y dad and I were talking the other day about Monero, about how it improves on Bitcoin’s weaknesses. He said he wanted to buy a little, just to try it out. He asked, “What’s the website where I can buy Monero?”
Unfortunately, it’s not that simple. As of late 2016 there is no single website to buy Monero with dollars or euros (though this is changing via Bitfinex). Instead, almost everybody first has to buy Bitcoin and then go to an exchange to trade Bitcoin for Monero.
Basically, buying Monero requires a two-step process:
- Trading real world currency (dollars, euros, etc.) for Bitcoin at one exchange
- Trading Bitcoin for Monero at a second exchange
Test purchases vs. real purchases of Monero
These two steps look different for test purchases vs. real purchases. Test purchases are just for trying things out, like what my dad wanted. The best test purchase gets a small amount of Monero as easily as possible. Little attention is paid to fees. In contrast, real purchases of Monero are all about getting the best possible price.
Test purchases are best done through a website called Shapeshift. Their service is super simple; you don’t even need to register on their website. You just send them some Bitcoin and they send you back some Monero. Unfortunately Shapeshift charges really high fees, which is fine for something like a $5 test purchase, since losing 7% to fees isn’t a big deal when it means losing 40 cents.
But for real purchases of Monero, that same percentage can become a lot of money (7% of $500 is a loss of $35). For larger purchases, you want to keep your fees as low as possible, which means using a real exchange like Poloniex. This option is a little more complicated, but using Poloniex would mean that same $500 purchase of Monero would cost you around 1% in fees (a loss of just $5).
This article will show you how to buy Monero: first simple test purchases at Shapeshift (Part I) and then low-fee purchases at Poloniex (Part II). Let’s get started!
Part I – How to Buy Monero with Shapeshift
Shapeshift is the simplest quickest way to buy Monero. Here’s a short video:
Step 1: Purchase some Bitcoin
First you need to buy some Bitcoin. This process will be different for different people. Those in Europe will use a euro exchange like Kraken, while those in Japan will use a yen exchange like Coincheck, etc. For this article I’ll show the best option for people in the United States, which probably means using the website Coinbase.
It was a tricky decision about whether to use Coinbase or Circle for this article. Circle is a friendlier company overall, and their website is easier to use. However, Coinbase has an actual exchange attached to their website (GDAX) which is a better segway into Part 2 of this article (low-fee purchases), so that’s the option I went with.
To buy Bitcoin, first go to Coinbase.com and create an account. Registration is pretty straightforward, requiring things like your name, email, and a verification of your identity (eg: pictures of your driver’s license, etc). Once your account is created and verified, you’ll need to add a funding source like a bank account and/or a debit card. Once this is set up, you can buy some Bitcoin.
From the main account screen, click the Trade link in the upper left.
Here you can buy Bitcoin with just a few clicks. Just type in the amount you want to buy. If you want to purchase $5 worth of Bitcoin, you would just type the number “5” into the USD box and click the blue “Buy” button.
Note that small purchases (like $5) are often instant, but large purchases (like $500) require an ACH bank transfer, which can take up to a week to get your funds. That said, you shouldn’t be using this site for large purchases anyways since the fees are so high. Large purchases should use an exchange like GDAX as seen in Part II.
Hopefully everything went swimmingly and you’re the new owner of some Bitcoin.
Step 2: Set up the trade on Shapeshift
Alright, now it’s time to trade your Bitcoin for Monero. To do this, you will first need a 95-character Monero address, so that Shapeshift can send the Monero back to you. For test purchases, a web wallet at MyMonero.com works great.
Related article: How to install the Monero wallet and get an address
Next, you’ll want your Bitcoin address from Coinbase, which can be found on your main account screen. In the upper right click on the link “Wallet address”. A string of characters will pop up like this:
1DcCPBg3sgkYupyrHHS4n7Qohrjij7KnpJ. That is the address you’ll need for Shapeshift. In case your trade has a problem, they will send the Bitcoin back to that address.
