Once these two accounts are established, the basic process is to buy or transfer Bitcoin to the exchange, exchange the Bitcoin for ADA, and then transfer the ADA cryptocurrency back to the Daedalus Wallet. It is extremely important not to leave any cryptocurrencies in the account at the exchange. These have been shown to be vulnerable to theft.
Download the wallet by selecting the type of wallet that works on your computer (Windows or Mac). A Linux wallet is promised for the future. After downloading the correct wallet, install it on your computer by running the program.
Select the appropriate language and “continue”. Read the terms of use, click the box that indicates you have done this and “continue”. Decide if you want to send logs to Cardano about the use of your wallet by selecting the appropriate box. Be patient while your wallet is connected to the Cardano blockchain. This may take ½ hour or more.
Once the connection is established, choose “Create a new wallet” and give the wallet a name you will remember. Select “Activate to create password”, then enter a password that meets the specified criteria. Re-enter the password in the second box and “create personal wallet”.
Confirm that no one is watching your screen and you will be given a 12-word passphrase. Write this down and keep it in a very secure place, then select “Yes, I have written it down.” Recreate the passphrase, and then read the two warnings. Check that you understand them and “confirm”.
Your wallet is now open. Click “receive” and you will be provided with your wallet’s address. As with the passphrase, write this down and keep it in a safe place.
You now need to buy some Bitcoin or Ethereum to exchange for ADA (we recommend buying Ethereum as the process time is faster). At the time of this writing, no exchange supports buying ADA for national fiat currency, but the market is extremely fluid, and this may have changed. If so, it will still be necessary to establish an account at that exchange.
There are many exchanges that allow the purchase of Bitcoin or Ethereum for national currencies. They offer a variety of features, including ease of use and security. In addition, the cost of purchasing Bitcoin or Ethereum changes frequently, so it is impossible to identify a “best” option for this step. Coinbase, CEX.IO and Coinmama are popular options, and this guide will describe the process of creating an account to purchase Bitcoin but it’s the same as Ethereum. If you already own Bitcoin or Ether, this step is unnecessary. You can move forward to the next section.
After using the link to go to Coinbase, CEX.IO or Coinmama, select “Sign up” and enter your personal information. Those exchanges treat client identification very seriously, so be sure to verify your account by supplying a phone number, uploading an image of your photo ID and verifying a credit/debit card or bank account.
After completing these steps, select “Buy/Sell” at the top menu. Select “Bitcoin” and enter either the number of coins or the amount you want to spend. Bitcoin can be purchased in fractional units and the system will do the math for set amounts of local currency. Verify the information you have entered and “Buy”, and then “Confirm buy.”
Now go to an exchange such as Binance to exchange your Bitcoin for ADA. First, enter Binance and open an account, verify the account in the email you received. Then, you need to fund your account with BTC or ETH that you have purchased before at one of the exchanges above. In order to do that, click the “Funds” tab and search for BTC/ETH, choose “deposit”, copy the BTC or ETH deposit address and paste it to the exchange that you to withdraw the money from. The process might take up to one hour (vary according to different exchanges).
Now, after completing these steps, you have Bitcoin or Ethereum in your Binance account. Click the “exchanges” and search for ADA/BTC or ETH/ADA, enter the amount and click “Buy ADA”.
Alternatively, Coinswitch is an aggregator, which means that it surveys the market for you and returns suggestions on the best exchange rates available. In addition, this site automatically transfers your newly acquired ADA coins to your Daedalus Wallet, eliminating the dangerous possibility of leaving your coins on the exchange.
Choose “Register” in the upper right corner of the Coinswitch website, then enter your email and a new password. While you are waiting for the email, complete the personal information, including the phone verification. After you have received the verification email, click on the embedded link, re-enter your email address and password.
On the site, select Bitcoin on the left, entering the number of coins you have and the ADA on the right. Coinswitch will return with a recommended exchange as well as a listing of other exchanges. Make your selection and you will be prompted for the address of your Daedalus Wallet. Enter that information and you will be given an address to which you should send your Bitcoin.
Copy that address and return to the site or wallet that has your Bitcoin, such as Coinbase. Enter the address you were given by the Coinswitch site and transfer the Bitcoin to that address. Once the transfer is complete the selected exchange will initiate the conversion to ADA and transfer them to your new Daedalus Wallet.
Return to that site and verify the coins have been transferred. You may need to update or enter additional information to view the balance.
The process currently required to purchase ADA demonstrates the opportunity Cardano sees in the cryptocurrency marketplace. It is still in a technical infancy, with involved steps for every transaction. In many ways, it is similar to the early automotive industry before the invention of the electric starter and other modern conveniences.
Cardano hopes to advance the industry in much the same way. For example, they plan on providing the Daedalus Wallet with the capability of storing multiple cryptocurrencies instead of just ADA. They also are the process of creating user-friendly addresses for transferring cryptocurrencies. These are just two of the projects underway at the company.
