How to Buy Cardano 

Do you want to buy some Cardano (ADA) but don’t know where to start? No worries. In this guide, we will explain how to buy Cardano and keep your funds secure.

What Is Cardano?

Cardano blockchain was launched in 2017 as a “proof-of-stake” alternative to the Ethereum blockchain. The founder Charles Hoskinson, who also co-founded Ethereum, described Cardano as a less-energy-intensive version of the revolutionary blockchain, which at that point still worked on the “proof-of-work” mechanism.

While Ethereum also later switched to POS verifications, the Cardano blockchain grew in popularity with various dApps and smart contracts on the blockchain. Cardano’s native currency ADA (named after famous mathemetician Ada Lovelace) also grew in popularity and reached a price peak in 2021. However, the subsequent crypto winter affected the asset, causing a significant decrease in both price and market capitalization.

Cardano’s advantage over the Ethereum blockchain is the relative affordability of gas fees. As you may know, each operation on a blockchain network usually costs a certain fee, whether you are transferring assets from one wallet to another or trading cryptocurrencies. Otherwise known as gas fees, these fees usually add up to huge amounts, especially when there is a lot of traffic on the blockchain.

Cardano was designed for scalability so that as the network grows and gets more action, the blockchain traffic doesn’t hit the upper threshold. This is a common problem on the Ethereum blockchain, where the high traffic may lead to explosive gas fees that could reach hundreds of dollars.

That’s one reason Cradano has become quite popular in recent years, as the gas fees are cheaper than Ethereum fees. However, Cardano may also be approaching its limits, and it remains to be seen whether the gas prices will remain stable.

Where Can I Buy Cardano?

If you decide to invest in Cardano, the best place to start is to check out ADA prices on cryptocurrency exchanges. ADA, as we said above, is the native cryptocurrency of the Cardano blockchain. 

As the 7th largest cryptocurrency by market cap, Cardano is a very accessible asset you can buy in several exchanges and alternative platforms.

If you are considering investing in other altcoins or buying or trading actively over a period of time, it’s a good idea to buy Cardano on a crypto exchange. Crypto exchanges are open for trading 24/7 and offer the best prices alongside several useful features like storage, staking, and quick and mobile trading.

In the US, Coinbase is known as the go-to beginner’s exchange due to its veteran status, helpful user guides, and overall reputation as a secure platform. Of course, you have many options, as there are hundreds of crypto exchanges out there. We will explore this a little more in the next section.

On the other hand, if you are going to make a one-time purchase and hold your coins for a while, and if you already use payment and banking apps like Revolut, Robinhood, and PayPal, you don’t have to navigate the complexities of an exchange. 

These apps often provide crypto services, too. For example, you can buy Cardano on Robinhood or Revolut, store it there, and exchange your assets within the app. However, the prices are usually more expensive with a lot of fees attached. Therefore, they aren’t very beneficial to frequent traders.

We will explain the intricacies of choosing the right exchange in the next section.

How to Buy Cardano

The first thing you want to do before you buy Cardano is to decide where to get it and then figure out the right storage option for you. 

Where to Buy Cardano?

So, remember how we said you could buy Cardano on crypto exchanges and alternative payment platforms? Well, if you are a beginner, it’s probably a good idea to go with a crypto exchange that allows you to pay for your purchases with a bank transfer or a credit card.

That narrows down the options a little: crypto exchanges are basically divided into two categories: centralized crypto exchanges like Coinbase and Binance that support cash-to-crypto action and decentralized exchanges that support only crypto-to-crypto trades like Uniswap and SushiSwap. 

So unless you have other digital assets you want to trade for Cardano, a centralized crypto exchange is a good place to start. To narrow down your options further, we recommend checking out our guide to the most popular 21 crypto exchanges in the world by trading volume. 

There you can find a brief history of each exchange along with the benefits and drawbacks of each option, including fee arrangements, ease of trading, and several other features.

Keep in mind that crypto is still quite poorly regulated (although this has been changing in recent years), so choosing a reputable and secure exchange is quite important. You don’t want to click on the first ad, as it could lead you to a predatory platform. 

Once you go through the list and select a couple of possible options, take your time to read our individual reviews to have a better idea of what to expect. Then, when you’re ready, go ahead and open a trading account on the exchange.

Most exchanges allow you to wire money to the platform to buy crypto. It’s usually the cheaper option compared to credit card or third-party payment channels, as these payment options cost extra fees.

Some popular exchange options we cover are Binance, Coinbase, Kraken, and Bitfinex. 

Buying Cardano

After you create a trading account on an exchange, you usually have two options to buy a digital asset. You can use the exchange’s easy buy feature or the spot market.

Most exchanges started offering an easy buy feature for beginners. The process is quite simple: you navigate to the “Buy Crypto” page, fill out an order form, and click “Buy.” 

Depending on the exchange, you may be able to transfer funds to the platform via wire transfer or use third-party payment options like credit cards, PayPal, Zelle, Simplex, and so on.

For a beginner, it’s the easiest method and takes only a few minutes at most. However, most exchanges charge extra for their easy buy feature, so this method can turn out more expensive than buying them on the spot market.

Each exchange operates a separate spot market where buyers and sellers can name their prices. Exchanges with high trading volume often offer crypto-fiat markets. Here, you can purchase ADA in exchange for USD or other currencies like GBP, EUR, or AUD.

This is usually the cheapest and most professional option because you can set the price you want to pay and issue more complex trade orders. However, the spot market interface looks much more complicated than the simple buy and can be intimidating to a beginner.

You should take time to explore both options. If you like, you may purchase Cardano via simple buy at first and start figuring out how to make more complex trades later on through the spot market.

