Ethereum (ETH) has been attracting a lot of attention as one of the most sought-after cryptocurrencies globally. If you’re considering investing in ETH, you’ve come to the right place.
This comprehensive guide will walk you through the steps of buying Ethereum. We’ll show you how to set up a wallet, where to buy ETH, and how to securely store your newly acquired ETH.
Whether you’re a first-time buyer or a seasoned crypto investor, we’ll provide all the information required to kick-start your journey into buying Ethereum.
(Please note: The value of cryptocurrencies can experience significant volatility due to various underlying and technical factors. This article aims to educate and inform, not to provide investment advice.)
What is Ethereum?
Ethereum is a decentralized, open-source blockchain network that allows the creation of smart contracts and decentralized applications (dApps). It was first introduced in 2013 by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine.
The Ethereum ecosystem features its own cryptocurrency, Ether, used to pay for transactions and computational services within the network.
How does Ethereum differ from Bitcoin?
Ethereum differs from Bitcoin in several ways. One of the main differences is its purpose. Bitcoin was created as a digital alternative to traditional currencies, with the main goal of allowing for peer-to-peer transactions without the need for intermediaries.
Ethereum was created as a platform for the creation of decentralized applications and smart contracts, which are self-executing contracts with the terms of the agreement directly written into lines of code.
Another significant difference is the way transactions are processed on the two networks. Bitcoin transactions are processed through a process called mining, which involves solving complex mathematical problems to add new transactions to the blockchain.
Ethereum uses a different consensus mechanism called “proof of stake,” where instead of mining, validators are chosen to create new blocks based on the amount of Ether they hold and are willing to “stake” as collateral.
Additionally, Ethereum has a more flexible programming language. It allows for more complex and varied types of decentralized applications to be built on its network compared to Bitcoin.
Reasons for Buying ETH
There are several reasons why someone might want to buy ETH. One of the main reasons is as an investment. Like other cryptocurrencies, Ethereum has experienced significant price swings in the past, and some believe it could yield robust returns in the future.
Another reason is participation in decentralized finance (DeFi) applications built on the Ethereum network, which allow for decentralized lending, borrowing, and asset trading.
Finally, the Ethereum blockchain has potential use cases, such as supply chain tracking, voting systems, and gaming. Remember to conduct thorough research and make an informed decision before buying and holding Ethereum.
How can you buy Ethereum?
Buying Ethereum is a simple and straightforward process. You can now buy Ethereum with a debit card, credit card, bank transfer, or PayPal.
Here are a few crypto exchanges to consider:
Coinbase is America’s largest cryptocurrency exchange in terms of trading volume as of 2021. It was formed in 2012, and it operates on a remote basis without any official headquarters.
Here’s how to buy Ethereum on Coinbase:
- Visit Coinbase.com.
- Go to the Buy/Sell page.
- Enter the amount of local currency you want to buy.
- Select payment method.
- Review and confirm your order.
- Click ‘Buy.’
On the Coinbase App:
- Tap Menu icon.
- Select ‘Buy.’
- Select local currency.
- Enter the amount of Ethereum to buy.
- Select payment method.
- Review and confirm your order.
- And Tap ‘Buy.’
Binance stands tall as the largest cryptocurrency exchange in the world, surpassing others in terms of Bitcoin and altcoin trading volume. It’s a place where users can trade cryptocurrencies like stocks, and securely store their electronic funds. Binance also has its own cryptocurrency called BNB.
Here’s how to buy Ethereum on Binance:
- Visit Binance.com (or Binance.us if you’re in the US)
- Click the yellow “Get Started” button to create an account.
- Complete a verification process to gain full access to your account (including buying, trading, and withdrawing funds)
- Once completed, click “Deposit” or the “Add Payment Method” Button to deposit funds.
- Deposit funds via ACH, Debit Card, or Wire.
- Confirm your account balance.
