How to Buy Ether – Beginner’s Guide
Ethereum is a DIY blockchain platform with smart contract functionality. It’s a platform for developers that was invented by Vitalik Buterin in 2013 to build decentralized apps. The platform has gained immense popularity and so did its currency, Ether. This post will cover the best ways to buy Ether online.
How to Buy Ethereum Summary
- Get an Ethereum wallet
- Find your Ethereum address
- Go to CEX.io and choose the amount of Ether to buy
- Enter your Ethereum address and payment information
The Ethereum coins (i.e. Ether) will be sent to your wallet within a matter of minutes.
If you want a more detailed explanation of the buying process and also a better understanding of Ethereum and its currency, Ether, keep on reading this post. Here’s what I’ll cover:
- What is Ethereum?
- What is Ether
- How Do You Buy Ethereum?
- Fequently Asked Questions
- Ethereum vs. Ethereum Classic
- Short Ethereum mining explanation
1. What is Ethereum?
Ethereum is a technology that lets you send cryptocurrency to anyone for a small fee. It also powers applications that everyone can use and no one can take down.
It’s the world’s programmable blockchain.
Ethereum builds on Bitcoin’s innovation, with some big differences.
Both let you use digital money without payment providers or banks. But Ethereum is programmable, so you can also use it for lots of different digital assets – even Bitcoin!
This also means Ethereum is for more than payments. It’s a marketplace of financial services, games and apps that can’t steal your data or censor you.
2. What is Ether?
Ether is the transactional token that facilitates operations on the Ethereum network. All of the programs and services linked with the Ethereum network require computing power (and that computing power is not free). Ether is a form of payment for network participants to execute their requested operations on the network.
While ether can be thought of as the cryptocurrency of the Ethereum network, metaphorically speaking, it is more accurate to refer to it as the “fuel” of the network. Ether tracks and facilitates all transactions in the network. This process is notably different from the workings of a standard cryptocurrency. Nevertheless, ether does have some properties that make it similar to other cryptocurrencies, such as bitcoin.
3. How Do You Buy Ethereum?
Step 1 – Get an Ethereum Wallet
Before starting the buying process you will need to get an Ethereum wallet to hold your Ether. There are many types of Ethereum wallets. Here is a short breakdown of the most popular Ethereum wallets.
Ethereum Hardware wallets
Hardware wallets are one of the most convenient and safest options out there for storing your cryptocurrency.
A hardware wallet is a type of cryptocurrency wallet where you can store your private keys in a secure physical device. The cryptocurrencies stored in the wallet are kept offline, meaning that they can’t be hacked. However, when needed, the coins stored are readily available. If you are not that well-versed in coding and technical details, the hardware wallet is a great way to store the majority of your cryptos.
Ethereum Software wallets
Software wallets come in many forms, each with its own set of unique characteristics. Most are somehow connected to the internet and are hot in nature. Wallets are distinguished by a set of supported cryptocurrencies and software platforms such as Windows, Mac and other operating systems. Software wallets are available in three forms — desktop, mobile and online:
- Desktop wallets are computer programs that store cryptocurrencies on a PC so that its information is not accessible to anyone but the user, whose private keys are kept only on the desktop.
- Mobile wallets come in the form of a smartphone app and are easily accessible to their users at any time, considering most people don’t leave their homes without their phones. However, it is worth remembering that mobile devices are vulnerable to various malware and can be easily lost.
- Online wallets are web wallets that can be accessed from anywhere and any device, making them more convenient, but the private keys are stored by website owners rather than locally on user devices.
So, the burning question on everyone’s mind is: Which of these software wallets do I choose?
Step 2 – Buy Ethereum with a Credit Card or Wire Transfer
The easiest way to buy Ethereum (i.e. Ether) would be through one of the popular Ethereum exchanges which are listed below.
