< Previous Next >
How to Buy EOS (EOS): Quick Guide
DISCLAIMER: None of the following is intended to be investment advice. This is only meant to be a description of what has worked well for me so far, and my own opinions. Also, full disclosure, my links to Coinbase and Binance include referrals. It actually benefits you to use them because we will both get an extra $10 worth of BTC for free if you deposit at least $100 to Coinbase. Thanks in advance if you follow the links when you make your accounts — and even if you don’t, I hope this guide helps you out!
This guide will teach you how to buy EOS from square one (i.e., all you have is fiat money, no cryptos). It will also work for most other cryptocurrencies, but as I’m focusing on EOS right now, I am going to write a quick foreword about it and then we’ll get right into the details of the guide.
A Little About EOS — Why Buy?
There is a massive subset of people who are new to the crypto-space entirely but have only heard of Bitcoin. Then they go online and they search around and figure out there are actually many, many cryptocurrencies out there with many different use cases.
EOS is another coin that many believe has the potential to be an “Ethereum killer” due to its take on smart contracts. EOS purports to be a direct upgrade to Ethereum in many ways; its proponents say that this coin is faster and more scalable than Ethereum, though to be fair this is a common claim made by many crypto-enthusiasts about their preferred coin. EOS’s whitepaper actually claims that its “operating system”-like approach will lead to a blockchain that is capable of scaling to “millions of transactions per second” while also eliminating user fees. That would definitely be progress!
I believe it is important to look at the people behind and around a coin when weighing whether you should invest. This can give you a good idea about the trustworthiness of the technology; is the founder unproven, or has he had success in the past in the crypto world? Or, are the personalities associated with the coin a little on the shady side? In this case the man behind EOS is Dan Larimer, an entrepreneur that has already created two successful, functional coins called STEEM (a technology that powers decentralized social media) and Bitshares (a technology that powers decentralized exchanges). EOS passes the smell test here — Larimer is clearly the real deal, an expert on decentralization and blockchains. He describes his life’s mission as finding “free market solutions for securing life, liberty, and property.” Now that’s crypto!
EOS has been described as “a decentralized blockchain operating system.” As you probably know, an operating system is what lets you interact with your computer — Windows, macOS, Linux, etc. This “operating system” manages many different processes simultaneously, such as notepad, Office, Steam, your internet browser, etc. When people call EOS a “blockchain operating system” they don’t mean it literally; instead, what they mean is that EOS will be capable of hosting decentralized applications in the same way that your operating system manages what programs you have open. Without getting bogged down in technical jargon, this basically means that EOS will be incredibly flexible. One should also note that the EOS.IO software provides a number of rich features — accounts, authentication, databases, asynchronous application-scheduling communication, etc.
If you’re looking for more information about EOS and Dan Larimer’s work, I recommend you take an hour out of your day to watch this extended interview or take a look at the EOS whitepaper. I will warn you that both of these are highly technical, especially the latter. This is some next-level stuff.
I could go on for a long time and go into much greater detail about EOS’s technical aspects, but it’s time to move on to a quick price comparison. Ethereum is a totally a valid coin to compare EOS to; EOS, if successful, will essentially do everything Ethereum does (and more!), but better. At the time of this writing, Ethereum is ranked #2 on coinmarketcap with a market capitalization of $75,393,866,449. If EOS had Ethereum’s current market cap, it would be worth roughly $130 per EOS. That’s almost 13 times the current price (about $10/EOS)!
Before I continue I want to stop and say that this is a coin in its infancy and you should treat it accordingly. What we’ve been talking about when I’ve referred to EOS are tokens that will exist on a launched blockchain that adopts the EOS.IO software. What we’re buying today are actually ERC-20 compatible tokens which, if registered, will later become true EOS tokens on their own blockchain. Confused yet? Don’t worry about this for now. I will expand on it in the wallet section. Just be aware that by buying EOS on an exchange, you are basically participating in a sort of ICO (Initial Coin Offering).
With that said, I am still interested in EOS — so let’s learn how to buy some.
Buying EOS: Basic Strategy
To date I’ve had no problems with the following basic strategy:
- Create and sign into a Coinbase account. I recommend Coinbase because they are the most straightforward exchange.
- Purchase some ETH. At the time of this writing, this currency transfers the fastest and cheapest out of anything Coinbase offers. Litecoin competes here, but will cause hiccups later in the process — more on that later.
- Create and sign in to a Binance account. I recommend Binance because they have been reliable and convenient for me and they offer many different lesser-known cryptocurrencies with trading pairs on both ETH and BTC. An added bonus is that you can withdraw up to 2 BTC/day worth of funds with no verification at all. If you’re not American or Chinese, you can acquire tokens directly at EOS.io. This guide assumes this isn’t possible for you. Alternate exchange options: HitBTC and KuCoin also trade EOS— I have written a guide to using HitBTC and a guide to using KuCoin which you will find useful.
- Move your ETH to Binance. Once it has confirmed, you can now easily use the ETH/EOS trading pair to buy as much or as little EOS as you want. More on trading pairs later.
