Ethereum is the world’s second most popular open-source blockchain after Bitcoin. The network enables users to build DApps (decentralized applications) to use the network for both personal and professional purposes. The network uses Ether to virtually process all transactions.
But what is Ether? How can one buy Ethereum? And what are the best places to purchase it? Our guide will seek to answer these questions and more below.
What is Ether?
Simply put, Ether (ETH) is the transactional token for the Ethereum network. Think of Ethere as the fuel of Ethereum, working to track and facilitate all transactions within the network. DApps run are charged to use the Ethereum network, and Ether must be used for these payments. High resource applications will, obviously, pay more tokens for usage than low resource applications.
Ether differs from Bitcoin in that it does not use the Proof-of-Work (PoW), but instead uses a Proof-of-Stake (PoS) network. Whereas PoW uses miners to solve complex math problems to validate transactions, PoS validators use smart contracts to create new blocks and are rewarded with a transactional fee in ETH. As of 2022, there are currently 120 million ETH in circulation.
How to Buy Ethereum
The most common method for buying ETH is to purchase it on a top crypto exchange. We’ll walk you through the simple process and give you an overview of some of the best exchanges where you can buy ETH.
Step 1: Choose a Crypto Exchange
A crypto exchange is an online platform where you can buy, sell, and trade cryptocurrency. But with so many crypto exchanges out there, it can be difficult to evaluate the difference and choose the best exchange for you. Here’s a list of some of our favorites.
Coinbase
Coinbase is one of the most popular crypto exchanges around where you’ll find most cryptocurrencies you seek. You’ll not only be able to buy and sell ETH, but manage your entire crypto portfolio in one space. The site also offers added security via “vault protection” with time delayed withdrawals. Users can also take assurance in knowing that “all USD cash balances are covered by FDIC insurance, up to a maximum of $250,000.”
Binance
Binance is another popular crypto exchange that tops most lists. Here, you’ll find tons of cryptocurrencies you can buy, sell, and trade and fast transaction times with very low fees. One important aspect to note is that US users on this platform will have more limited options available to them than those using the international version. For this reason, you will probably want to set your VPN location elsewhere.
BitForex
BitForex is one of the top secure trading platforms for crypto supporting over 500+ digital assets. Users can also buy and sale NFTs in the Marketplace. You’ll also be pleasantly surprised with their low transaction fees and high security features, including a reward system for users who flag security flaws.
eToro
eToro gives users a unique feature they call CopyTrader, which gives you the ability to copy other traders portfolios. If you see a trader whose portfolio appears to be doing exceptionally well, you may want to use this feature. eToro supports over 40 cryptocurrencies, including ETH, and offers new users low minimums to start trading.
Gemini
Gemini’s platform has a very user-friendly mobile app and is one of the largest crypto exchanges around. The site also offers one of the best savings account features with interest rates as high as 8% on some cryptocurrencies. Gemini can also boast that they were the world’s first exchange to be both SOC 1 Type 2 and SOC 2 Type 2 compliant.
Step 2: Create and Verify Your Account
Once you have selected your exchange, you will need to set up a new account. To start, you will need to input your name, email address, and create a high security password. You will then be sent a verification email to the address you provided.
The verification process differs at certain exchanges, but you will most likely need to input the following information:
- Birth date
- Resedential address
- Citizenship
- Phone number
- Proof of residency
- Bank Card
Step 3: Make a Deposit and Place Your Order
Once you are verified and have a card on file, you are ready to place your order. To do this, you will either need to deposit fiat money via a credit or debit card or use a different type of cryptocurrency you already have.
After you have decided on your payment method, you’ll go to the exchange’s “Buy/Sell” space via their menu, select the cryptocurrency you wish to purchase (ETH), enter the amount you want to buy, and click “Continue.”
You should immediately see your newly purchased crypto in your exchange account’s wallet.
Step 4: Secure Your Ethereum
Once you have your ETH, you will want to make sure you place it in a secure crypto wallet. It is highly recommended to not leave your ETH in your exchange wallet. Crypto wallets add additional security mesures to keep your crypto safe! Here’s a current list of our top 5 Ethereum wallets.
