How to Buy Ethereum (ETH) , Complete Guide for Beginners
In early 2017, Ethereum was valued at just $8. By the end of that year, it had surged to over $1,000, sparking widespread interest in cryptocurrency. Whether you’re familiar with digital currencies or just starting, this guide is the perfect place to begin. We’ll explore the best platforms for buying Ether and help you choose a safe and reliable option.
Cryptocurrency can be complex and is constantly evolving. But don’t worry; our comprehensive “how to buy Ethereum” guide simplifies the process. Before we dive into buying Ethereum, let’s start with a quick overview of what Ethereum is and how it works. Ethereum is more than just digital currency—it’s transforming how businesses operate globally.
Important Reminder: Only use secure cryptocurrency exchanges for buying and selling crypto or investing in Ether. Look>> How to Buy Bitcoin (BTC) , Complete Guide for Beginners?
What is Ethereum?
The answer to “what is Ethereum” lies in its revolutionary technology, known as blockchain. For a detailed look, check out our “Blockchain Explained” guide. However, here’s a quick overview if you’re short on time.
In simple terms, blockchain is a shared global database managed by numerous computers, called nodes. These nodes work collaboratively, verifying information through cryptography (secure coding). This structure is known as decentralization, meaning there is no central authority; instead, the network is powered by multiple nodes worldwide.
If you’ve ever encountered a website downtime, it’s likely because the servers were centrally located. With blockchain, this problem is avoided. There’s no downtime, as different nodes keep the network running simultaneously across the globe. This decentralized structure ensures data is accessible everywhere rather than depending on a single point, enhancing both security and resilience.
How to Buy Ethereum: Understanding Ethereum and Blockchain Technology
The answer lies in the technology behind Ethereum—a decentralized platform powered by blockchain technology. For an in-depth understanding, we recommend reading our “Blockchain Explained” guide. Here’s a quick overview if you’re short on time.
In simple terms, blockchain is a global database shared and managed by multiple computers, known as nodes. These nodes work together to transfer and verify information using cryptography (secure coding). Since the database is distributed across many nodes, it remains operational even if one node fails, creating a decentralized structure. This means it’s not controlled by any single entity but operates through multiple, independent points.
For example, if you experience downtime on a website, it’s likely because the server is centralized. However, with blockchain, there’s no downtime! Its decentralized structure ensures that data is available worldwide rather than being restricted to a single location.
How Does Ethereum Use Blockchain Technology?
Following the success of Bitcoin (the first application of blockchain technology), Ethereum launched in 2015, bringing an enhanced version known as “Blockchain 2.0.” Unlike Bitcoin, Ethereum improved blockchain capabilities by introducing smart contracts.
Smart contracts act like unbreakable agreements: once executed, they cannot be altered, providing a safer way to conduct business.
How Do Smart Contracts Work?
Imagine your employer, eager to embrace new technology, decides to pay you in Ether. They create a smart contract on the Ethereum blockchain to automatically pay you in Ether on the 15th of each month. Smart contracts enable automated transactions without human intervention.
Here’s another example: let’s say you’ve learned how to buy Ethereum, invested successfully, and are ready to purchase a car. With a smart contract, you send the required amount of Ether to the contract, which then automatically transfers car ownership to you. This transaction is confirmed by nodes globally and added to the blockchain, making it highly secure.
What Makes Smart Contracts Revolutionary?
Smart contracts eliminate the need for third parties in numerous transactions. In traditional setups, you’d typically rely on a third party.
- For employers: Without smart contracts, employees depend on banks to process payroll. With a smart contract, no bank is required; the contract prompts the blockchain to handle payment on payday.
- For car purchases: Normally, car sales involve dealerships and brokers. Smart contracts let you bypass both, reducing fees and delays.
Additional Benefits: For international workers, banks often impose fees and delay payments. With smart contracts, payments are nearly instant, and no third-party fees apply—another major advantage!
This innovative technology positions Ethereum and smart contracts as transformative tools in finance and business, creating efficient, decentralized solutions for the future.
The Fuel That Powers Ethereum: Ether (ETH)
Now that you understand Ethereum and smart contracts, you may be wondering what powers the entire system. The Ethereum blockchain runs on a network of nodes—but who pays for the electricity they consume?
Enter Ether (ETH), the currency of Ethereum, often referred to as “gas”. In the Ethereum network, transactions are known as gas, and the nodes are compensated in Ether for their work. This covers their electricity costs and allows them to make a profit—a process known as mining.
Due to the high demand for Ether, it’s a highly liquid asset. So once you learn how to buy Ethereum, you can easily convert it to other currencies (like USD, EUR, JPY). The rising demand has contributed to Ether’s price increase, drawing millions of investors worldwide.
If you’re still wondering why to buy Ethereum, let’s dive into the reasons.
Why Should I Buy Ethereum?
If you’re asking, “Should I buy Ethereum?” also consider, “Why shouldn’t I buy Ethereum?” As the second most popular cryptocurrency globally, there are many reasons to invest.