Buy Ethereum through CEX.io
Buying cryptocurrencies with a credit card has become one of the most popular ways to obtain crypto coins. CEX.io offers its customers a variety of options to buy and sell Ethereum on the platform. After one registers and passes the verification process, buying or selling the funds would be possible using any allowed payment method.
Whether the users would like to buy Ethereum with debit card or any other card type, they may be sure that the funds are secure and the transaction would flow without problems. Here are some points to consider:
- Paying for the crypto coins with your Visa, MasterCard on CEX.io is just like making any other online purchase.
- You just need to enter your card details including name, card number, expiry date, and CVV code, and you are almost done.
- After your card is verified, it will take only several clicks to complete the purchase.
So, to buy ETH, you do NOT need any specific knowledge or skills.
- Open a CEX.io account
- Add your payment method (Credit card or bank account)
- Go to “Buy/Sell” and select Ethereum
- Choose the amount of Ethereum you want to buy
- Click on “buy Ethereum”
Buy Ethereum through eToro
eToro – If you’re only into Ethereum for price speculation and don’t need to hold the actual coins or send them to anyone else, eToro is probably the easiest and cheapest option. The company offers a friendly and intuitive UI to help you buy and sell Ethereum for fiat currency (USD, EUR, etc.).
eToro is less recommended for accessing and using the actual coins, due to their relatively complicated withdrawal process. So, if you’re using eToro for investment only you can skip step 1 of getting an Ethereum wallet, as you won’t be using the coins you’ll buy.
- Step 1: Sign up for eToro
You might find that eToro is a great platform on which to buy Ethereum. If so, signing up is simple and so is depositing funds into your account via a wire transfer or bank deposit.
- Step 2: Account verification
To ensure account security, eToro requires account verification. You’ll be required to upload a valid proof of identity (e.g. passport or driver’s license) and proof of address (e.g. bank/credit card statement, internet bill).
- Step 3: Deposit fiat currency
Once your account is verified you can get started! Follow the instructions to deposit fiat funds into your new eToro account. Having fiat currency in your eToro account is a necessary step to buy ETH.
- Step 4: Make your first Ethereum purchase
Now that your funds are available in your account, you’ll be ready to go! Simply navigate to the Ethereum page and make your first purchase.
*eToro users: 75% of retail CFD accounts lose money. Your capital is at risk. US users – CFDs are not available for US users. US users can only trade (long) real assets without leverage.
Buy Ethereum through Bitpanda
Bitpanda is an Austrian based cryptocurrency exchange that lets you buy and sell more than thirty different cryptocurrencies using Euros, Dollars, British Pounds or Swiss Francs.
Bitpanda operates two platforms. The Bitpanda Global Exchange and the Bitpanda Platform.
Bitpanda Global Exchange is targeted towards more advanced traders, featuring trading charts and the ability to make customized buy/sell orders. Bitpanda Platform on the other hand, is easier to use, offers multiple payment methods (credit card, SOFORT, iDEAL etc.) and is therefore significantly more expensive.
The good news: you can access both platforms with the same account.
- Sign up to Bitpanda
- Verify and deposit funds
- Start buying and selling Ethereum
Buy Ethereum through Binance
Binance is a cryptocurrency exchange that was founded in 2017 (in China) and is based in Malta. It has operations in the U.S. and Singapore. According to CoinMarketCap, Binance is the largest crypto trading platform in the world both in terms of trading volume and weekly site visits.
Binance.US launched in September 2019 and is based in San Francisco.
Binance.com might seem like the place to get started trading on Binance. However, U.S. customers will need to use a different website, which is Binance.US. Unfortunately, the U.S. site has far fewer supported currencies and available features.
While there are over 350 cryptocurrencies available to trade on the global platform, Binance.US currently offers 50+. That’s still more currencies than many other U.S.-based exchanges offer, however.
Buy Ethereum through Coinbase
Coinbase is an online crypto broker based out of San Francisco in the United States Launched back in 2012. It is one of the first cryptocurrency brokers to gain a stronghold in the UK, as well as one of the most popular.