MyEtherWallet (hot wallet)
MyEtherWallet, or MEW, is a free hot wallet (software wallet) that bills itself as “Ethereum’s original wallet.” Through MEW you can send transactions at any time, without middlemen, minimums, or limits. The wallet also supports additional Ethereum-compatible networks including Ethereum Classic (ETC), Binance Smart Chain (BNB) and Polygon.
MetaMask (hot wallet)
When it comes to digital security as a hot wallet, MetaMask hits a lot of key points. The wallet generates passwords and keys directly on your device, allowing you to choose what to share and what to keep private. MetaMask also serves as a browser to access the Ethereum network where you can directly access DApps. You can download MetaMask via its mobile app or directly to your browser.
Trezor One (cold wallet)
Trezor One is one of the top cold wallets (hardware wallet) available. This wallet uses a limited USB connection, meaning it is only connected to the internet during the limited time you are using it. It is small and extra portable, and is popular due to an increase anonymity by routing through Tor.
Ledger Nano X (cold wallet)
While the Ledger Nano X may be one of the more expensive crypto wallets, can you really put a price on financial security? You’ll be able to access this wallet via your desktop or mobile device via its Bluetooth Low Energy (BLE) connectivity. Its small, yet sleek, design is perfect for managing your crypto while on the go.
Keystone (cold wallet)
Keystone is a hardware wallet that comes in the shape of a 4-Inch touch screen, similar to your smartphone. The device uses what is termed “air-gapped signing” via secured QR codes. The company offers additional safety features, including an anti-tamper self-destruct mechanism, fingerprint sensor, and physical metal tablets to store a printed version of your recovery phrase.
Alternative Ways to Buy Ethereum
While crypto exchanges using fiat money and other cryptocurrencies are generally thought of as the safest and most convenient way to buy ETH, there are other ways go about your purchase.
P2P Exchange
A peer-to-peer (P2P) exchange is an online community where crypto enthusiasts can come together to essentially barter for the crypto they seek. The best use for a P2P is if you had an amount of a popular crypto, such as BTC, and were seeking to exchange it for ETH.
While many P2P users accept electronic payments, like bank transfers, some insist on only in-person transactions (likely to skirt taxation and other regulations). Be very careful using P2P exchanges! There have been incidents of theft, and other unsavory activities. Only meet up in person with someone you trust and in a public space.
Ethereum ATMs
Another way to purchase ETH would include using an an Ethereum ATM. It is important to note that these machines require you giving them quite a bit of personal information and owning a crypto wallet. To use the device you will need to scan the QR code for your wallet via the machine’s camera.
Recently, crypto ATMs have been flagged for a number of security vulnerabilities, including software and hardware weaknesses. Operating systems, the QR codes, cameras, and fingerprint scanners have all been flagged as isufficient by these recent studies. While it’s great to see more options available to crypto investors, it is also important to keep security of your crypto paramount.
Buy Ethereum with PayPal
As of 2022, Paypal now has a full New York BitLicense, allowing users to transfer their acquired crypto through PayPal to external, third-party wallets. For years PayPal has been one of the world’s leading online payments system, and now you can use their user-friendly website to purchase ETH and other top cryptos.
PayPal’s CEO, Dan Schulman, has been quoted as saying that crypto has the ability to “redefine the financial world.” Analysts believe that this step was just another in multiple next steps the company will take as cryptos like ETH continue to grow in popularity and utilization.
Top Tips for Ethereum Investors
FAQ
What is the best way to purchase ETH?
The best way to purchase ETH is by using a trusted crypto exchange. You will need to create an account, verify your identity, and use a debit or credit card to complete your transaction. Popular crypto exchanges include Coinbase, BitForex, and eToro.
Should I invest in Ethereum right now?
Crypto markets are notoriously volatile, but most market analysts are predicting huge gains for ETH over the next 10 years. The smart move would be to get in while the price is still low.
What is the best Ethereum wallet?
The best Ethereum wallet will depend on how much ETH you purchase and what you plan to do with it. Hardware wallets, like the Trezor One, offer more security, but software wallets, like MetaMask, offer more convenience for trading.