Next, you’ll go to ShapeShift.io and set it up for Bitcoin-to-Monero trades by clicking on the two big currency logos, and then clicking “Continue”.
Now Shapeshift will ask you for your Monero and Bitcoin addresses. Paste both of these into the boxes (ignore Payment Id) and click “I agree to the Terms”. When everything is ready, click “Start Transaction”.
On the next page you’ll see the flashing text that says “Awaiting Deposit”. This means the Shapeshift website is ready for you to send them some Bitcoin. To send it to them, look for the string of text after “Send To This Address”. This is a Bitcoin address that Shapeshift created for your trade. Copy it to your clipboard.
Step 3: Send the Bitcoin to Shapeshift
With Shapeshift awaiting a deposit, go back to Coinbase. On the “Send Funds” page, paste the Shapeshift address into the “Recipient” box and type the amount of Bitcoin to send into the “Amount” box. For example, after buying $5 of Bitcoin, my BTC Wallet has a balance of 0.00792725, so I would type that amount into the box and click the blue “Send Funds” button. Click “Confirm” on the box that pops up, and your Bitcoin is officially sent to Shapeshift.
Finally, go back to your Shapeshift trade. Hopefully everything went smoothly, and the white “Deposit Received” has turned green with a checkmark, meaning Shapeshift got your funds. Eventually both “Exchange Complete” and “All Done!” should receive checkmarks too, which means Shapeshift has exchanged your Bitcoin and sent Monero to your wallet. Nice!
Note that this can take longer or shorter depending on how much money you sent. It can be helpful to refresh your browser if this process seems to be taking a long time.
Step 4: Receive your Monero test purchase
The last step is to go to your Monero wallet and wait for the money to arrive from Shapeshift. This requires waiting for some confirmations on the blockchain, perhaps 15-20 minutes. But eventually the balance will show your svelte new Monero.
Congrats! If this is your first time owning Monero, take a moment to play around with your new funds. Get a feel for how transactions work, maybe creating a second MyMonero.com wallet and sending some money back and forth between them. There’s no rush. Perhaps tip my website some Monero for helping you get this far.
Shapeshift’s big hairy gorilla: fees
Despite its ease and anonymity, there are some weaknesses with the Shapeshift process outline above, specifically that their exchange rate is pretty bad. My $5 purchase at Coinbase – exchanged through Shapeshift – resulted in 0.48 Monero (XMR) in my wallet. At the time of this trade, one Monero was worth about $9.62 USD. Multiplying my balance by this price means my wallet is currently worth $4.62. Yes indeed, this process resulted in Coinbase and Shapeshift charging me a combined 38 cents – a loss of over 7% in fees.
This is fine for test purchases, but for real purchases we can do a lot better.
Part II – How to Buy Monero on Poloniex
To keep fees as low as possible, we’ll buy both Bitcoin and Monero on real exchanges. Here’s a short video:
Step 1: Transfer money to the Bitcoin exchange
We still need to start with Bitcoin. Those in the United States can go to GDAX.com, the exchange connected to Coinbase.com. Once logged in with your Coinbase username and password, you will see the following:
If this is your first time, all of this can look really confusing. The truth is: it is very confusing, and really not worth your time to master. Indeed, some people spend their entire lives learning how to read market conditions and feel the overall sentiment, so I don’t suggest it to most people. That said, the process buying Bitcoin can be made very simple, as shown below.
The first thing you need to do is transfer US dollars into your GDAX account. You can do this by clicking on the “Deposit” link in the top left. Next you’ll see a number of sources for transferring funds. Click on the “Bank Account” link on the left. If you’ve set up your Coinbase account in Part 1, your bank account information should already be filled in here. All that’s left to do is fill in the amount to transfer in the “Amount” box and click the big blue “Deposit Funds” box at the bottom.
One click and an ACH bank transfer will be scheduled. This process is free, but it can take 5-6 days to complete. GDAX will give you an estimated completion date, and will send you an email the day that the funds arrive.