By 2013, the company had become the most funded bitcoin startup and the single largest cryptocurrency exchange in the world.
Coinbase currently boasts over 35 million users from over 100 countries worldwide and has more than $20 billion in assets under management.
- Open a Coinbase account
- Add your payment method (Credit card or bank account)
- Go to “Buy/Sell” and select the amount of Ethereum you desire
- Click “Buy Ethereum”
Step 3 – Withdraw the Ether to your Wallet
Once you bought Ether remember to make sure the coins are sitting in your own personal wallet. If you leave your coins on the exchange and the exchange gets hacked or becomes insolvent you may end up losing your coins.
4. Frequently Asked Questions
How do I Buy Ethereum with Paypal?
One workaround would be to buy Bitcoin with Paypal and then trade it for Ethereum on a cryptocurrency only exchange like Binance. The process will take time, as buying Bitcoin with Paypal isn’t straightforward, and you will pay a transaction fee for each step of the process. Only use this if you’re willing to pay up to 15% or more in fees.
Alternatively you can use LocalCryptos – a marketplace that allows individuals to connect with each other in order to buy and sell Ethereum. The concept is similar to LocalBitcoins. While the variety and flexibility of this marketplace are usually high, the risk is also high. You have to make sure the person you’re dealing with is legit before conducting a trade.
How do I Start Investing in Etheruem?
There are many forms of investing in Ethereum. You can mine, trade, buy and hold or even invest in different sites. However, many of these methods contain great risks.
5.Ethereum (ETH) vs. Ethereum Classic (ETC)
Ethereum Classic (ETC) grew out of an ideological and ethical rift in the Ethereum community that provokes controversy to this day. In 2016, a significant hack was carried out on a third-party application running on the Ethereum (ETH) blockchain, which resulted in the theft of millions of dollars worth of ETH. In response, the Ethereum blockchain underwent a hard fork to essentially reverse the hack from the official ledger — returning the stolen ETH to its original owners.
In contrast, the other branch of this fork kept the official ledger, that included the hack, unchanged — aiming to preserve a 100% immutable ledger. In other words, the two resulting blockchains differed in only one way: one still contained the record of the hack and the stolen ETH, and the other essentially wound back the clock as if the hack never happened. The edited blockchain preserved the Ethereum (ETH) moniker, while the original/unchanged blockchain became known as Ethereum Classic (ETC).
6.Short Ethereum mining explanation
The Ethereum network has its own blockchain. All transactions that are made using Ethereum need to get approved by the miners. That’s why it takes a while before the Ether you send someone reaches them. The transaction has to be verified and put inside the Ethereum blockchain. This verification process is called proof of work. It is your job as a miner to make sure no one cheats.
To make sure that the transactions are valid miners are solving complex mathematical equations. When a miner solves this equation, he communicates this to all of the other miners “Hey, I’ve got it! I have found the number we’ve been looking for all this time” using fancy computer language.
All of the other miners check if this number is correct and if 51% of them agree that it’s correct a new block gets added to the blockchain. This new block contains all of the transactions that are now verified and the miner who found the number is rewarded! The miners then start solving a new math problem to verify another block of transactions.
Three ways to mine Ethereum
Ok, now that we have that out of the way how do you start mining Ethereum? There are three ways you can mine.
- Pool mining (Recommended)
- Mining alone (Not recommended)
- Using Cloud mining services (Not Recommended)
Ethereum is a disruptive technology that is set to change how the Internet works. Whether it succeeds or not remains to be seen, but for now you can easily get your share of “the Internet’s future” by following the steps mentioned above. As Ethereum becomes more popular its currency, Ether, seems to be gaining momentum and appreciating in price. But as always cryptocurrencies are a very risky investment and things can change in a heartbeat (as demonstrated by Ethereum’s colossal price drop during 2018).