We return to our heroes deep in their quest to buy DAO (or bitcoin, or just reading stuff on the internet to justify their curiosity, no judgement).
So you deposit some money in your account what’s next? You buy DAO with something called ether. It’s the cryptocurrency of the Ethereum platform. So your first thought might be that you want to go to BTC then get your ether right? That’s what I did, and I would recommend against it. You cannot trade BTC for ether on your exchange. However you can trade fiat currency for it. You take a little hit whenever you convert currency to crypto-currency, and when you exchange crypto-currency for another. It’s not a lot, but it adds up if you keep doing it, also if you’re talking about a bit of money 3%-7% is probably more than you’d care to just throw away on bad planning. So you can buy your ether, then you’re going transfer it to your ethereum wallet. Here is a bit of a digression. I’m going to go over how to convert your BTC to ether for the people that either already have some BTC, or made the mistake (like I did) of not going straight to ether. If you haven’t bought the bitcoin then I would recommend just buying the ether directly from an exchange then transferring it to your wallet, although the wallet setup for Ethereum is the same regardless.
So you want to get the Ethereum wallet to do your DAO transactions all according to plan right? Great! If you’re based in the USA it’s probably not going to be a huge problem. However if you’re overseas, or in an area that either doesn’t have great internet or a lot of people around with an ethereum wallet you’re going to have issues. I spent about two days trying to get my ethereum wallet to sync. I have a couple of tips though to make it easier.
Go here to download the newest version of the Ethereum Mist Wallet. Download the version for your system. I’m going to assume that people are mostly on Windows. If people want a mac version of the walkthrough let me know and I’ll add it, although I don’t have a mac currently so it won’t have a ton of screenshots or anything. The syntax for the commands should be the same (since they’re using Go as a language), although the paths to the stuff won’t be. If linux users want a walkthrough I can do that as well.
Unzip the wallet, then open up the Ethereum Wallet executable. If you’re in the USA and have good internet you’re probably OK. However it’s going to take a long time. The wallet is downloading a full version of the Ethereum blockchain, and on my system that is currently taking up 18.7GB of data. If you want it a bit quicker and you’re on a new install of Ethereum you can do it quicker. Yay! Although you need to do a bit in the command line. So open up your command line/terminal (on mac) and navigate to the folder where your Ethereum wallet is. Then go into /resources/node/geth. Geth is a command line version of the wallet. What we’re going to do is use it to use the fast sync option. So put in
This will do a quicker download of the whole blockchain. However it will only work if you have an empty chaindata folder. If you don’t then run
Then confirm that you want to remove the DB. This will still take many hours though. What I had to do was run it on a VPS instance I run in San Francisco (I installed it first of course). Then exported the whole blockchain
geth export chaindata.bin
Then gzip it and SFTP it over to my laptop in sunny Sunshine Coast. You have no idea if you’re on good internet how low the timeout periods are on some stuff.
Buying DAO with Ether
So you have your wallet right? Pretty easy right? No? Well too bad, now you have to buy your DAO.
So we’re going to go in and buy your DAO. Open up your Ethereum wallet and let it sync, it might take a couple of minutes. Now you can either use the default wallet, or create a new one. I would create a new one if I were you. Create a strong password for it. A short snippet of a quote that you’re familiar with is good, include the punctuation and capitalization.
Now we’re going to back up your wallet. So go to Accounts -> Backup -> Application Data along the top menu. Then backup the folder in there. If you ever make a new Mist wallet install you just need to copy these folders back into here for a new install. I created an encypted .7z file (7-zip) to keep them in, but you might not be as paranoid as me. So now we’re going to get ether with Bitcoin. If you bought ether on an exchange you can just send it to your wallet address now. Click deposit ether using bitcoin. You’ll need to specify the transfer you want. I am also going to save you something that took DAYS to sort out. Make sure when you’re transferring bitcoin that you go abou .1BTC below the max deposit/deposit limit whichever is lower. If you go over you have to contact Shapeshift.io and get them to sort it out. Although their customer service was awesome and sorted me out every time. So now you have some ether right? Settle down, we’re almost done.
So when the DAO started you got DAO by sending Ether to an address on DAOhub. I don’t think that’s how you’d get it today, but we’ll go on with it. So DAO is shown entirely by the ether wallet address that you have. You can put in your ether wallet address on DAOHub and you can see your balance. Make sure you have the right address! You can’t generally get your ether/bitcoin back from people. If you include a refund address and you send it somewhere bogus then I believe it will go back to you eventually.
I learned a lot taking care of this, and am now setup to get crypto-currencies whenever I want. That’s pretty nice. It was a bit of a headache though. I’m not sure I’d recommend it to people, I do prefer transferring bitcoin to my friends to settle up checks and bartabs as opposed to using Paypal or Venmo, or that Square service I couldn’t get anybody I know to use. It’s also international which I like. I also like being able to put some of my cash in Coinbase so that if the dollar tanks I’m not screwed.
Have any other questions? Had some issues yourself? Put it in the comments you wonderful person you.
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.
So if none of these are good options for you, I’d highly recommend this article at 99 bitcoins
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.