Step 2: Purchase Bitcoin on the GDAX exchange
Alright! If your transfer has completed and you have US dollars in your GDAX account, it’s time to get your hands dirty on an actual exchange. To start, navigate to the GDAX BTC-USD trading area (this is the default screen). GDAX also offers Ethereum and Litecoin, so make sure you’re in the Bitcoin – US dollar trading area.
Here’s a quick description of the trading screen. Most of this stuff is not important:
As a basic outline, the list of red numbers are people trying to sell Bitcoin while the green numbers are people trying to buy Bitcoin. If you look between the red and green prices, you’ll see a gap. Trades on that gap are what determine the current price of Bitcoin, as seen at the top of the page. Your purchase should get a rate similar to that price.
To buy Bitcoin at GDAX (see picture below):
- Select the green “Buy” option
- Click the “USD” option
- Type in the amount of money you want to spend (eg: “100” is $100 USD).
- Click “Place buy order”
One click and you’re done. The exchange will quickly “fill” your buy order with a sell order inside the OPEN ORDERS section, and suddenly the BTC balance in your upper left will change from zero to whatever amount you bought. Nice!
Coinbase will also charge you a fee of 0.25%, a rate much better cheaper than buying it at a site like Shapeshift. So buying $100 worth would result in you receiving $99.75 worth of Bitcoin, a loss of 25 cents. Not bad! This rate is even cheaper for larger purchases, as seen on GDAX’s fees page.
Note 1: if you really want to be a fee jedi, GDAX has an option to buy Bitcoin without any fee at all. Their fee for “takers” is 0.25%, but their fee for “makers” is free. You can become a “maker” by creating a Limit buy order and waiting for a Bitcoin seller to come to you, in contrast to creating a Market order and just picking up an offer (eg: making an offer vs. taking an offer).
Note 2: Naturally, some people will want to buy Bitcoin at the best rate, so they will try to adjust their purchase timing to the price changes. For example, they may think the price is going down, so they might delay their purchase. Or they might think the price is going up, so they may panic and try to buy Bitcoin as fast as they can. For 95% of people, this is a complete waste of time and energy. Nobody really knows where the price is going, so the best advice for most people is to ignore the current graph, trends, etc and just buy the Bitcoin. The slight advantages of getting a better price is just not worth the headache of ending up with a worse price. No need to get clever. Just buy the Bitcoin at whatever price it’s at.
Step 3: Transfer your new Bitcoin to the Poloniex exchange
Now that you have some Bitcoin, you’ll need to actually move it to the Poloniex exchange, the biggest exchange for Monero. This part of the article is where the buying process for dollars, euros, or yen looks the same.
Begin by creating an account at Poloniex, which basically just means giving them your name and email. They don’t touch government currency (unlike Coinbase, for example) so their registration process is much more relaxed.
Once you’ve clicked the link in the confirmation email they send you, go to Poloniex’s Balances page. This area is basically just a list of all the coins traded on Poloniex. Since you’re depositing Bitcoin, you need to find Bitcoin on the list (under B) and click the link next to it that says Deposit. A box will appear with your unique Bitcoin deposit address. Copy this to your clipboard and go back to GDAX (or whatever exchange you used to buy Bitcoin).
You are going to send to this address whatever amount of Bitcoin you purchased. So at GDAX, click the Withdrawal link in the upper left and select the “BTC Address” tab. Now paste the Bitcoin deposit address you got from Poloniex into the “Destination” box and type in the amount of Bitcoin you want to send. Fill in your 2-factor authentication (if you have it enabled) and click the blue “Withdrawal funds” button.
Just one click and your funds should be on their way to Poloniex. It will take a bit of time, perhaps 15 minutes or more, for your Bitcoin transfer to complete.
Step 4: Trade Bitcoin for Monero on Poloniex
Now that your Poloniex account is set up and you’ve transferred some Bitcoin over, it’s time to actually get some Monero! To do this, go to Poloniex’s BTC-XMR exchange. Here you’ll be greeted with a historical graph of Monero’s changing price.