- Click “Buy Crypto” and select “Ethereum” in the dropdown menu.
- Place an Ethereum Buy order, and you’re all set!
Operating since 2011, Kraken is one of the oldest and largest cryptocurrency exchanges in the world. And with the growing security concerns over cryptocurrencies, many users turn to Kraken as a source to obtain their tokens. They currently allow purchases of 40 different cryptocurrencies to 176 countries.
Here’s how to buy Ethereum on Kraken:
- Visit Kraken.com
- Create a Kraken account.
- Verify your account (name, birthday, country, phone number)
- Make a deposit via cryptocurrency, Fedwire, SWIFT, Etana Custody, and Silvergate Exchange Network (SEN) — or for International Users, they accept Wire Transfer, Etana Custody, and Silvergate Exchange Network (SEN)
- Wait for processing to complete (1-5 business days.)
- Confirm your account balance.
- Then you’re ready to buy Ethereum!
In 2016, Gemini became the first licensed Ethereum exchange. It’s another large crypto exchange that operates in the United States, Canada, Hong Kong, Singapore, and the United Kingdom.
Here’s how to buy Ethereum on Gemini:
- Visit Gemini.com
- Create a Gemini account.
- Confirm your account.
- Set up two-factor authentication.
- Add your bank details.
- Verify your bank account.
- Place funds in your Gemini account.
- Start trading Ethereum.
Setting up a Wallet
There are several wallet options for storing Ethereum, including:
- Software wallets: Digital wallets that can be downloaded and installed on a computer or mobile device (e.g., MyEtherWallet, MetaMask, and Exodus). Software wallets can be downloaded and installed.
- Hardware wallets: Physical devices similar to USB drives used to store cryptocurrency offline (e.g., Ledger Nano S, Trezor). Hardware wallets require purchase and setup per manufacturer instructions.
- Paper wallets: Printouts of a person’s public and private keys for offline storage. Paper wallets can be generated on a website and printed.
- Online wallets: Web-based wallets accessible through a browser (e.g., Coinbase wallet, Blockchain.com wallet). Online wallets can be created by following the provider’s instructions.
When choosing a wallet, consider factors such as security, ease of use, compatibility with other platforms, and support for Ethereum and ERC-20 tokens (not all wallets support these).
Regardless of the type, be sure to write down and securely store the recovery seed phrase, as it is necessary to restore the wallet in case of loss or theft.
The Future of Ethereum
Ethereum’s future and the fate of the cryptocurrency market remains shrouded in ambiguity. Despite this, a considerable number of specialists are optimistic that Ethereum’s success will be propelled by the booming decentralized finance sector (DeFi) and the growing fascination with smart contracts.
Furthermore, the expanding investment from institutions in the crypto world is expected to foster wider acknowledgement and usage of Ethereum in mainstream society.
Still, it’s imperative to bear in mind that cryptocurrency prices can fluctuate wildly, and historical performance is not a guarantee of future outcomes. It’s crucial to thoroughly examine the market and make an informed decision when considering purchasing or holding Ethereum.
Buying Ethereum (ETH) is a three-step process that involves setting up a secure wallet, finding a suitable trading platform, and making a purchase. The pivotal aspect is to pick a wallet that is secure, user-friendly, and compatible with Ethereum and other ERC-20 tokens.
After establishing your wallet, you can buy ETH from various sources like crypto exchanges, P2P marketplaces, or ATMs. It’s crucial to transfer your ETH from the trading platform to your personal wallet for safekeeping after making a purchase.
To safeguard your investment, exercise caution when buying ETH. This involves keeping your private keys and recovery seed phrase confidential, and avoiding sharing your personal information with anyone. It also means not leaving your crypto assets on an exchange for extended periods.
Additionally, ensure your computer and mobile device are secure with the latest anti-virus software and a robust password.
(Disclaimer: Cryptocurrency investment is not “risk-free” and prices can be volatile. This is not intended to be investment advice.)