Ethereum's native asset, Ether (ETH), is the second-largest cryptocurrency in terms of market capitalisation after Bitcoin. ETH can be bought and traded on a wide range of cryptocurrency exchanges. It is also used by developers to pay for transaction fees and services on the Ethereum network.
Step 1. Choose where to buy Ethereum
A cryptocurrency exchange is a digital platform that allows you to buy, sell and trade cryptocurrency. They are similar to stock trading platforms.
Your first major consideration is to figure out whether you want to buy ETH with another cryptocurrency (like BTC or a stablecoin such as USDT) or use fiat currency like the US dollar or your own country's currency, such as AUD, SGD or EUR.
For this article, we'll assume you don't own any cryptocurrency at present and want to purchase some Ether with your hard-earned USD or local currency. There used to be a big distinction between "fiat-to-crypto" and "crypto-to-crypto" exchanges until a year or two ago as a result of banking regulations in most countries. Now, many originally "crypto-to-crypto" exchanges accept fiat currency as payment or work with integrated service providers to convert your money into the digital asset of your choice, and send it to your exchange account within a few hours.
Cryptocurrency exchanges differ in terms of fees, security, and payment options, so you'll have to do your due diligence before choosing the right one for you. When choosing a cryptocurrency exchange, it's important to look at the fees and withdrawal options. The ideal exchange will have low fees and high-security features. As a beginner, it is best to choose an exchange with an easy user interface that doesn't have too many features, which may overwhelm you.
When deciding where to purchase Ethereum, look for an exchange that lists ETH in one or more currency pairings.
After you have chosen an exchange from the table below, click on the Go to site button and sign up with your name, email address, and a password.
Note: Many exchanges also require your full name, contact information and proof of ID before allowing you to trade.
You will then need to complete the Know Your Customer/Client (KYC) process, which is a legal Anti-Money Laundering (AML) requirement that requires you to verify your identity and address. To do this, you will need to provide a copy of your identification card, and a copy of a recent bank statement or utility bill that has your address on it. Sometimes you will also need to provide a selfie through the use of guided KYC software where you are holding your identification card.
Usually, KYC takes a few days, after which time your account will be verified and be ready for you to start using it.
After your account is approved, you will need to choose a payment method to deposit funds into your account before you can make any purchases.
Step 3. Deposit funds into your account
To buy ETH, you'll first need to deposit USD or another supported fiat currency into your exchange fiat currency account or link your credit card to the account.
If your exchange supports Ether (ETH) you'll be able to buy ETH directly with your bank card, depending on local regulations. Some exchanges charge varying fees depending on the amount of ETH you're buying, so pay attention to the cost of your transaction.
Note: Some payment methods have higher fees, with credit card payments usually being the most expensive.
Depositing funds. A cheap way to buy ETH is via bank transfer. You'll have to deposit the money from your bank account to the exchange account and use it to purchase ETH. However, although this may be the cheapest option, you may have to wait a couple of days for the funds to clear in your exchange account. Once the funds have cleared, you can purchase ETH with these funds.Linking a card. Linking a credit or debit card to your exchange account can be a convenient way to purchase cryptocurrency. But, as mentioned above, this is usually a more costly option. Card payments are also usually done instantaneously so you won't be able to deposit funds to use on the spot market.
In general, it's best to avoid using a credit card to purchase cryptocurrency as you will have to pay interest on top of the exchange's fees. Additionally, some credit card providers don't allow you to purchase cryptocurrency at all.
Step 4. Buy Ethereum
Navigate to the markets section on your chosen exchange to find your desired ETH pairing. Look for the section on buying ETH, and type in the amount of the paired cryptocurrency you want to spend or the amount of ETH you want to buy.
Note: Carefully review your transaction details, including the amount of ETH you're buying and the total cost of the purchase, before completing the transaction.
Be aware that you don't have to purchase a whole Ether, most exchanges will allow you to purchase a portion of one. Some cryptocurrency exchanges only offer one way to purchase cryptocurrency while others give you a few options. The most popular methods of purchasing cryptocurrency in the US are instant buy and the spot market.
Most exchanges offer the ability to buy cryptocurrencies like BTC and ETH instantly, and this is certainly one of the fastest ways to purchase ETH. Simply enter the amount you would like to purchase in your local currency and the exchange will calculate the equivalent amount of ETH, according to the market rate.
Buying ETH via the instant buy method is generally more expensive than on the spot market as there is usually an extra exchange fee added on top of the market price. This can be a simple way to purchase cryptocurrency for beginners but it's important to be aware of the extra costs involved, especially if you are using this method with a linked credit card.
Step 5. Withdraw ETH to wallet
While some people choose to store their cryptocurrency tokens in their exchange account, this is not recommended. As exchanges are regular targets for hackers and thieves, it's generally considered a much safer option to move your ETH tokens into a wallet which allows you to retain full control of your private keys.
Happily, there are heaps of choices available when searching for an Ethereum wallet. Options you might like to consider include:
Cryptocurrencies are complicated and volatile assets, and buying any digital coin or token comes with a high level of risk attached. Before you buy, make sure you do plenty of research and that you recognize the factors that could potentially drive the price of a cryptocurrency asset either up or down.
If you're thinking of buying Ether, consider the following factors first:
Move to proof-of-stake. Though it started life as a proof-of-work cryptocurrency, Ethereum will soon be shifting to a proof-of-stake system as part of the Casper update. Designed to improve scalability and tackle centralisation, Casper's success (or otherwise) will have a big impact on the future of Ethereum.
Market leader. As it stands, Ethereum has the biggest profile of all the dapps platforms currently in existence. Thanks to its early-mover advantage, Ether is the world's second-largest digital currency in terms of market cap and the Ethereum platform is synonymous with the development of dapps.
Competition. Ethereum is also operating in an increasingly competitive market sector. NEO, Lisk, EOS and Cardano are just some of the dapp platforms that look set to compete with Ethereum in the future.
Enterprise Ethereum Alliance (EEA). The EEA is a non-profit corporation that aims to accelerate the adoption of Ethereum's blockchain technology by businesses. If it can successfully drive increased use of Ethereum, this could potentially lead to increased demand for ETH.
Where to buy Ethereum (ETH) in the UK
Frequently asked questions
The cost of ETH will depend on a few factors, including what payment method you are using to purchase it, whether you are purchasing it with fiat currency or with another cryptocurrency, and what the market rate is that day for ETH.
Although it is difficult to make an accurate prediction of what ETH will be worth in 2030. Since the cryptocurrency's inception in 2015, the smart-contract-enabled blockchain has evolved immensely and its native tokens are projected to be worth roughly $17,000 by the end of 2030.
Bear in mind that this price prediction is not set in stone. It is based on numerous factors that are subject to change at any time. Ethereum has no fixed total coin supply. However, a new upgrade, EIP-1559, will make it a deflationary asset.
Much can change though while Ethereum migrates to a proof-of-stake (PoS) ETH 2.0 network (which makes it likely that more ETH will be locked up for staking purposes) and community upgrades, or Ethereum Improvement Protocols (EIPs), can completely change the market for Ether.
Although Ethereum and Bitcoin are both cryptocurrencies, they differ in many ways. It is important to do your due diligence before deciding on which digital asset to purchase. Here are some helpful resources to learn more about Ethereum and Bitcoin and the differences between them:
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