Cardano and its native cryptocurrency ADA were created by one of Ethereum’s co-founders in 2017.
The token peaked in value at £2.07 in the summer of 2021 and now trades at around 28p.
ADA is as volatile as any other cryptocurrency. The UK’s financial watchdog, the Financial Conduct Authority (FCA) has issued repeated warnings to would-be crypto investors. It says anyone who buys cryptocurrencies should be prepared to lose everything.
Choose a crypto exchange
To buy Cardano (ADA), you’ll need to use a crypto exchange to swap your fiat (Sterling) currency or other cryptocurrency for ADA. Exchanges are websites or apps crypto traders use to buy and sell tokens.
You’ll find ADA listed for trading on several crypto exchanges, including the likes of eToro, Coinbase and Bitstamp.
Here are some things to consider when choosing an exchange:
Payment methods
All exchanges accept direct bank transfer. This is the most cost effective way to pay. Most exchanges also allow credit and debit card card deposits.
Storage
The personal and private keys you need to make crypto trades are stored in a crypto wallet. Many exchanges offer free wallets, but online ‘hot’ wallets are a target for hackers and some exchanges have been hacked.
Wallet transfers
When an exchange allows you to transfer your keys out of your wallet on its platform and into a third party wallet, either on or offline, they may charge a fee.
Paying for your ADA
There are often fees associated with certain payment methods. For example, several exchanges charge no fees on bank transfers but levy a 3.99% fee on debit card payments.
If you were to use a credit card, your card issuer would most likely class the transaction as a cash advance, meaning it would attract interest at a much higher rate than a normal purchase would. Interest is also charged from the day the transaction is made, whether you pay off your balance in full when it’s due or not..
However, taking on debt to invest in crypto is generally not advised.
Placing an order
Once you’ve set up your account and made a deposit, find the Cardano ADA page in the app or website and input how much you want to spend on it.
Storing your keys
Crypto exchanges typically offer an integrated wallet in which to store the personal and private keys you need to make tradaes. Some investors prefer to hold their keys in a third-party wallet to minimise the risk posed by hackers.
If you do choose to keep your keys elsewhere, ‘hot’ wallets are hosted online, while ‘cold’ wallets are offline storage devices which usually take the form of a thumb drive.
Hot wallets are more vulnerable to hackers, but offer support in accessing your keys if you forget your login details for the exchange.
Cold wallets are arguably more secure until they’re plugged into a web-connected device. As such, they can’t be easily reached by hackers.
Lose access to a cold wallet, however, and there’s no customer support to help you recover them, which means you could lose access to your assets.
