Last updated: 16 Dec 2017
If you’ve never traded on a regular fiat currency exchange before, then you may have a tough time navigating cryptocurrency exchanges like Binance. In this guide I will explain many of the features and nuances that will make your initial trading journey easier. Basic technical and financial literacy is assumed. In all examples I will consider NEO as the target cryptocurrency and Bitcoins (BTC) as the transacting cryptocurrency. If you want to learn more about blockchain technology, check out my blockchain ELI5 post. Otherwise hold onto to your seats… you’re about to hop on the NEO blockchain rocket to the moon.
Table of Contents
- Get Bitcoins
- Fund Binance Account
- Learn Trading Basics
- Buy NEO
- Useful Links
1. Get Bitcoins
For most people, getting Bitcoins (BTC) is the first step to acquiring cryptocurrencies like NEO. BTC is the world’s crypto reserve currency, like the role USD plays for fiat. Got some obscure coin? Someone out there is probably willing to buy or sell it for BTC.
There are tons of ways to get BTC, but the easiest way is to use the most established crypto platform in the USA, Coinbase. (If you already have BTC, jump straight to the Fund Binance Account section)
Help me help you! Sign up for Coinbase using my referral code (already linked) and we both get $10!
On Coinbase, you’ll be able to purchase BTC with conventional fiat ways (like bank account and wallet), which I won’t even begin to describe here. I’ll wait here while you buy some.
A few days later…
Okay great! Let’s get those BTC over to Binance, probably the best exchange for acquiring NEO due to their close partnership with the NEO team (check out my writeup on their Binance Coin for more info). Tab on over in your Coinbase account to “Send” and pop in that Bitcoin address from your Binance account with all of your newly bought BTC.
2. Fund Binance Account
What Binance account address, you ask? If you haven’t already, make an account on Binance (disclaimer: my referral link), making sure you have 2FA enabled for the extra security. The great thing about Binance is that even without verification, you are automatically at Lv. 1 which allows a 2 BTC daily withdrawal. Another advantage of Binance over other exchanges is that they offer fee-free withdrawals of NEO (and GAS).
Once you finish creating your account, navigate to your “Funds” page from the top menu. There should be a dropdown that says “Deposits Withdrawals”.
On the “Deposits & Withdrawals” page is where you can view all of your balances for every type of coin that Binance supports, including BTC and NEO. This page also gives you your information about each coin such as Total Balance, Available Balance, and the BTC Value.
Click on the “Deposit” box at the far right of the “BTC” row and the line will expand to show you a Bitcoin address. This is the address where you should be sending your BTC that you bought from Coinbase in the previous step.
3. Learn Trading Basics
The basic transaction elements are so important that I want to give you a refresher here. A basic transaction has 4 key components: buyer, seller, price, and volume. Remember that we are talking about NEO/BTC in our examples.
Buyer: Owns BTC and wants to buy NEO in exchange for it. The lower the price the better for the buyer, as then they can get more NEO for their BTC.
Seller: Owns NEO and wants to sell it in exchange for BTC. The higher the price the better for the seller, as they can get more BTC for their NEO.
Price: The amount of BTC for one unit of NEO. As of this writing, it costs 0.0055 BTC for one unit of NEO.
Volume: The amount of NEO that is to be exchanged. Multiply the price by this amount to get the total transaction cost.
Example: I own 1 BTC and I want to buy some NEO (some say it’s going to the moon). I see someone is willing to sell NEO for a price of 0.001 BTC per NEO (what a deal!). I buy all 100 NEO, handing over 100*0.001 BTC = 0.1 BTC to the seller, who in return gives me 100 NEO. I now have 0.9 BTC and 100 NEO, and the seller has 0.1 BTC.
Here is a screenshot of real BTC transactions taking place on Binance:
In the example from the previous section, I just happened to find a seller willing to sell me NEO. Where did I go? Where was the seller? Exchanges like Binance are basically a giant meeting area where many buyers and many sellers congregate to trade things like cryptocurrencies. The way the exchanges make money is by taking a fee from every transaction; traders are willing to pay that fee because exchanges offer a convenient and secure place to find buyers and sellers.
The top cryptocurrencies traded on Binance using BTC as the transacting currency:
You can see we’ve got all the big names in crypto — including ETH, NEO, and LTC.
Now we’re rolling! We know that buyers and sellers come to Binance to hang out and try to trade their wares, in our case NEO and BTC. Back on Binance, navigate to the “Exchange” -> “Advanced” view for NEO (here’s a link directly to the NEO page), and we should see a night-themed screen with a lot of numbers. It looks complicated but we’ll go through each section.
The left side is a candlestick chart that shows the change in NEO price over time (with respect to BTC). Binance offers various technical indicators like MACD (moving-average-convergence-divergence) if you’re into that. You can also toggle the view to “Depth” if you want to see a visual representation of the order book.
The depth chart is a visual representation of the streaming columns of numbers you see on the right. It is a little friendlier to figure out what’s actually going on here. On the x-axis, you have prices in BTC. On the y-axis, you have volume of NEO that buyers and sellers are willing to trade. The green, on the left side, is the buyers; the red, on the right side, is the sellers. Where they meet is the actively trading price that you see that people commonly use, and the price that you will most likely be able to transact in.
Now on to the streaming columns of numbers. This part is known as the “price ladder”; the red numbers coming from the top are the “sellers” that are willing to sell at that price for that volume (given in both NEO and BTC units), and the green numbers coming up from the bottom are the “buyers” that are willing to buy at that price for that volume. And on the very far right is a continuously updated list of transactions that have recently taken place.
You can see that the most recent trade, at the top of the section, is a “buy” order in green for 16.67 units of NEO at a price of 0.004287 BTC.
4. Buy NEO
Alright now let’s get into the meat of it. Buying NEO is what we came here to do and by God we’re going to do it. You’ll see there’s a Buy section and a Sell section at the bottom right of the screen. The concepts for each are the same but reversed so I’ll only go over buying.
Begin by figuring out what Price (Bid) you want to buy at. You can manually type in or adjust the price, or you can click on any of the numbers above in the price ladder and it will automatically populate.
Once you figure out your price, you can set the amount of NEO you want to buy. Binance offers handy buttons 25%, 50%, 75%, 100% to quickly set the amount you want to purchase based on the price you’ve set.
Note: The above shows the Limit price that you are willing to buy at. If you want to simplify things, you can tab over to Market which will let Binance select the best (lowest) price that you can buy at in order to get all of your intended buy amount. Be careful when using this option for coins that do not have much volume — you may end up buying at a much higher price than you would like!
Hit the “100%” option on the “Market” tab and you’ll see the maximum amount of NEO you can buy with your BTC Balance. Now hit that big green “Buy” button. On the immediate left of this you should then see your open orders (and filled orders, if traded).
Et voila! You’ve submitted an order to buy NEO using BTC! Once your trade goes through, you can either leave your NEO on Binance (who will give you monthly snapshots of your GAS accruals!), or you can transfer your NEO to your local wallet. Now just sit back, watch the NEO Gas flow in, and get ready for the moon!
Questions? Feel free to ask in the comments.
5. Useful Links
- NEO Official Website
- NEO Subreddit
- NEO Twitter
- NEO CoinMarketCap statistics
- Binance Exchange
- Binance Reddit
Next up: Guide to setting up your NEO desktop wallet. Stay tuned.
Like this tutorial? Any tips are greatly appreciated!