- Send your coins from Binance to a safe wallet for long term storage if you intend to hold for awhile. This is not strictly necessary but it is considered a safer option than keeping ANY coin on ANY exchange long term. This is also the point where you would register your coins for the May-June 2018 snapshot — more on this later.
Now, if you’re a power user or someone with some existing familiarity with cryptocurrency, you can probably stop here. The rest of this guide is just going to be a more in-depth description of the preceding steps. If you’re completely new to cryptocurrencies, you might be a little lost — that’s fine! You won’t be by the time you finish this guide. I’ll go step by step:
Starting Out On Coinbase
This is arguably the most trusted exchange currently on the market. You can think of them as the PayPal of the cryptocurrency world, with all the good and bad connotations that come along with that. There are some countries where this is not the case! For example, in Canada, one would probably want to use QuadrigaCX instead. Unfortunately, that’s outside the scope of this guide, but I may do a country-by-country guide for acquiring coins later.
All you have to do here is go to Coinbase’s website and create an account. Security is incredibly important here — remember, in cryptocurrencies you are your own bank and so it is absolutely crucial that you follow good security practices. This means your password should be strong — and it should be a password you aren’t using anywhere else (including other exchanges). Google has a pretty good guide with some tips on choosing strong passwords. Keeping security in mind, it would also behoove you to turn on two-factor authentication once your account is created.
Once you are up and running there are a number of options when it comes to actually paying for coins via Coinbase. It is possible to link your bank account to Coinbase but actually transferring coins out of Coinbase will be impossible for a few days while the funds are clearing. This is obviously not ideal if you want to move quickly, as you would now have to wait several days to move your coins to an exchange where you can trade them for EOS (or any other coin).
Instead, I would recommend you link a credit or debit card to Coinbase. This will allow you to purchase some amount of coins immediately, and then immediately send them off wherever you want — your wallet, another exchange, etc. At the time of this writing Coinbase offers three coins: Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
What to Buy First?
In my opinion if you intend to buy lesser-known coins like EOS, ETH is the best choice to buy here. Why? Well, with regards to LTC, the reason is clear: other exchanges like Binance offer direct trading pairs for BTC and ETH, but not LTC or any other currency. What this means is that you could directly exchange your ETH for EOS, or your BTC for EOS, but you’d have to perform another step if you wanted to trade your LTC for EOS (and that means more fees!). Obviously we don’t want to waste even one cent if we can avoid it, so LTC is out.
With regards to BTC, at the time of this writing there have been a lot of rumblings about high transaction fees, slow transaction times, etc. Exchanges often overpay these fees as well, and that means that you are again risking missing out on more money than you need to.
ETH is therefore currently the best choice for our purposes by default — fastest transaction speed, lowest transaction cost. So, to review: create a Coinbase account, link your credit or debit card, and purchase ETH.
I Bought ETH: What Now?
Now is the time for you to make your Binance account. Follow the link and create an account using a strong password (this should be different than the one you used for Coinbase!). There are other places where you may be able to buy EOS (Changelly, Kraken, EtherDelta, HitBTC, KuCoin, etc.). I cannot directly recommend most of these exchanges as I don’t have much experience with them at this point —however, I can say that I have used HitBTC and KuCoin and they have worked well for me. This guide focuses on Binance because my experience there has been 100% positive— I have transferred coins in and out of their system many times with no problems.
After your Binance account is made, click “Funds” at the top right, then “Deposits Withdrawals” beneath it. Find Ethereum in the list and click the “Deposit” button on the far right. You should end up with something that looks like this:
Unlike the picture, there will be an “ETH Deposit Address” listed in the box at the bottom left. This is a very long series of letters and numbers, and is the fundamental basis of most if not all cryptocurrencies. An “address” is simply the destination for funds — think of it like the account and routing numbers at the bottom of your checks. For many cryptocurrencies such as Bitcoin it is possible to have multiple “receiving addresses” which point towards the same wallet.
The address listed here is Binance’s “receiving address” for your Ethereum. To the right of it is a “copy address” button — use it to put the address into your copy/paste buffer. Then, in your Coinbase account, navigate to the Accounts tab and then to your ETH Wallet. Paste in your address. You should double check that the pasted address is the same one you saw on the deposits page in Binance — you can never be too sure when it comes to security! Once you’re sure you’re sending to the right place, input the amount of ETH you’d like to send (if you just want to buy some EOS, you should send all of it) and click “Send.”
Optional Trick: Using GDAX To Save Money On Fees
GDAX, or “The Global Digital Asset Exchange,” is the actual exchange which backs Coinbase. You can use it to save a lot of money on fees if you’re willing to spend a few extra minutes getting verified. Follow this link and click “DEPOSIT.” Click “Coinbase Account” at the top and deposit all your ETH from Coinbase into GDAX.
Once you’ve done this, you can click “WITHDRAW” in GDAX and send your funds from GDAX to Binance. Fees are significantly reduced with this method!
