To start investing into cryptocurrency, namely ADA (in the Cardano Network), here is the rough approach on how to do this:
- Create an account at a crypto exchange and buy some ADA with fiat currency (eg. CHF, EUR or USD)
- Create a wallet and securely store your password / recovery phrase
- Move your ADA investment from the crypto exchange to your wallet
- Delegate your ADA in the wallet to Renew Pool (ticker: "RENEW")
Here is a more detailed explanation on how to achieve the above points:
Create an account at a crypto exchange and buy some ADA
You can buy ADA at many different crypto exchange markets. All of them might have slightly different exchange rates and they might charge different fees on paying with eg. a credit card or a SEPA bank transfer. Kraken, Coinbase and Binance are examples where you can create an account and buy ADA by paying with credit card or by SEPA bank transfer. After you have ADA in your Coinbase or Binance account, it is only secure as long as the servers of this exchange / company are secure, and as long as governments don't decide to block all investments at this exchange because of new regulations. In other words: It is a very good idea to transfer your investment immediately into your own wallet, which only you have access to and for which you make sure that it is stored securely. The next step will explain this process.
This is a listing of my personal experience of fees on different exchanges, WITHOUT WARRANTY!:
- Kraken: Bank transfer to Swiss banking account: Free, Conversion CHF to USDT: around 1.4%, conversion USDT to ADA: around 1.4%, withdrawal to wallet: 1 ADA
- Coinbase: SEPA CHF to EUR >1%, EUR to ADA: >1.4%, withdrawal to wallet: 0.18 ADA, total ≈3.5%
- Coinbase Pro: Total only ≈0.5% (Coinbase Pro has much lower fees than regular Coinbase but the interface is not as easy to use. Read more about it here)
- Binance: SEPA currently not available, read more about it here
Create a wallet and securely store your password / recovery phrase
You can use Daedalus or Yoroi to create a wallet on your computer. There is a lot of information about the differences of these two on the internet. This guide suggests you download EMURGO's Yoroi wallet as it does not require downloading the whole Cardano blockchain to your computer.
Download Yoroi from here and create a new wallet on your computer and lock it with a password. The password is required to access the wallet data on your computer. With the files from your computer and this password, anyone is able to access your wallet / your money. If the data on your computer or this password is lost, only the recovery phrase can access your money (see the following paragraph).
There is a recovery phrase consisting of 15 or 24 words which you have to memorize upon creating a wallet. With this recovery phrase, you or everyone else posessing it is able to access your wallet and all of your investment inside it from anywhere in the world. In other words, this recovery phrase has to be securely stored without the possibility for anyone else but you to access it. Dependent on the amount of your investment, it is generally a very good idea to:
- not store this recovery phrase on your computer, and particularly not in clear text on an unencrypted drive*
- store this recovery phrase in 3 different places which are geographically apart
- use different forms of storage (write on paper, engrave on metal, ...)
Move your ADA investment from the crypto exchange to your offline wallet
To move your ADA from the crypto exchange to your offline wallet, you can find/generate a personal "receiving address" in your wallet. Upon opening Yoroi wallet for the first time, this address will typically already be created for you and displayed in clear text and as a QR code. You can share this "Wallet address" with anyone to receive funds in ADA. ADA sent to this address will go into your wallet and will only be accessible by you thereafter provided you securely stored your password / recovery phrase.
In your Coinbase or Binance account created in the first step, you can send ADA to this address. This will take only a very short time and cost a small amount of ADA transaction fees. You should see your ADA after a few minutes in your Yoroi wallet. The option to send ADA in your Binance account can be found under "Wallets -> Withdraw"
Delegate your ADA in the wallet to Renew Pool (ticker: "RENEW")
Without delegating your ADA to a pool, you will not earn yearly revenues. Therefore it makes sense to delegate the ADA in your wallet to a pool. This does not move your investment anywhere - it will stay in your wallet and is still available to you, with the difference that it produces yearly revenue.
With RenewPool (pool ticker "RENEW") you do not only get yearly revenues for yourself, but you also help to finance projects as listed under our Mission & Projects page.
At the time of writing this guide, the transaction fee to delegate ADA to a pool is around 2 ADA. This might seem much if you delegate only a small amount of ADA. As soon as you delegate in the range of > 500 ADA, this fee is small compared to your yearly revenues!