< Previous Next >
How to Buy Substratum (SUB): Quick Guide
How to Buy Substratum (SUB): QuickÂ 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, Binance, KuCoin etc., 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 donâ€™t, I hope you find this article useful! Remember: Always do your own research. This is not financial advice, so do not make any purchases or sales based on the opinions written on this website.
Editor's Note 06/04/2019: Since the time of this writing, this coin has been delisted from Binance and can no longer be traded there.
This guide will teach you how to buy SUB from square one (i.e., all you have is fiat money, no cryptos). It will also work for most other cryptocurrencies, but as Iâ€™m interested in SUB right now, I am going to write a quick foreword about it and then weâ€™ll get right into the meat of the guide.
A Little About SUB - WhyÂ 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. To describe the Substratum Network, it is best if we start out with their own words:
WE ARE THE FOUNDATION OF THE DECENTRALIZED WEB. Substratum is an open-source network that allows anyone to allocate spare computing resources to make the internet a free and fair place for the entire world.
These are concepts that I have written about before - for example, Golem is all about providing a platform for people to buy and sell computing resources. So, what makes Substratum different? Well, itâ€™s actually pretty simple. Substratum is focused on serving content to the internet rather than solving computationally difficult problems such as rendering.
Before I get into this, letâ€™s talk about the internet as it currently exists today. Itâ€™s a largely centralized affair - there are middlemen and gatekeepers who can easily stop a person from getting their content out. If you read my content regularly, you are probably well aware for my disdain for middlemen and small-minded censors; indeed, rosecrypto.com exists almost entirely because the scumbags at Medium shadowbanned me for unknown reasons.
Think about how many ways that the modern internet allows for censorship. The one most people think about is the â€śNet Neutralityâ€ť angle - the idea of ISPs censoring content they donâ€™t like or slowing down certain sites. Thereâ€™s also the idea of organizations like ICANN - and, below them, registrars - simply seizing your domain at the behest of governments or third parties who do not like your content. This has already started happening to people hosting legal-but-controversial content, and I can only imagine that the problem will get worse as times goes on.
One issue that people tend to discount is how a few select entities control how much reach your content has. Companies like Google, Facebook, Twitter, and Medium control the majority of the average personâ€™s internet experience. If these groups dislike your content and decide to deplatform you, you might as well be invisible. By way of example, my own traffic has been tremendously lowered ever since losing my Medium account. Itâ€™s not that my content isnâ€™t on the internet anymore - itâ€™s much more insidious than that. People can get to it, but far fewer people will ever get the opportunity to know it exists in the first place.
This sort of censorship is pernicious, and I strongly support any project that can help to combat it. Substratum, therefore, catches my attention in a big way; the people behind it seem to have a very similar view on these issues. To quote their whitepaper:
The platforms that host our networked public sphere and inform us about the world are unelected, unaccountable, and often impossible to audit or oversee.
Here, here. So, now that the problem is laid out, what can Substratum do to help solve it?
The Substratum Network
The idea has been referred to as â€śWeb 3.0â€ť - a decentralized web, one that is not beholden to any gatekeeper and instead is owned and operated in the same fashion as a blockchain (i.e., not by any particular individual or corporation). Substratum works through an application that is, believe it or not, downloadable in the form of an early-access open beta. This software is available for all major operating systems (Windows, Mac, and Linux). This sort of cross-platform support may seem basic, but itâ€™s still a good sign that these people are serious about development. Another good sign is that this code is open source and therefore can be audited by anyone.Â
Substratum uses a network of nodes (peer-to-peer computers) to deliver cryptographically secure content to users. The whitepaper suggests that the Substratum Network will obsolete existing technologies such as VPNs and Tor.Â
The basic idea here is this: by using something called â€śSubstratumHost,â€ť the Substratum Network will totally revolutionize the concept of web hosting. Instead of paying for web hosting from a company (Vultr, DigitalOcean, Amazon, etc.), you are paying various individuals in the decentralized network to host your content. According to the Substratum whitepaper, this has a number of advantages over the current state of affairs:
- Costs are reduced. You only pay for the hosting you use, i.e., when people visit your site (more on this in a moment).
- Load times are faster. This is mostly theoretical, but the idea is that the Substratum Network will make sure that nodes that are geographically near to you are the ones that are serving you content.