Our world operates on centralized systems—exchange rates, interest rates, and taxes are controlled by banks and governments. Ethereum and smart contracts offer a decentralized alternative, often viewed as the future of finance and business. Many investors and companies are eager to be part of this change.
Since Ethereum’s launch, its price has surged significantly. For instance:
- On January 1, 2017, 1 Ether was priced at $8.24.
- By January 1, 2018, the price had risen to $747.52—an increase of over 9000%!
While Ether wasn’t the first cryptocurrency, it addressed issues with its predecessor. For example, Bitcoin transactions take over ten minutes, whereas Ethereum transactions are completed in just seconds.
Ethereum’s potential lies in its ability to remove third parties from transactions, transforming industries. Though its price can be volatile in the short term, many predict Ethereum will gain value over the long term.
How to Buy Ethereum Easily in Three Steps
Now that you know what Ethereum is and why you should buy it, let’s explore how to buy Ethereum in just three easy steps!
Step 1: Own a Digital Wallet
Since Ether is a digital currency, you’ll need a digital wallet to store it. Similar to a physical wallet that holds different currencies, a digital wallet can store various cryptocurrencies. For Ethereum, ensure your wallet is Ethereum-compatible.
You can choose between web-based wallets (accessed via browser), software wallets (downloadable apps), or hardware wallets (physical devices similar to USB drives that connect to your computer).
Web-Based Wallets
Web-based wallets are convenient but offer the least security, so avoid using them for large amounts. Recommended options include MyEtherWallet, Mist, and MetaMask. For added security, always bookmark the MyEtherWallet website.
How to Bookmark a Site
If you’re unsure how to bookmark a site, don’t worry! If you’re using Google Chrome, look for the star icon to the right of the address bar. When on the site, click the star to add it as a bookmark below the address bar. Now, instead of searching for “MyEtherWallet” each time, you can access it by simply clicking this bookmark!
Software Wallets
Software wallets are digital wallets you can download onto your computer, tablet, or mobile device. They’re generally more secure than web-based wallets. I recommend Exodus and Jaxx.
Although Exodus doesn’t have a mobile version, its design is user-friendly and very easy to navigate. For a mobile-friendly option, try Jaxx, which offers a fantastic app experience! Additionally, Exodus and Jaxx allow you to exchange cryptocurrencies directly in the app, such as converting Ether to Bitcoin.
Hardware Wallets
For maximum security, consider a hardware wallet. These devices are the safest way to store Ether and other cryptocurrencies.
Hardware wallets are small electronic devices that connect to your computer via USB. Your crypto is stored in a secure online account on the blockchain, accessible only with your hardware wallet. By keeping your device safe, you’re protected against hacking.
I recommend TREZOR and Ledger Nano S as reliable hardware wallets.
When you set up any wallet, you’ll receive an ETH address. When you buy Ethereum, this is where you’ll send it.
Step 2: Buy Ethereum
The open nature of digital currency markets gives you control over how to buy Ethereum and allows you to build your portfolio according to your goals.
Portfolio Tip: For beginners, a “portfolio” refers to the entirety of your investments.
To start, you’ll need to know where to buy Ethereum. You can purchase Ether on many crypto exchanges (online platforms). If you already have other cryptocurrencies, try ShapeShift to convert them to Ether, or LocalEthereum to purchase Ether through peer-to-peer exchange.
For buying Ethereum with fiat currencies (USD, GBP, EUR, JPY), create an account on one of the exchanges below. Each option allows you to buy Ethereum with credit card or bank transfer.
Coinbase
Coinbase is one of the most popular and user-friendly digital currency exchanges. You can download its app or visit the website.
Payments are accepted via bank transfer on Coinbase, offering a straightforward process for those wondering how to buy Ethereum. However, Coinbase doesn’t operate in every country, so check availability in your region.
Coinbase fees vary from 1.49% to 3.99% depending on the payment method. Debit and credit card fees are generally higher than bank transfer fees.
How to Buy Ethereum on Coinbase:
1.Create a Coinbase Account: Visit the Coinbase website, click “register,” and enter the required information.
2.Verify Your Email: Open your email and look for the confirmation email from Coinbase. Click on the verification link and sign in to confirm your email.
3.Phone Number Verification: Once logged in, you’ll need to verify your phone number. Enter your number and click on “Send Code”. Coinbase will send an SMS with a code—enter it in the provided box on Coinbase.
4.Choose a Payment Method: After verifying your account, select a payment method. You can choose to pay via debit/credit card or bank transfer.
5.Buy Ether: From the “Buy/Sell” section, select Ether and enter the amount you’d like to purchase. You can pay in USD, GBP, or EUR.
6. Click on “Buy ETH”.
CEX.io
CEX.io is another user-friendly exchange platform. It’s known for its simplicity and serves more countries than Coinbase, making it accessible to a broader range of users.
How to Buy Ethereum on CEX.io:
1.Create a CEX.io Account: Visit the CEX.io homepage and click “Register” at the top right. Enter the required information, or you can choose “Log in with Facebook” to sign up through your Facebook account.