Try not to get too confused by the lines and colors. The buying process can be made very simple. Scroll down to the “Buy XMR” box in the lower left side. If you’re logged in and your transfer has completed then you’ll see your current Bitcoin balance.
To trade your Bitcoin (BTC) for Monero (XMR):
- Click the underlined number next to “You have”. This will set your trade to include your entire Bitcoin balance.
- Click the underlined number next to “Lowest ask”. This will set your trade price to the lowest current seller.
- Click “Buy”.
You just exchanged Bitcoin for Monero. Nice! You can see your new balance in the “Sell XMR” box (eg: “You have: 9.8894 XMR”). Be aware that there often isn’t much Monero for sale at the very lowest price, so you may need to repeat steps 1-3 a few times until all your Bitcoin is exchanged.
Note 1: if you want to be a fee-jedi, realize that makers again pay a smaller fee than takers on Poloniex (though it isn’t much – just 0.15% versus 0.25%). Be a maker by creating a limit order and waiting for the sellers to come to you.
Note 2: if you’re purchasing a larger than average amount of Monero, perhaps $1000 or more, it’s a good idea to choose a higher price than the minimum so you buy more Monero in a single click. Otherwise, a sequence of large buys (or a large limit order) could telegraph to the sellers that there is a sudden demand, and they’ll move the price higher on you (sneaky sellers). Basically, you should do your best to put all Bitcoin into a single order and pull the trigger just once. That way, sellers will have less time to react. That said, if you’re purchasing an extremely large amount of Monero (eg: $100,000) then there are additional things to be aware of, but such a purchase is honestly beyond the scope of this article.
Note 3: similar to the GDAX process, some people will get distracted by the pretty charts and lines and buying and selling and try to time their purchase to get the very best price possible. For 95% of people, this is a mistake. Timing the market will likely cause more stress than celebration. Market conditions are extremely difficult to predict, so almost everybody should not try to game the price swings. Just buy the Monero at whatever price it’s at and go to step 5.
Step 5: Move your Monero from Poloniex to a wallet
The last thing to do is move your new funds into a wallet. Significant purchases of Monero should almost always be sent to an address generated by one of the official wallets available at GetMonero.org/downloads/.
Related article: How to get a wallet and address
Got a wallet? Sweet. Go back to Poloniex’s Balances page and find the box for Monero. You can do this by typing “XMR” into the search box, or by clicking the “Hide 0 Balances” option at the top. In the Monero box you’ll see a link for “Withdrawal”. Click on it and the box will enlarge, allowing you to withdraw Monero to your wallet.
In the area labeled “Address”, paste your Monero wallet’s 95-character address (ignore the “Payment ID” box since you’re not sending this to an exchange). Next, click on the underlined words “You have xx.xxx XMR” to put your entire Monero balance into the “Amount” box (note the 0.2 XMR fee). Finally, click “Withdrawal”.
If you have 2-factor authentication enabled, Poloniex will prompt you to enter a code. And you’ll also need to click a link in a confirmation email that Poloniex sends you. With those out of the way, your funds will begin to transfer to your Monero wallet.
Know that the transfer process can take 15-20 minutes to complete. To check on its status, you can go to the Withdrawal area on Poloniex’s History page. Eventually your transfer should change from yellow (Pending) to green (Complete). At this point, your funds are probably still at least 10 minutes away while your wallet waits for confirmations from the Monero blockchain.
While you’re waiting, let’s total the fees we paid in this recent Monero purchase. 0.25% paid to GDAX plus 0.25% paid to Poloniex, plus the 0.2 XMR withdrawal fee from Poloniex gave us 9.6647 Monero, a sum worth about $97.51 at the time of this article being published – a loss of just 2.5% in fees. This is significantly better than the 7% in fees paid to Shapeshift. Fees are even better for larger purchases since 80% of the fees in this example were from Poloniex’s flat withdrawal fee. Using these exchanges to purchase $1,000 of Monero would cost just 0.7% in fees.
Did the Monero from Poloniex arrive in your wallet? I tip my hat to you, amigo. You’ve officially finagled the world’s greatest currency at its lowest possible price.
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