- Downtime is eliminated. A decentralized network never goes offline. It has occurred to me that this is something like having Cloudflare-on-steroids backing up your site - Iâ€™m curious if a DDOS could even be effective against such a thing!
What about the SUBÂ Token?
SUB is an ERC-20 token. This makes me look at it with a bit of a critical eye - doubly so in this case because, as far as I can tell, there are no plans to migrate to its own blockchain as EOS did.Â
This token is, like any utility token, intended to facilitate a platform - in this case, the Substratum Network will use SUB as a currency that is used to pay for renting out unused computing resources to host websites. Because tokens are theoretically useful for micro-transactions, this reduces the â€śoverpayment problemâ€ť that often exists in traditional web hosting - with Substratum, you will only pay for the resources you are actually using.
The SUB token has been described as a â€śproof-of-stakeâ€ť coin, like Ark and QTUM. This means that those who run nodes or host will be able to earn more SUB. This is sometimes referred to as a â€śdividendâ€ť because the amount of tokens you earn is a ratio of how many tokens you already have; this should not be confused with proof of work or mining.
Unfortunately, this is all theoretical right now - it is possible to run a node, but there is currently no reward for doing so. Indeed, Iâ€™m not entirely sure how they are going to implement this with an ERC-20 token, and as a result, referring to it as â€śproof-of-stakeâ€ť might be a bit inaccurate. This sort of thing isnâ€™t that surprising; like most other cryptocurrency projects, Substratum is still in beta, and it will take some time to iron out the details. With that said, if youâ€™re looking for a proof-of-stake coin which will let you earn dividends right now, youâ€™re probably going to want to look at something like Ark instead.
The current state of SUB is that it is a utility token that isnâ€™t particularly utilized at the moment but may end up as the driving force behind one of the most important web projects of the next decade. With that in mind, letâ€™s do a little theorizing as to where the price can go. At the time of this writing, BNB is ranked #18 on coinmarketcap with a market capitalization of $1,227,001,628. If SUB had BNBâ€™s current market cap, it would be worth around $3.20 per SUB. Thatâ€™s about 11 times the current price!Â
Iâ€™ve used BNB for a reason here - it is my favorite utility token because it is heavily used in a wildly successful platform. Lately it has become a sort of standard of comparison that I use when judging any utility token. Could SUB match or overtake BNB? In this case, I honestly believe it is possible on a long enough timeline! If Substratum really does bring about Web 3.0, thereâ€™s no question in my mind that SUB will skyrocket in price.
Now that you understand the basics of the Substratum Network and the SUB token, letâ€™s learn how to buy some!
Buying SUB: BasicÂ Strategy
To date Iâ€™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. If you are American, Binance is currently not accepting new American clients - use KuCoin instead. 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.
- Move your ETH to Binance. Once it has confirmed, you can now easily use the ETH/SUB trading pair to buy as much or as little Substratum as you want. More on trading pairs later.
- Send your coins from Binance to a safe SUB 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. I personally believe Coinomi to be the safest and most convenient wallet for many cryptocurrencies. Because SUB is an ERC-20 token, this step is a little more complicated than usual - I will give details on this later in the guide. The long story short is that itâ€™s possible, with some effort, to use Coinomi, a Ledger Nano S, or a Trezor to store SUB.
Now, if youâ€™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 youâ€™re completely new to cryptocurrencies, you might be a little lost - thatâ€™s fine! You wonâ€™t be by the time you finish this guide. Iâ€™ll go step by step:
Starting Out OnÂ 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, thatâ€™s outside the scope of this guide, but I do have a country-by-country guide which may help you if Coinbase doesnâ€™t work in your area.
All you have to do here is go to Coinbaseâ€™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 arenâ€™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 SUB (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 BuyÂ First?
In my opinion if you intend to buy lesser-known coins like SUB, 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 SUB, or your BTC for SUB, but youâ€™d have to perform another step if you wanted to trade your LTC for SUB (and that means more fees!). Obviously we donâ€™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: WhatÂ 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 SUB (Changelly and Kucoin are two reputable examples). There are other reputable exchanges as well, but be careful about using lesser known exchanges - scams do exist! 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.