The number of projects undertaken and their ambitious scope is only two of the challenges Cardano faces in establishing itself as the preeminent blockchain in the market. In addition, it must overcome other blockchain environments that have become established in this sector while Cardano was in development.
The academics working on the projects have impressive backgrounds and credentials, but Cardano must harness this intellectual capacity in a productive direction. The long development time suggests there may be problems in this area. Furthermore, the company must bridge the gap between the philosophical stance of blockchain purists and the practical concerns with producing measurable results.
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Investors buying ADA are undoubtedly hoping they now own “the next Bitcoin”. They have reasons for this optimism beyond the price surge. The management team at Cardano is incredibly experienced in blockchain technology, and they are attracting some of the brightest minds in the academic world. In addition, they are taking a thoughtful approach to developing what they hope to be the blockchain environment of the future.
However, “the future” for cryptocurrency investors may mean a much shorter period of time. It is uncertain if the buyers who drove up the price of ADA did research into the fundamental value of the cryptocurrency or if they just saw the increase in November and created the increase in December. This is the nature of financial markets as they develop. Value and speculation combine in different measures at different times to impact market price.
Keep in mind that Cardano has a long-term value proposition that is dependent on accomplishing some very ambitious goals. While the organization has many of the hallmarks of a successful enterprise, they have little to show so far in terms of actual accomplishments. In this sense, any investment in ADA could be considered speculative because there is no assurance that the company will achieve its goals.
Before getting into the specifics of what they hope to do, it is important to discuss their philosophical basis. This is firmly rooted in the concept of decentralized control by the entire community. Cardano states clearly that their control and decision-making authority is intended to be temporary. Their vision includes developing mechanisms by which all decisions are made by those who use and support the blockchain.
Decentralized control of the blockchain environment is a core premise of the blockchain concept. Some critics of Ripple contend that it is not a blockchain application because it lacks this component. Satoshi Nakamoto, the pseudonym for the founder of Bitcoin, advocated for a decision-making process that includes the entire community as a way to eliminate governmental decisions that benefitted one class of society rather than the common good.
Bitcoin was an attempt to implement this philosophy over the Internet, but it ran into problems that could not be addressed by the initial rules of the blockchain. Nakamoto’s solution to these problems was to allow the blockchain to split into two in what is referred to as a “hard fork”. This process has created Bitcoin Cash and other cryptocurrencies under the Bitcoin “name brand”.
The management team at Cardano includes individuals who experienced the hard fork at Ethereum, another blockchain environment. This split in the blockchain was caused by an inappropriate application of the rules which most people would characterize as a theft. The individuals who felt that the blockchain should not be changed in spite of this unforeseen circumstance are now creating Cardano.
They’ve learned from the experience. The structure of Cardano includes elements that provide for changes without splitting the blockchain. This may prove to create a more stable and manageable blockchain. If so, the Cardano blockchain may be able to gain greater acceptance and use than other blockchains already in existence.
One of the other areas where Cardano is trying to make progress is smart contracts. These are self-executing agreements between two parties that have the potential to revolutionize transactions. Proponents of smart contracts believe that they will eliminate the need for lawyers, accountants and other professionals who oversee the executions of contractual agreements.
Smart contracts are written into the blockchain and cannot be changed without altering the blockchain. Once the conditions of the smart contract are satisfied the contract is automatically executed. The Bitcoin blockchain includes only the most basic types of smart contracts that mimic the use of other currencies. Cardano wants to improve on that functionality.
More flexible smart contracts are one of the features of the Ethereum blockchain environment. Ethereum is also a public blockchain that can be used by developers of other blockchains. It offers smart contracts that can mimic any transaction that can be done in the physical world. These are referred to as Turing-complete contracts.
Although some commentators question the expense of maintaining this level of functionality on a public blockchain, Cardano seeks to offer something even better. They represent their programming as better able to tolerate errors in coding. They have also promised to make segments of coding available to anyone to make Cardano smart contracts easier to use.
This sums up one the main value propositions for Cardano. They want to make blockchain easier for everyone to use. This is a very common, and commonly successful, for late entrants into a developing field. The cryptocurrency wallet from Cardano is a great example of this idea.
It is necessary to have a Daedalus wallet to buy or use ADA. It can be downloaded from their website free of charge and promises to add features that will make a universal wallet suitable for any cryptocurrency use. One of the upcoming features touted is protection against quantum computer theft, even though quantum computers are still in their infancy.
Cardano certainly has the intellectual capabilities necessary to tackle the next generation of blockchain issues. It also has the experienced leadership that is required to manage such a monumental undertaking. There can be little doubt that the ideas it is pursuing would be well received by blockchain users.
The risk is that development time will stretch out past the patience of investors and that the final delivered product will not be able to differentiate itself successfully from other options already in operation. Given these factors, those buying ADA may want to prepare themselves for a long wait before they realize the full potential value of the cryptocurrency.
This article was originally posted on FX Empire
