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How to buy Tezos (XTZ)
A beginner’s guide to buying, selling and trading Tezos (XTZ) in Australia.
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Known as “Tezzies”, XTZ tokens are the native currency of the Tezos blockchain. However, as they can currently only be traded on a small number of exchanges, it’s important to know where to look if you want to get your hands on any XTZ.
If you’re keen to add some Tezos to your portfolio, keep reading for step-by-step instructions on how to buy XTZ.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
Skip ahead: What do you want to know?
Quick guide: How to buy XTZ
- Register for an account with a cryptocurrency exchange like CoinSpot.
- Enable 2-factor authentication.
- Verify your account.
- Click “Deposit AUD”.
- Transfer funds into your account.
- Click “Buy/Sell” at the top of the screen.
- Search for the cryptocurrency you want and click “Buy”.
- Enter the amount you want to buy, or the amount of AUD you want to spend.
- Review the transaction details.
- Click “Buy”.
This is our quick guide to just one way to buy XTZ. Compare some other options in the table below.
Where to buy Tezos
A step-by-step guide to buying Tezos
It’s currently not possible to buy Tezos directly with Australian dollars. If you want to buy any XTZ tokens, you first need to acquire a currency listed in an XTZ trading pair, such as bitcoin (BTC) or Tether (USDT), and then exchange it for XTZ.
For the purposes of this example, we’ll look at how you can buy Tezos with bitcoin.
How to sell Tezos
If you want to sell your Tezos tokens, you can do so by following a fairly similar process to that described in Step 4. The obvious difference is that you need to make sure to type in your transaction details under the “Sell XTZ” heading.
In addition, because Tezos is only listed in a limited range of trading pairs, you may not be able to make a direct exchange for the currency you want.
Which wallets can I use to hold Tezos?
Rather than storing your tokens on exchanges, which are regularly the target of hacking attempts, it’s widely recommended that you transfer any tokens you buy into a private wallet.
There is currently no official Tezos wallet. Unfortunately, there isn’t a great deal of choice when choosing a Tezos wallet either, though an increasing number of products are becoming available. Options you might like to consider include:
- Galleon Tezos Wallet (desktop wallet)
- TezBox Wallet (web and mobile wallet)
- Kukai Wallet (web wallet)
- tezos.blue (mobile wallet)
In addition, software company Obsidian Solutions announced in July 2018 that it had released a Tezos Wallet application for the Ledger Nano S.
For more tips on how to choose a good wallet, check out our cryptocurrency wallets guide.
How Tezos works
Tezos is not only a platform for smart contracts and decentralised applications (dapps), it’s also the world’s first self-evolving blockchain.
In the short history of cryptocurrencies, there have been numerous examples of currencies being forced to fork their network into two different blockchains in order to upgrade. Perhaps the most notable example of this was the DAO hack that saw Ethereum and Ethereum Classic go their separate ways. Forks often divide the community behind a cryptocurrency and can cause significant network disruptions.
Tezos’ unique solution is a process that enables its protocol to be continuously upgraded through on-chain governance. The aim behind this is for the network to constantly evolve and upgrade over time, rather than undergoing radical changes that require a hard fork. All stakeholders can participate in governing the Tezos protocol by voting on proposed changes and upgrades.
Tezos also has its own smart contract programming language, Michelson, and uses a delegated proof-of-stake algorithm to achieve network consensus. Rather than staking, Tezos uses a process known as “baking”. Bakers are required to provide a security deposit to participate in the consensus process, and they validate all transactions and add them to the blockchain.
Tezos controversy
In July 2017, the Tezos team wrapped up a successful Initial Coin Offering (ICO) that raised US$232 million worth of bitcoin and Ethereum, making it one of the world’s largest ever ICOs. It was a promising start for this ambitious blockchain platform, but since then Tezos has been mired in controversy.
The project is headed by husband-and-wife duo Arthur and Kathleen Breitman. In April 2018, the United States’ Financial Industry Regulatory Authority (FINRA) fined Arthur Breitman $20,000 and suspended him from associating with broker-dealers for up to two years after he allegedly began developing and pitching Tezos while still working for Morgan Stanley.
However, the project has also been rocked by a significant legal dispute between the Breitmans and Johann Gevers, the former president of the Swiss-based Tezos Foundation, and a series of lawsuits launched by ICO participants. One class action lawsuit that claims the company violated US securities laws during the ICO is still set to go ahead.
As a result of all this drama, the launch of the Tezos network was significantly delayed. ICO participants didn’t even get access to the tokens they had purchased for almost a year, and once tokens were distributed many holders decided to sell straight away.
Things to consider before you buy XTZ
Cryptocurrencies are complicated and volatile assets, and buying any digital coin or token comes with a high level of risk attached. With this in mind, it’s essential that you research and understand the many factors that can potentially impact the price movements of any cryptocurrency before you buy.
If you’re thinking of buying any XTZ, make sure you consider the following:
- Supply. According to CoinMarketCap, at the time of writing (October 2018) the circulating supply of XTZ was 607,489,041, out of a total supply of 763,306,930.
- Controversy. We’ve given you an abridged version of the scandals that have plagued Tezos above. Before buying any XTZ, make sure you thoroughly research the ins and outs of the lawsuits and apparent internal power struggles that have troubled Tezos and made headlines throughout the crypto world.
- Limited availability. Perhaps because those who participated in the Tezos ICO had to wait so long to receive their tokens, Tezzies can only be traded on a handful of exchanges.
- Use. Tezzies are the Tezos network’s store of value. They’re used to pay transaction fees and power smart contracts, and are also offered as baking rewards.
- Whitepaper. If you want to take a detailed look at the technology behind Tezos and how the platform works, check out the project’s whitepaper. The Tezos position paper is also a useful document for understanding the motivation behind the creation of the platform.
Tezos is a controversial project but one that nonetheless has plenty of unique and interesting features. Make sure you consider all the factors listed above and any other risks before deciding whether or not you should buy XTZ.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
Disclosure: At the time of writing the author holds ADA, ICX, IOTA, POWR and XLM.
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