2.Verify Your Email: Enter your email address, then open the confirmation email sent by CEX.io. Click on the verification link to confirm your email address.
3.Enable Two-Factor Authentication: CEX.io will prompt you to enable two-factor authentication for added security on your account.
4.Select Ethereum: On the next page, you’ll see a “Buy BTC” option. Click on “BTC”, and a dropdown menu will appear. From this menu, select “ETH” to buy Ethereum..
5.Choose Your Currency: Next to “Buy ETH”, you’ll see “For USD”. If you wish to use a different fiat currency, click on “USD” and select EUR or GBP from the dropdown menu. Currently, these are the only fiat currencies available to buy Ether on CEX.io—but this may expand in the future.
6. Select/enter the amount of Ethereum you want to buy and click “BUY”.
Coinmama
Launched in 2013, Coinmama is a beginner-friendly exchange. Although it only supports Ethereum and Bitcoin, it offers low fees and accepts debit/credit cards and bank transfers. Note: Coinmama currently only accepts USD and EUR as fiat currencies.
How to Buy Ethereum on Coinmama:
1.Register on Coinmama: Go to the Coinmama homepage, and you’ll see the “Register” form on the right side of the screen. Fill in the required information and press “Register”. Check your email inbox, click on the verification link, and confirm your email address.
2.Log in and Verify Your Account: After registering, log in to your Coinmama account. Once logged in, click on the “Verify Your Account” tab. First, go to “My Account”, then select “Verify My Account” from the left-hand menu. Complete the form with your personal details to complete verification.
3.Submit Your Identification: On the next page, upload clear images of both the front and back of your ID card or passport. Additionally, you’ll need to take a photo of yourself holding a piece of paper with the current date and the word “Coinmama” written on it. Coinmama provides an example to guide you through this step.
4.Upload Your Photos: After taking the required photos, add them to the online form and click “Upload”. You’ll receive a confirmation message once the images have been successfully submitted.
5.Note: For larger Ether purchases, you’ll need to verify your account each time. Initial verification allows purchases up to $10,000. Refer to the screenshot provided for verification requirements for other amounts.
6.Select Ether: Click on “ETHER” in the menu at the top of the Coinmama site.
7.Choose Your Amount: Enter or select the amount of Ether you want to purchase and click “Buy Now”.
8.Select Payment Method: Choose “Credit/debit card via Simplex” as your payment option.
9.Enter Wallet Address: In the box labeled “Please insert your Ethereum wallet address”, enter the address of the wallet you created in Step 1, then click “Complete Payment”.
10.Enter Payment Details: Input your payment information in the fields provided and click “Pay Now”.
11.Receive Your Ether: Your Ether will be sent from Coinmama to your wallet. This transfer typically takes a few seconds, but if the Ethereum network is congested, it may take up to an hour or longer. Ethereum is working to improve transaction speeds to address this issue.
Exchanges where you can buy Ethereum
| Binance | Bybit | Kraken |
|---|---|---|
| Is it reliable? | Is it reliable? | Is it reliable? |
| Yes, known as a leading exchange platform. | Yes, known for very low transaction fees and great functionality. | Yes, known for being safe and reputable. |
| Pros | Pros | Pros |
| – Leading exchange platform – Over 500 cryptocurrencies – Two-factor authentication | – Very low transaction fees – Exceptional functionality – Mobile trading app | – Safe and reliable – Low fees – Accepts multiple fiat currencies |
| Key Features | Key Features | Key Features |
| – Over 500 cryptocurrencies – Strong security – Low withdrawal fees | – Very competitive trading fees – Intuitive mobile app – Up to 100x leverage | – Reputable exchange – Multiple fiat currencies accepted – Relatively low trading fees |
Payment Method
If you prefer paying in GBP, you’ll need to use Coinbase, as other exchanges don’t accept GBP. While Coinmama only accepts EUR and USD, CEX.io accepts RUB, EUR, and USD. For RUB transactions, CEX.io is the only option.
Location
If you live in the U.S., your choices are Coinbase and Coinmama; CEX.io is only available in certain states. For residents of France, Germany, China, Japan, or South Africa (and many other Asian and African countries), Coinbase is not an option, so consider using Coinmama or CEX.io.
Tip: Coinmama operates in almost every country!
Fees
Let’s compare credit/debit card fees across exchanges:
- Coinbase: 3.75%
- CEX.io: 3.5% + $0.25
- Coinmama: 6%
If fees are important to you, avoid Coinmama due to its higher rate.
Ease of Use
Coinbase is the most user-friendly exchange, with a simple website and app (available on iOS and Android). If you purchase Ether through Coinmama, it’s automatically sent to your wallet, so you can skip Step 3 in this guide!
While CEX.io is also user-friendly, it’s not as seamless as the other two options.
That’s it! We hope this guide has helped you start your Ethereum journey. Feel free to ask any questions you may have!
Note: Always consider all risks before investing. Conduct your own research to make informed decisions.
The content published on this site is not intended as financial, investment, trading, or any other type of advice. Metaverseplanet.net does not endorse or recommend the purchase, sale, or storage of any cryptocurrency
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