Solana Crypto Investment: A Beginner's Guide To Getting Started

Solana (SOL) is a leading blockchain platform and a growing rival to Ethereum. Its native token, SOL, is one of the top 10 cryptocurrencies by market cap. SOL is used for transactions on the blockchain, including micropayments, and can also be staked for additional rewards. With a relatively low price compared to other well-known cryptocurrencies, it is an attractive option for new investors. To invest in Solana, you need to open an account with a crypto exchange such as Coinbase, Binance or Gemini. You can then fund your account and place your first order for SOL.

Choosing a crypto exchange

When choosing a crypto exchange, it's important to do your research and be aware of the potential risks. There are hundreds of exchanges to choose from, so it's worth considering several factors to ensure you select a legitimate and secure platform that suits your needs. Here are some key points to keep in mind:

• Scams and Fraud: The world of cryptocurrency is not immune to scams and fraud. Always verify the physical address of the exchange. Transparency is often a good indicator of legitimacy. A lack of transparency about the exchange's location may also indicate a higher risk of scams and can affect your understanding of the legal implications of your investments.
• Security: Go with an exchange that prioritizes security. The more rigorous the account creation process is, the better. This indicates that the exchange takes the protection of your assets seriously. Additionally, consider using an offline storage service like a cold wallet for most of your digital assets, even if the exchange offers online wallet options.
• Fees: Different exchanges have different fee structures, and these can impact your investing strategies. Some exchanges charge fees based on transaction size or activity level, while others may have unrelated determinants. Be sure to understand how each exchange's fees work and consider how they would affect your daily investing activities.
• Currency Pairs: Aside from fees, the availability of specific currency pairs is another critical factor. Different exchanges offer different pairs of cryptocurrencies for trading. For example, Coinbase, one of the most popular exchanges, offers over 9,600 assets but only has about 420 available in tradeable pairs. If you're interested in trading less common altcoins, you may need to look beyond the most popular exchanges.
• User Experience: An exchange with an intuitive interface and a good user experience can make trading easier and more accessible. However, user experience is subjective, and different people prefer different interfaces. Ensure you also evaluate the exchange's customer service and other customer-related functionalities.
• Payment Methods: The method of purchasing cryptos varies between platforms. Some common options include bank transfers, PayPal, credit and debit cards, and cryptocurrency. Choose an exchange that supports your preferred payment method. If you're new to crypto and don't yet own any coins, selecting an exchange that accepts fiat currency can make entering the market less stressful.
• Reputation and History: Before creating an account, take the time to thoroughly research the exchange's reputation and history. What do other users say about their experience? Have there been security issues or hacks in the past, and if so, how were they addressed? Don't be afraid to dig deep and look for potential negative stories that the exchange may not want new customers to see.

Funding your account

Once you have created an account on your chosen platform, you will need to fund it. You can do this by linking a payment method. The payment methods available to you will depend on the platform you have chosen.

For example, on Coinbase, you can use a bank account, a debit card, or initiate a wire transfer. On Gemini, you can use wire and bank transfers, ACH transfers, Apple Pay and Google Pay, debit card purchases, and crypto transfers.

On Binance, you can use a debit or credit card, Google Pay or Apple Pay, or a third-party payment channel.

It is important to note that if you are funding your account with a credit card, the credit card company may view the transaction as a cash advance, and you may be charged cash advance fees and a higher annual percentage rate (APR).

After you have funded your account, you can place your first order. Simply type in the amount you want to invest, and select an order type, such as a market or limit order.

Placing your first order

Once you have chosen a crypto exchange and set up your account, you can place your first order for Solana.

On the website, click on the "Buy Crypto" link at the top of the page to see the available options. You can also navigate to the "Buy Solana with USD" page on Binance.

On the mobile app, tap the "+" or "Buy" button on the Home tab.

Next, select Solana from the list of assets. On the website, you can do this by clicking on the "Buy" panel and searching for Solana. On the app, use the search bar to find Solana.

Now, enter the amount you want to buy. On the app, use the number pad to input the amount in your local currency, which will automatically be converted into the equivalent amount of Solana.

Finally, finalise your purchase. Review the details of your purchase and confirm the order. You may be redirected to your bank's transaction page to verify the payment. Once the order is processed, you will be taken to a confirmation screen.

Using a credit or debit card

• Nexo: Nexo allows you to buy SOL with a credit or debit card with as little as $1. You will need to verify your identity, then add your card details and complete the purchase.
• CEX.IO: CEX.IO is a popular platform that offers an entire ecosystem of products and services for interacting with decentralised finance. You can use a credit or debit card to buy SOL on CEX.IO, but you will first need to register and verify your identity.
• ChangeNOW: ChangeNOW does not require registration to purchase SOL with a credit or debit card. It works with any card powered by Visa or Mastercard.
• Changelly: Changelly allows you to buy SOL with a credit or debit card with as little as $5. You will need to select the fiat currency you want to use and enter the amount you wish to invest. Then, choose the bank card payment option and enter your card details.
• Crypto.com: Crypto.com allows users to purchase SOL with a debit card with no fees. You can also use the Crypto.com Visa Card to convert cryptocurrencies into fiat currencies and spend them at over 60 million merchants globally.
• Bybit: Bybit is a trading platform that allows you to buy SOL with a credit or debit card. You will need to sign up for a Bybit account and buy stablecoins or BTC with your card, then trade these for SOL on the Bybit Spot market.

Crypto wallets

There are two main types of crypto wallets: hot wallets and cold wallets. Hot wallets are connected to the internet and are often available as a standalone product or as an add-on through popular crypto exchanges. They make it easy to execute crypto transactions but are more vulnerable to hackers. Examples of hot wallets include Coinbase Wallet, MetaMask, Crypto.com DeFi Wallet, Exodus Crypto Wallet, and Gemini Crypto Wallet.

Cold wallets, on the other hand, are not connected to the internet. They are usually physical gadgets, such as USB sticks, that store your crypto ownership keys offline. Cold wallets are more secure than hot wallets but are less convenient as they are not easily accessible. Examples of cold wallets include Ledger Crypto Wallet, Ellipal Titan Crypto Wallet, and SafePal Crypto Wallet.

When choosing a crypto wallet, it is important to consider factors such as security, supported currencies, ease of use, customer service, and cost. Additionally, you may want to decide if you prefer a custodial wallet, where a third party controls and manages the wallet on your behalf, or a non-custodial wallet, where you are responsible for storing and protecting your keys.

Frequently asked questions