Most cryptocurrency users are looking to experiment with different trading platforms. They’re looking for the best coin offerings, lowest fees and perhaps the ability to margin trade.
Today, most exchanges are relatively similar in these respects, but recent developments in the world of decentralized exchange platforms have led to some exciting new options.
One of these options is EtherDelta.
Visit the EtherDelta site and you’ll immediately be confronted by a choppy looking interface. It’s a good thing to remember that looks don’t count for everything, and in terms of ICO token trading, EtherDelta is the place to be.
In the following, we’ll provide a bit more context and explain step-by-step how to get started on EtherDelta.
Why Use EtherDelta
First off, what is EtherDelta? And why should you care about it?
EtherDelta is a fully decentralized exchange designed for the Ethereum Network. The decentralized part is key, as it means you don’t have to trust an administrator to hold your funds. Your money is held in a smart contract in such a way that you and only you can deposit/withdraw/trade. A decentralized exchange also provides better security and helps you avoid the potential next Mt. Gox.
Okay, so that’s what it is, but why so much hype?
Security benefits aside, EtherDelta allows early (and in some cases expanded) access for investors. To quote the Crypto Beak YouTube channel:
“This is the best exchange known to mankind, this is where pretty much all the newest coins are available to buy way before they make it to Bittrex. If you want to be in at the beginning of a new mission before the rocket ship has even been ****ing built this is where you want to be.”
This is all sounding great and you may be thinking, why aren’t decentralized exchanges more popular, easy to use, or widely adopted?
Andreas Antonopoulos recently answered this question on The Kevin Rose Podcast.
“Doing a decentralized exchange between digital currencies is easy. But doing one that includes fiat is almost impossible because you have to somehow hook into the existing banking system (which creates a single point of failure) and the promises (transactions) they make are soft (incompatible with the blockchain).”
In short, this is why decentralized exchanges aren’t more “mainstream”. EtherDelta is definitely less user-friendly than Coinbase or Polonium, but it also needn’t intimidate you.
Getting Started with EtherDelta
In order to use the EtherDelta exchange, you need to have an ETH compatible wallet. Most people use the MetaMask chrome extension (creating a wallet that allows you to use Dapps natively), but you can also import a wallet that you’ve generated via myetherwallet.com.
Armed with your wallet, you’re now ready to start the process of trading on EtherDelta.
Step 1: Create an account.
Go to the top right hand corner click on “Select account > New account” as shown in the image below.
You will be prompted to log in and once this is complete, you will be the proud owner of an ethereum wallet on EtherDelta.
At this point, you should receive a pop-up message with your public and private keys. As you know, security of your keys is of utmost importance. Clearing your browser cache can delete your keys forever, so be careful.
Step 2: Select the coin you intend to purchase.
On the left-hand side of the screen under “Volume”, click on the token you wish to purchase.
If what you want is not listed, you can select “Other” at the bottom and use the embedded video below as a guide (from 4:00).
Step 3: Deposit your funds
This step is challenging for many people, so pay attention to the details.
What you want to do is deposit some Ether. Other coins cannot be purchased directly from your external wallet, so you need to deposit funds into a smart contract on the blockchain. This can be done by transferring money in, as shown below. This typically takes a few minutes to go through – be patient if it doesn’t, EtherDelta is known for being laggy.
Very important note: when your crypto assets are “on” the exchange, do not clear your browser history. If you do this and the funds are not safe in your wallet, you will lose them.
Step 4: Purchase your coin
From the top menu bar, select the coin you want to buy.
There are two ways to go about this, and the next thing you want to do is look at the order book. Buy orders are in green and sell orders in red. You can simply accept someone else’s sell order or you can post your own buy order indicating how much you want to buy and at what price. All prices are listed in Ether.
Note: be very careful with decimal points if you’re placing a buy order. Avoid overpaying by copying and pasting an existing order from the order book. Also, be sure not to spend all of your Ether as you need a little extra to pay “gas fees” for using the network.
Step 5: Withdraw your coins
To start the process of removing your money, you need to do Step 3 in reverse. This means getting your remaining Ether (or new coins) out of the smart contract and into your wallet.
This is done by hitting “Withdraw”. Every time you hit withdraw (or take certain other actions), you will get a confirmation notification from your wallet.
Step 6. Transfer funds from your Ethereum Wallet
Lastly, if you wish to move your money, you can click “Transfer” and enter the amount of the coin you want to transfer. Right next to that box, you enter the Ethereum address the coins will be sent to and then click “Transfer”.
Need more? The best youtube tutorial that we’ve come across is produced by Crypt0. Here it is:
Don’t forget that EtherDelta operates on the blockchain and therefore each order, deposit and withdrawal costs a regular ethereum transaction fee.
A lot of people complain about EtherDelta being confusing, slow or just downright ugly. But the user interface (of wallet software and the platform itself) will improve in time; it’s still the early days of crypto after all. EtherDelta may not be the perfect solution for novice users, but the platform has a ton of potential when it comes to cryptocurrency trading.
For those who take the time to learn how to use it and deal with its imperfections, there is everything to be gained.