchase the tokens.
Be critical and ask questions such as:
What are the fees involved in buying ADA on this platform?
What benefits does the platform offer?
What problems does the platform solve?
Is the platform easy to use?
Does the platform provide me with the information I need to make decisions?
How many users does the platform have?
What do the users say about the platform?
Will this platform still be useful as my balance grows?
With this information in mind, you can avoid coins, protocols, transactions, and platforms that make grand promises but don’t have any real results to show.
3) Set a Limit on Losses
As you plan and research your next move within the cryptocurrency market, consider setting a limit on the losses you’re willing to tolerate.
When you set a number below which you don’t want your portfolio to fall, it will be easier to know when to withdraw from the market and avoid the losing position that can come from being swept away by emotion, adrenaline, and excitement.
4) Consider Other Tokens and Coins
Buying ADA exclusively may expose you to more risk than you want because the value of your portfolio is dependent on a single token.
Instead of building your portfolio on one cryptocurrency, consider adding other tokens and coins.
Even adding one other option to your ADA buy creates a more stable foundation in the event that one token or coin in your wallet starts to drop.
Explore Cardano (ADA) on Binance.US
With Binance.US, you can buy, sell, convert, trade, and even earn a staking rewards rate on ADA with ease.
Binance.US offers reasonable fees, a broad range of cryptocurrencies, and tools and information to help you navigate the world of crypto.
You can buy BTC with 0% fees on select pairs, ETH, BNB, ADA, and over 150 other cryptocurrencies. To get started, register for a Binance.US account online or download the Binance.US app.
Download the Binance.US app to trade on the go: iOS | Android
This material has been prepared for general informational purposes only and should NOT be: (1) considered an individualized recommendation or endorsement of any digital asset or services discussed herein; and (2) relied upon for any investment activities. All information is provided on an as-is basis and is subject to change without notice. We make no representation or warranty of any kind, express or implied, regarding the accuracy, validity, reliability, availability or completeness of any such information. Binance.US does NOT provide investment, legal, or tax advice in any manner or form. The ownership of any investment decision(s) exclusively vests with you after analyzing all possible risk factors and by exercising your own independent discretion. Binance.US shall not be liable for any consequences thereof.
Risk warning: Buying, selling, and holding cryptocurrencies are activities that are subject to high market risk. The volatile and unpredictable nature of the price of cryptocurrencies may result in a significant loss. Binance.US is not responsible for any loss that you may incur from price
