So you want to buy some DAO
So you want to buy some DAO. Good for you. It sounds pretty cool right? I’m a big fan of decentralized autonomous democracy. It also gives a lot of entrepreneurs an alternative to either the VC or bootstrapping route (aside from crowdfunding, which can be a headache). You have some money in the bank and you want to get you some DAO. A few things you’re going to need in order to do that. You also need to decide how much privacy you need. First off you’re going to need to get you’re hard earned fiat currency (USD, AUD, EUR etc.) and convert it into a cryptocurrency.
So you have some options here. I’m going to go over a few of the ones that I looked at when I was picking one. I will also tell you that if you’re on the road like I am it’s a much bigger pain then if you aren’t.
So I ended up going with Coinbase (referral link). It isn’t available in every country, but it is in the USA. Although I was helping out a friend get setup in Australia and it isn’t available here. You can do a bit without proving your identity, but if you want to start shifting more than a couple of hundred dollars you are going to need to put in a lot of identifying info (e.g. ID scans, phone number, address). There is a limit of $40USD/day on debit card transfers, which is a bit of a pain, but you can transfer in a lot from a bank account with no fee in a few days which is very nice. If you want to keep transferring in via your card you can set it to transfer in the same amount every day until you disable it. Although you’re paying about 4% on your transfers as opposed to 0% on bank transfers.
Coinbase has a great app that you can use as a wallet as well. Although I’m not sure how I feel about keeping all of my BTC (bitcoin) in an online wallet. The 2FA (2-factor authentication)) is pretty good too, and it accepts foreign phone numbers. Although if you register with an IP overseas you have to send in a copy of your passport or drivers license (as I figured out the hard way). So if you are overseas you might want to use a VPN to get around that hassle.
Circle is a pretty popular exchange, and I saw some good reviews on it. However I was unable to even login because they kept saying my phone number wasn’t properly input. I tried it in every way I could think, and it still didn’t work. I currently have an Australian number, so that might be it, but I saw a lot of people online that had the same issue. I’m not comfortable using a service that requires 2FA that isn’t rock solid, but it might work great for you. Who knows?
I actually tried again while writing this and I think that the issue is that their phone number verification is checking for phone numbers in US format. For instance the area codes in Australia are xx instead of xxx. There are a bunch of countries like that and Circle should fix it if they require SMS verification to open an account and they want to say that they’re a worldwide provider.
247 Exchange was actually the first exchange I tried, when I thought this whole thing would be much more straightforward than it was. The interface is pretty basic, but that doesn’t bother me much, but the fees were pretty high. Also the identity verification was pretty slow. They took long enough that I ended up going with a different exchange both for me and my friend. You get pretty large initial limits though.
On further inspection it doesn’t look like it supports American bank accounts. Also I couldn’t find out any way to transfer bitcoins out of it. Which is pretty weak. However that might have just been because I didn’t have any BTC there.
So with Cex.io I had some issues getting my documents together. Mostly it was that I was working at a cafe at the time and I didn’t have my passport card with me. I’m going through the identity verification now, so hopefully it will work out. I already have an account with Coinbase, and I like them, but I like the idea of being on two exchanges in case one of them has issues. I also keep some BTC on a mobile wallet (which we’ll cover in a bit). My friend ended up going with cex.io (on my recommendation) because they accept Australians, and I think they do most countries as well. They are a very reputable exchange, although they aren’t especially loved in the cryptocurrency community because they were big in cloud based bitcoin mining. That is mostly politics in the community though and has little to do with how safe your money is, or how good their service offering is.
So once you’re verified (name, ID, address, proof of residency like a bank statement, and a photo of you holding your ID), you have a very large limit on debit card transactions. It was about $3000/day for my friend. Although you end up paying about 4% on the transactions. You can add a bank, but it’s just a SWYFT transfer (international wire transfer), which is pretty pricey. I’d probably just go with the card. It’s too bad they don’t have like an ACH transfer or whatever the equivalent is internationally. It’s probably a international banking thing.
Update: While I’ve been writing this I found out that cex.io can’t do business with residents of Oregon. I maintain a residence in another state, and could have just added that address, but they didn’t mention it the first time I filled out their info. You also have to submit a ticket to delete an account, which is awesome. I probably won’t be going back there again. However if you’re international they are still a good option.
I like Bitstamp’s overall look. It’s pretty straight to the point. I haven’t been able to verify my identity yet because they have very low timeouts set for their verification document uploads. I’m not sure if that is on purpose for security reasons, it can help prevent types of DOS (denial of service) attacks, or if they just didn’t think about it. I’m looking forward to getting on some better internet and then checking out their offering.
I took another look. They are on the list of places that don’t allow people with residency in Oregon to buy bitcoin. So I’m in the process of switching my bank to another state then I’ll try again.
We will continue next time with how to get your Ethereum wallet setup as well as some tips (hard won tips I’ll tell you) on how to minimize the time it takes to download the blockchain for the Ethereum wallet, also how to get DAO.