In this guide, we are going to examine the different ways people can buy Ethereum. First of all, Ethereum is a blockchain platform that is secured by a distributed network of machines, each processing and validating transactions. Ether is the currency of the blockchain (although Ethereum is often used interchangeably to describe the blockchain and currency) and is generated to the machines that carry out this task.
Ether can be traded for fiat currencies, or it can be held as a speculative asset. The Ethereum network has thousands of participants who can transact with anyone from any part of the world without middlemen.
Open An Ethereum Wallet
Before getting some Ether, you’ll need to have an Ethereum wallet to hold your ether. There are many types of Ethereum wallets.
Below is a breakdown of the most popular ether wallets.
Ethereum Hardware Wallets
Hardware wallets are currently the most secure way of storing your ether. This is a small piece of hardware that you plug into your computer and use to store your private key offline. Hardware wallets are probably an optimal mix between convenience and security. The main hardware wallets for ether include Ledger and Trezor.
Electrum Software Wallets
If you’re starting and you don’t have a lot of ether to store, or you don’t have enough money to purchase a hardware wallet, you can use a free software wallet. These wallets are free, but the downside is that they are less secure since they are always online compared to hardware wallets.
The top Ethereum software wallets include Exodus, Edge, and MyEtherWallet.
Buy Ethereum On A Crypto Exchange
Before choosing a suitable exchange, ensure it operates in your country and accepts your nation’s currency. You’ll be required to submit some personal details during the registration process for security reasons.
For most exchanges, full identity checks come later when filling out for your deposits and withdrawals. To pass these checks, you’ll need to provide your proof of address and a photo of yourself holding your ID or driver’s license. This process is done in compliance with Anti-Money Laundering and Know Your Customer regulations.
After completing all the checks, the next step is choosing a deposit method. Depending on the exchange, there are different methods, including PayPal payment, credit and debit card, and bank wire transfers.
There is a small fee charged for depositing, depending on the deposit method. The details are found in the ‘about’ section or the footer of the website.
Most exchanges accept Euros and Dollars, and major exchanges accept British Sterling Pounds, Chinese Yuan, and Russian Ruble. You’ll need to wait several hours for your funds to appear in the exchange, and this also depends on the exchange and deposit method used.
As soon as you see your funds on the exchange, you can start buying Ether. The user-friendliness of this process depends on a particular exchange, with many having made efforts to make the process as easy as possible.
You’ll be provided with vital information about the coin’s current price, market capitalization, and other relevant news on the exchange.
If you decide to buy Ether from an exchange, you may consider using a wallet provided by the same platform because it will be easier. However, this method is not secure.
Buy Ethereum With Cash
Some may prefer to purchase Ethereum anonymously due to different reasons, such as to avoid going through the KYC and AML checks. Even though regulators may feel uncomfortable with this method in some countries, you can purchase Ethereum from an online peer-to-peer exchange like LocalEthereum.
LocalEthereum is the sister to LocalBitcoins and helps facilitate over-the-counter trading of local currencies. The main difference is that the former is completely decentralized, with escrow services and arbitrage being achieved through smart contracts.
This exchange works like eBay; that is, it is a marketplace where users can offer any local currency in exchange for a certain amount of Ethereum. Once the seller accepts the offer, the exchange of funds is automatic. Money is transferred via different methods and even other major digital currencies such as Bitcoin.
However, this service charges a 0.25% fee, while buyers pay 0.75%, which is significantly lower compared to other centralized exchanges. The transaction may take a few hours to complete, while miners record the amount into the blockchain. As miners receive the fee, the user can speed up the process by choosing a higher fee, giving miners an incentive to process the transaction faster.
Additionally, LocalEthereum enables communication between the seller and buyer, and they can also schedule an eye-to-eye meeting to make the exchange physically. If you prefer this method, ensure you meet the buyer or seller in public and take every precaution necessary since it is a financial transaction, thus risky. You’ll also need to sign off the transaction on the exchange.
Alternatively, you can both arrange to meet at the general crypto-related meet-up. There you can safely trade Ethereum with the stranger, while simultaneously sharing crypto-related knowledge with like-minded crypto enthusiasts.
Currently, trading Ethereum peer-to-peer is the most private and secure method. Moreover, it offers unparalleled flexibility with regards to trading pairs and lack of buying or selling limits. Nonetheless, this method of trading requires trust between both parties, especially when meeting in person.
Purchasing Ethereum On An ATM
You can buy Ethereum through an Ether ATM. This is an ideal method for users, investors, and traders looking to purchase small amounts of Ether. Majority of Ethereum ATMs limit transactions to a relatively small amount so that you don’t have to comply with KYC or AML requirements.
After buying Ether, ensure the coins are visible on your wallet of choice. However, if you are using a software wallet and it gets hacked, you’ll probably lose all your coins.
In this step, send your coins to your Ether address. The address usually contains a long string of characters and numbers that start with ox. You’ll find your Ethereum address from your Ether wallet.
Is It Too Late To Purchase Ethereum?
Ethereum is still trying to penetrate different sectors, and its full potential has not been realized yet. According to one expert, Brian Schuster, the ETH price in 10 years will be $100,000 if it turns out to be “an asset to replace all currency that exists.”
Even though this prediction may be a bit far fetched, if the technology succeeds, then for sure the coin’s price will be much higher than today.
Also, there are several upgrades to the Ethereum blockchain yet to be released. These upgrades will reduce the coin’s supply in the market, and increase the capacity of the network.
However, before you buy Ethereum, ensure you have an Ethereum wallet, then choose the method that suits you best.