I Sent ETH to Binance — Now What?
Once you click Send, you will need to wait a little while. Without getting too technical about it, exchanges want to be as secure as possible. Thus, when you make a deposit, they wait for multiple “confirmations” from the network before allowing you access to your funds. You can view the progress in your Binance account by clicking Funds and then History. Do not be alarmed if nothing shows up at first! There are many reasons there might be a slight delay. In general you should see the transaction show up within a few minutes, with the current number of “confirmations” next to the number of required “confirmations” next to it. Be patient — your EOS is nearly in hand!
Once you have the required number of confirmations, it’s time to trade your ETH to EOS. This is blessedly simple. In the front page of Binance, click “ETH Markets.” Search for “EOS/ETH” in this list, and click it. Now you are on the trading page. In the bottom left under “Buy EOS”, click “100%” below the “Amount” field.
This indicates to Binance that you’d like to trade all of your ETH for a commensurate amount of EOS for no more than the price listed above. The price field is automatically listed based on the current market. If you like, you can change it to a different price, but like any market it’s not guaranteed that someone will buy at the price you’d like. Your order will remain open until it’s been fully filled or you cancel it. There are several options here such as Stop-Limit orders, etc., but this is outside the scope of this guide. In this case, you are simply placing a “Limit” order for some EOS.
I Placed My Order! Am I Done?
If you want to be done now, you can be — but there are more steps if you want to be security-conscious or forward-thinking. You may want to check under the “Orders” and “Order History” tabs that the order went through — if you placed a Limit order at the default price, it probably did. Once you have your EOS in your Binance account, you can see them under “Funds” → “Deposits Withdrawals.” You can click “Hide 0 Balances” at the top to clean up the screen of coins you don’t own, and you can see an estimate of the overall converted BTC and USD value of your account at the top right.
For maximum security, I wouldn’t leave your coins in the exchange. I like and trust Binance, but ANY site can be hacked or experience downtime — even massively established trusted sites like PayPal. You want to have full control of your coins.
How Do I Move My Coins to a Private Wallet?
In Binance, go into the “Deposits & Withdrawals” tab, then click “Withdrawal” to the far right of the “EOS” row. By now it should be clear what you’re looking at — fields that let you input the address to send the coins to, and how many coins to send. For your convenience, there is a “Max” button to the right of the Amount field. Note that once you click “Submit” you will need to use your two-factor authentication via Google Authenticator. If you don’t have a device to use with Google Authenticator, I recommend you buy an inexpensive Android phone. You can get one for around $30, and as a bonus you can use it as a sort of hardware wallet via Coinomi.
What was that earlier about ERC-20? Snapshots? Help!
EOS is a little different than what you might be used to dealing with. Right now it’s not really the token described in the whitepaper — instead, it’s an “ERC-20” token which lives on the Ethereum blockchain. At some point (currently scheduled June 1st, 2018), a snapshot will be taken of the ERC-20 EOS tokens and the actual EOS blockchain will be cloned from this snapshot. Having your EOS isn’t good enough — you need to register them. Doing this is a somewhat complicated process which is outside the scope of this guide, but I will point you in the direction of guide written by someone else which is fairly comprehensive, and, at the time of this writing, well-updated.
Bear in mind that you don’t need to worry about this at all if you don’t plan on holding your EOS past May 2018. And, while it appears at the moment that EOS tokens left on exchanges on June 1st, 2018, will become “fixed and non-transferable on the Ethereum blockchain,” I personally have my doubts that this will remain the case — it seems a bit reckless otherwise.
But how do I store EOS in a wallet?
It is possible to get EOS working in Coinomi right now and the process is fairly straightforward. In my opinion this is the preferred method, especially if you’re willing to buy an Android phone solely for cryptocurrency use. However, if you’d prefer to use a desktop wallet, I have written an easy-to-follow comprehensive guide which walks you through how to use MetaMask and MyEtherWallet to store any ERC-20 token, including EOS.
One more thing about ERC-20 tokens: I understand it is possible to use a hardware wallet like the Ledger Nano S or Trezor to store them. I have not yet tried this myself, but I imagine it’s not that difficult — apparently all you do is plug in your hardware wallet and have it interface with MyEtherWallet in the place of MetaMask. If you’re confused by all this and want to know more, just check out my guide on the subject. Hardware wallets are probably the most secure option available, though they are also a somewhat pricier solution.
Be advised that the information here only scratches the surface on EOS and cryptocurrencies in general. I recommend you read as much as possible. Cryptocurrencies are the future, and if you’re reading this guide you are already lightyears ahead of the curve.
Come back soon because more content like this is always coming! If my work helped you or gave you something to think about, share it with others:
Sharing helps more people find my articles, and I’d love to be able to assist as many people as possible with cryptocurrencies. Also, if you have any ideas for future articles or specific questions, I’d love to hear them. One last thing: if you’d like to chat with me in real time, check out my Discord!
Best of luck, and happy trading!
< Previous Next >