Where to Store Cardano

Once you purchase ADA on a crypto exchange, your assets will be deposited to your crypto wallet on that exchange. So you don’t have to worry about storage in the short term. In the long term, this is a serious matter you will have to make some decisions about.

You may already know this, but crypto wallets aren’t really wallets. They are more like bank accounts: When you buy ADA on an exchange, the assets are deposited to an ADA account. You can manage those assets through your exchange account to sell or trade them with other currencies.

As you can guess, it’s a very convenient solution, as your assets are always on hand for a quick trade on the exchange. However, there are certain implications of leaving your assets in an exchange wallet, such as the fact that the exchange has the ultimate control over your funds.

This may not seem like a big deal especially since we are already used to trusting our funds to financial institutions like banks. However, exchanges are different from banks in some important ways: They are less regulated, less protected, and less secure against potential loss.

Another way to put it is that exchanges can be hacked, can go bankrupt, or could disappear with your funds: all three scenarios have happened before (in some cases simultaneously), costing traders millions of USD and their entire portfolios.

Overall, it’s a good idea to educate yourself on available storage options if you are considering making serious crypto purchases. Now let’s look into some possible ADA wallets you can use to store your funds.

Custodial Exchange Wallets

Let’s say you buy some ADA on an exchange like Binance or Coinbase: Your assets will be deposited to your Cardano wallet, and you can transfer or trade them afterward through the exchange interface.

A crypto wallet is a program to interact with the blockchain and monitor your funds: The program requires a security key to authorize all operations. This security key is the only thing that ensures asset ownership. In other words, whoever has the wallet key, controls the funds.

When crypto was first designed, it was assumed that each user would hold their own wallet keys to ensure the security of their transactions. Of course, the popularity of crypto exchanges created a different trend: Now, most users depend on their exchange password to access their funds while leaving the matter of wallet keys to exchanges.

This is known as a custodial wallet arrangement and is a convenient method. You don’t have to keep your key secure, as the exchange takes care of it. It’s convenient as you can make fast trades or take advantage of staking opportunities to earn profits from your assets.

However, while you can control your funds through the exchange, strictly speaking, your funds remain in the custody of the exchange. That means the exchange has the ultimate power over the funds: The exchange holds the security key to the wallet, and as the holder of the security key, it is the only entity that can actually execute commands.

As history has proven, this be quite risky: If the exchange falls, your assets will be gone. Some famous examples include Bittrex, Quadriga, Africrypt, Thodex, and FTX. Otherwise, the exchange can also be hacked, in which case the losses may be partially refunded or not, depending on the exchange.

As such, some consider using exchange wallets a huge risk and prefer other storage options.

Self-Custodial Wallets

Another option is to use a self-custodial software wallet to store ADA. Self-custodial wallets are programs hosted on your device (your computer or mobile phone). These programs help you manage your funds and, most importantly, keep your security key.

However, there are some drawbacks to this option as well: Unfortunately, it can be notoriously hard to secure a self-custodial software wallet. Software wallets are also called hot wallets because they run on devices connected to the internet: unfortunately, that means they are vulnerable to cyber-attacks.

Most users don’t have the means to completely secure their devices against hackers, and in certain cases, even professionals could fail. While exchanges have the funds to run industrial-strength security measures, most retail traders only have basic firewalls to defend their systems from attackers.

In fact, most exchanges use a combination of hot and cold wallets to balance the need for security with convenience. Cold wallets are not connected to the internet, so they are safe against cyber attacks. 

If you consider using a self-custodial wallet to manage your ADA, you may also consider investing in a cold wallet to further secure your funds. We’ll discuss some cold wallet options for storing ADA in the next section.

In terms of self-custodial software ADA wallets, you have a couple of options: The most well-known is probably Daedalus, a wallet developed by Cardano Charles Hoskinson. However, Daedalus is a full-node wallet that requires you to download the entire Cardano blockchain to function. While this can be useful if you are interested in verifying Cardano transactions, it is not very useful to the average trader and can be taxing on your computer.

Another option is Yoroi, a lightweight wallet for ADA transactions. Unlike Daedalus, it doesn’t require you to download the whole blockchain and supports all Cardano tokens.

These are both wallets specifically designed for Cardano, so if you plan to buy other cryptocurrencies, it can be better to go for a multi-currency wallet like Exodus. Unlike the other two, Exodus can be used to store multiple digital currencies like ADA, ETH, BTC, and so on.

All three options also offer hardware support: In other words, they can be sued in tandem with a cold hardware wallet for increased security.

ADA Hard Wallets

So if exchanges control your funds, and if software wallets are poor protection, how do you ensure security and ownership at once? The answer is hardware wallets. These USB-like devices are not connected to the internet and thus remain safe from viruses even when they are connected to your computer.

Basically, hardware wallets are external drives with wallet software. Wallet software ensures you can store, manage, and sometimes even directly trade cryptocurrencies within the wallet interface. Most of them also come with extra security measures like a PIN code and a backup key in case of compromise.

Generally, hard wallets are considered the safest form of crypto storage, and most crypto exchanges use hard wallets to protect the funds in their hold.

However, unlike exchange or software wallets that are free, hardware wallets cost a pretty penny: there are different models with different features in the market, but you can expect to pay a minimum of 50 USD for a starter hard wallet, while the more advanced models can be more expensive.

Most hardware wallets include support for ADA, as well as other cryptocurrencies like Bitcoin, Ethereum, Litecoin, Solana, and so on. Since they are multi-currency wallets, you can use them for all your crypto assets.

Hardware wallets can be used alongside software wallets like Exodus and Yoroi for increasing asset security. Of course, that doesn’t mean you have to buy one to invest in cryptocurrencies, but if you are planning to make a big investment, a hardware wallet is a very good idea.

You can store ADA in hard wallets like Trezor, OneKey, Keys,tone, and Ledger.