How Do I Buy Ethereum?

How Do I Buy Ethereum?

You’ve done your research, you feel confident about Ethereum and now you want to buy it. Except, you don’t know how. Well, you’ve come to the right place. Below, we’ll walk you through the steps on how to buy Ethereum and introduce you to some of the places where Ethereum is bought and sold.

How Do You Buy Ethereum?

We’ve outlined 5 easy steps below to help you along in your journey of buying Ethereum.

Step 1: Find an Exchange and Create an Account

An online exchange is the only way to buy and sell Ethereum, as is the case with all cryptocurrencies. So the first thing you’ll need to do is a bit of research into online exchanges and choose the one which is right for your needs. For example, not all exchanges work in all countries, or they may have certain restrictions imposed on them based on where you live. So do your homework first and when you settle on the exchange for you, go ahead and create your account with it. 

A good starting point is to look at the most popular exchanges: Coinbase, Bitstamp, Kraken, and Gemini are all good starting points. 

Step 2: Set Up Your Account

Most exchanges require that you upload a number of personal documents for verification purposes in order to fully set up your account (and if an exchange does not require this, it may not be a trustworthy exchange). For example, you may need to upload your passport or driver’s license. The reason for this is that exchanges want to be sure you are who you say you are and that you are reputable. Exchanges need to complete “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks on each person that registers for them; for this they will need both proof of address and photo identification from you.

Verification of your account may take up to several days. How long depends largely on how busy the exchange is.

Step 3: Deposit Fiat Currency into Your Account

Fiat currency is a currency that is considered legal tender by a government, which takes its value from supply and demand rather than the value of the material the money is made of. Most world currencies, such as the US dollar, are fiat currencies.

That means you need actual money in order to start buying Ethereum (as opposed to, say, trying to buy it with gold), which generally isn’t going to be a problem for most people.

Once your account has been set up and verified, you’ll need to deposit fiat currency into your account in order to purchase the ether. This can be done either through a direct bank or wire transfer or through credit or debit payments. Some exchanges may specify that you transfer money into your account in a certain way.

Transferring money into your account may take several days, again this depends on the exchange. Also be aware that most exchanges charge a fee each time you transfer money in. You can find the details of an exchange’s fees located in the footer of its website.

Step 4: Buy Some Ethereum

Once you have money deposited into your account, you’ll be able to start buying Ethereum (or other cryptocurrencies) on the exchange. Each exchange works a little differently, but generally, you can expect to confirm your transactions, wait for them to go through, and then see the ether you’ve purchased show up in your account. Again, processing times will all differ from exchange to exchange, and will also depend on how many transactions you’ve requested.

Most exchanges will limit the amount of cryptocurrency you can purchase at any given time.

Step 5: Withdraw Your Ethereum into a Wallet

This is one extra step that most users will probably want to take, to better secure their purchases. Withdrawing your Ethereum, or any other purchases you’ve made on an exchange, into an online wallet helps to protect your tokens from being stolen if the exchange is hacked, which can and does happen. A wallet is a place where you can store tokens privately; only you can see them and only you can access them (except in extreme cases when the wallet is compromised).

You’ll have to download and install a wallet with Ethereum capabilities in order to store your purchased ether and create an account for this as well.

Once that’s done, you’ll be able to put your wallet account address into the exchange so that you can transfer your ether securely into your wallet.

Generally speaking, if you’ve only purchased a small amount of Ethereum, it’s probably better to just keep it in the exchange, so you don’t have to pay a transaction fee to transfer it out (which may end up being more than the small amount of ether is worth). However, for larger purchases, you’d be better off securing it in your wallet.

To sell your Ether, you will have to transfer it back to the exchange from your wallet.

>>Ethereum Smart Contracts: What Are They & How Do They Work?

What should I be aware of when buying Ethereum?

Buying Ethereum is simple once you’ve followed the steps listed above. However, there are a few important things to note when considering purchasing it.

All Ethereum transactions are final and non-exchangeable. That means, once you buy it, you can only get rid of it again by selling it in a second, separate transaction.

Sometimes, Ethereum transactions will be invalid, such as when a user doesn’t have enough funds to complete the transaction. In these cases, the transaction will not be completed and will therefore not be included in the Ethereum blockchain.

On the reverse side of this, all completed (valid) transactions will be stored on the Ethereum blockchain, and they will live there permanently.

Where can I buy Ethereum?

As mentioned above, there are several exchanges where Ethereum can be bought (and sold). Although most exchanges work approximately the same as far as the steps go, not all exchanges do the same thing, and not all exchanges work at full capability in all countries.

First and foremost, you want to ensure that you are signing up for an exchange that accepts Ethereum transactions. There are exchanges that allow you to sell Ether, which is what you want to use, but there are also platforms that only allow you to speculate on the price of Ethereum. These you’ll want to avoid, assuming you actually want to buy Ether. An example of one of these is eToro. You won’t have access to your coins on eToro, nor will you be able to send any coins to anybody else.

Next, you’ll want to make sure the exchange will work properly in your country.

Below is a list of some of the most popular Ethereum-equipped exchanges.

Coinbase

Coinbase is one of the simplest exchanges to use, however it is not available in all countries, and in some countries, Coinbase doesn’t allow you to trade Ethereum. Check what you can do on Coinbase first before getting an account.

Coinbase allows you do use either a credit card or pay directly from your bank account. Once you’ve set up your payment method, you can click “Buy/Sell”, select the amount you want, then click “Buy Ethereum” (or “Sell Ethereum”).

Coinbase charges a 1.49-3.99% fee per transaction, with credit cards at a higher fee than wire transfers.

Coinmama

Coinmama sells Ethereum worldwide. You can buy Ethereum with your credit card, and the exchange rates aren’t too bad.

CEX.io

CEX.io is another exchange that allows you to buy Ethereum with your credit card. Fees are included in the exchange rate, which is why they are higher than most other exchanges. CEX.io also works around the world.

The steps for buying Ethereum from CEX.io are similar to those from Coinbase.

Coinhouse

Coinhouse only works for countries listed with the EU. You can buy Ethereum with your credit card, debit card, or with Neosurf.

 

So there you have it!; the basics to start you on your Ethereum journey. Happy Buying!

Featured Image: twitter

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