Once your account is made, you should set up two-factor authentication here via Google Authenticator. Itâ€™s safer, and you will need it to transfer coins out of Binance anyway. More on this later.
After your Binance account is made, click â€śFundsâ€ť at the top right, then â€śDeposits Withdrawalsâ€ť beneath it. Find Ethereum in the list and click the â€śDepositâ€ť button on the far right. You should end up with something that looks like this:
Unlike the picture, there will be an â€śETH Deposit Addressâ€ť 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 â€śaddressâ€ť 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 â€śreceiving addressesâ€ť which point towards the same wallet.
The address listed here is Binanceâ€™s â€śreceiving addressâ€ť for your Ethereum. To the right of it is a â€ścopy addressâ€ť 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 youâ€™re sure youâ€™re sending to the right place, input the amount of ETH youâ€™d like to send (if you just want to buy some SUB, you should send all of it) and click â€śSend.â€ť
Optional Trick: Using GDAX To Save Money OnÂ Fees
GDAX, or â€śThe Global Digital Asset Exchange,â€ť is the actual exchange which backs Coinbase. You can use it to save a lot of money on fees if youâ€™re willing to spend a few extra minutes getting verified. Follow this link and click â€śDEPOSIT.â€ť Click â€śCoinbase Accountâ€ť at the top and deposit all your ETH from Coinbase into GDAX.
Once youâ€™ve done this, you can click â€śWITHDRAWâ€ť in GDAX and send your funds from GDAX to Binance. Fees are significantly reduced with this method!
I Sent ETH to Binance - NowÂ 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 â€śconfirmationsâ€ť 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 â€śconfirmationsâ€ť next to the number of required â€śconfirmationsâ€ť next to it. Be patient - your SUB is nearly in hand!
Once you have the required number of confirmations, itâ€™s time to trade your ETH to SUB. This is blessedly simple. In the front page of Binance, click â€śETH Markets.â€ť Search for â€śSUB/ETHâ€ť in this list, and click it. Now you are on the trading page. In the bottom left under â€śBuy SUBâ€ť, click â€ś100%â€ť below the â€śAmountâ€ť field.
This indicates to Binance that youâ€™d like to trade all of your ETH for a commensurate amount of SUB 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 itâ€™s not guaranteed that someone will buy at the price youâ€™d like. Your order will remain open until itâ€™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 â€śLimitâ€ť order for some SUB.
I Placed My Order! Am IÂ Done?
If you want to be done now, you can be - but there are more steps if you want to be security-conscious. You may want to check under the â€śOrdersâ€ť and â€śOrder Historyâ€ť tabs that the order went through - if you placed a Limit order at the default price, it probably did. Once you have your SUB in your Binance account, you can see them under â€śFundsâ€ť â†’ â€śDeposits Withdrawals.â€ť You can click â€śHide 0 Balancesâ€ť at the top to clean up the screen of coins you donâ€™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 wouldnâ€™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 PrivateÂ Wallet?
In Binance, go into the â€śDeposits & Withdrawalsâ€ť tab, then click â€śWithdrawalâ€ť to the far right of the â€śSUBâ€ť row. By now it should be clear what youâ€™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 â€śMaxâ€ť button to the right of the Amount field. Note that once you click â€śSubmit,â€ť you will need to use your two-factor authentication via Google Authenticator, an Android app. I recommend you do not use your actual day-to-day phone for this purpose. These days you can get an inexpensive Android phone for around 30 dollars - this is an investment worth making for security purposes. You can keep the battery removed from the phone when youâ€™re not using it, and connect it to a network only for cryptocurrency purposes. As a bonus, if youâ€™d like, you can use this phone for the Coinomi wallet.
It is possible to get SUB working in Coinomi right now and the process is fairly straightforward. In my opinion this is the preferred method, especially if youâ€™re willing to buy an Android phone solely for cryptocurrency use. However, if youâ€™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 SUB.
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 itâ€™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 youâ€™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 Substratum and cryptocurrencies in general. I recommend you read as much as possible. Cryptocurrencies are the future, and if youâ€™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 Iâ€™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, Iâ€™d love to hear them. One last thing: if youâ€™d like to chat with me in real time, check out my Discord!
Posted: Jul 19, 2018
< Previous Next >