How to buy Ethereum plus all you need to know
All of a sudden, Ethereum is fast becoming a household name in the crypto-currency circle of influence (If it is not one already).
To better understand why this is so, we need to sit back, strap ourselves on our time travel machine and enjoy the ride.
This trip is going to be a very long one (but very exciting as well), as we are about to take ourselves back to when Ethereum was just a young lad in the hood.
As a way of refreshing our memory, the first cryptocurrency which is Bitcoin was started in January of 2009.
Then this was a totally insane idea – starting a digital currency.
Although, it was after October 12, 2009 that the first successful exchange happened between Bitcoin and a fiat currency.
Ever since then, everyone’s attention has been on the crypto-currency. However, not until more recently when a new digital currency was born – ETHER
What is Ethereum?
There are so many definitions of Ethereum, each slightly different from the other.
According to Wikipedia, Ethereum is an open-source, public, blockchain based distributed computing platform featuring smart contract (scripting) functionality.
The Ethereum Project itself defines Ether as a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship or third-party interference.
Each of these definitions try to simplify the concept of Ether and how it works.
That being said, there are still some of us who may not really understand what Ether is all about.
For those category of people, I will attempt to explain what Ethereum really is, and how it works.
First of all, let us handle the real question that brought us here in the first place – how to buy ethereum…
How to buy Ethereum online instantly
Note that Ethereum (ETH) should not be confused with Ethereum Classic (ETC).
Ethereum classic is a derivative of ethereum itself. That is, it is a break out version of ethereum.
This breakout occurred due to a hack incident that happened with Ethereum, which saw about $60m worth of Ethereum stolen from an exchange.
The aftermath of the theft event was a divided community, with one part clamouring for an alteration of the ETH code, in order for the stolen coins to be returned.
While the other party (supporters of ETC) insisted that “code is law”, therefore anything that has happened should be taken as it is.
This led to a split, with ETH forking their own code and creating a new currency called ETHEREUM. This means that ETHEREUM CLASSIC was the original Ethereum code.
However, ETH happens to be more popular than ETC today, with a much higher price as well.
Before setting out to buy ether, there are some things that needs to be handy.
Get a wallet
This is the first requirement you need to fulfill as a prospective ether owner. The reason you need a wallet is that at the point of purchase you would need a place to store your ethereum.
Unless you are buying ethereum from a broker which lets you trade/speculate on the currency, you definitely need a secure place to store your coin.
There are different types of Ethereum wallets, which are listed below:
- Online wallets – These are the kind of wallets that are offered by most exchanges. They exist online and can be accessed from anywhere you have internet connection.
- Desktop wallets – Just as the name suggests, these type of wallets are only accessible from your desktop. They are usually downloaded and installed on your computer.
- Hardware wallets – These type of wallets are the most secure wallets. They are usually physical in nature, with your private keys encrypted into them. They let you keep your crypto-currency in cold storage and away from hackers.
- Paper wallets – They are usually in paper form and allows you store your private keys in them. This option is a risky one, since losing the paper means you’ve lost complete access to your investment as well. Moreover, they can be easily destroyed.
Have your documents handy
Most exchanges will require you to submit one or more document as part of their KYC protocol. One of such documents is usually a valid I.D.
Decide on a deposit method
Different exchanges offer different method of depositing funds for the purchase of ether.
While some will only require you to make purchase through a credit/debit card, others might only support PayPal, while a few through the exchange of other altcoins.
Once your mind is made on the deposit method you are willing to use in buying your ether, you can now proceed to choose the exchange that meets your needs.
How to Buy Ethereum from an Exchange
For now, the most popular and easiest way of buying Ethereum is through an online exchange.
Online exchanges provides a convenient and safe way to either buy and store ether or buy and spend the currency.
I will be listing some exchanges where you can buy Ethereum. Some of the exchanges also provide a wallet system in case you would want to store your crypto-currency.
As with all secure platform, before you can buy ethereum from most exchanges, you need to create an account with them.
List of Exchanges where you can buy Ethereum/Ether instantly
I will start this list with the exchanges that offers the highest number of deposit methods for the purchase of Ethereum.
They are one of Europe’s largest and most popular exchange. Formally known as coinimal and founded in 2014, bitpanda offers slightly higher exchange rates.
Users have a very wide range of options to choose from when buying ethereum from bitpanda. The payment methods offered here includes:
SOFORT-Transfer, Credit/debit cards, Wire transfer, Bank transfer, Euro Wallet, Skrill, NETELLER and a host of others.
Though established in September 2017, this is new market place that offers peer-to-peer trading of ethereum.
This is an anonymous market place, therefore great care has to be taken while dealing here.
Deposit methods accepted here includes:
Bank transfer, Paypal, International Wire, Alipay, WeChat Pay, Cash Deposit
Another platform from which you can buy Ethereum is coinbase. They are one of the oldest and secure platforms through which any one can buy crypto-currency.
Users on this site need to create an account and submit some documents for identification and verification before they can start buying ethereum.
Coinbase supports a limited number of countries, so you need to check if your country is supported.
Their supported payment method includes:
Credit/debit cards, Wire transfer
Coinmama is an ether exchange that lets users buy ether with their credit or debit cards.
Users can send their ethereum to any wallet of their choice after purchase. Depending on your country of residence, all of coinmama’s features may not be accessible to you.
There is a verification process in place which requires users to submit personal documents for identification, in order to have higher purchase limits.
Coinmama currently only accepts Credit/debit cards
They act as an intermediary to those who wants to either buy or sell ether. They do not on their own sell the crypto-currency.
It is more like a peer-to-peer market place for those who wants to trade on ethereum. For users to start using Bitstamp, they need to create an account.
Thereafter, the desired currency is deposited. An order is placed either for a buy or sell.
Once there is a match, both users can securely trade successfully, with bitstamp acting as an intermediary.
Facts about Ethereum
In 2013, the idea of Ether was conceived in the mind of Vitalik Buretin. He is a programmer, who first described ethereum on paper.
Simply put, Ethereum is a decentralized platform that runs smart contracts.
The platform was developed by Ethereum Foundation, a Swiss non-profit, with some great advice from experts around the world.
Ethereum operates a blockchain technology whereby all applications run exactly as they have been programmed.
This is unique about Ether because these applications run without fraud, third-party interference or even downtime.
Terms related to Ethereum
- Decentralized Application – It is a platform or service that operates without a third-party. Ethereum application allows for direct interaction between end users and resources without a middle man.
- Ether – This is Ethereum network’s medium of exchange. It is also regarded as Ethereum’s value-token.
- Smart Contract – It is a computer program that execute the terms of a contract when certain conditions are fulfilled.
- Miners – They are nodes in the Ethereum network that receives, propagates, verifies, and executes transactions. They make sure the process is transparent.
- Ethereum Wallet – A wallet is usually used to connect to the blockchain network. Mostly, users create accounts and performs transactions through those accounts.
- Ethereum Account – Ethereum accounts are composed of blockchain public address with 40 hex characters and a private key.
- Ethereum Client – when you run the Ethereum software on a computer, you create a Blockchain. The blockchain is accessed by connecting through a client software.
- DAO – Decentralized Autonomous Organization, is a set of smart contracts on the blockchain whose work is to automate the workings of an organization.
Benefits/uses of Ethereum
- Developers can create markets, store records of debts, transfer funds in line with instructions laid down a long time ago, without a middleman or counter party risk.
- It allows you to hold and store ether securely, plus other crypto-assets built on Ethereum.
- Programmers can build their own digital token that can be used as a currency, a representation of an asset, a virtual share, a proof of membership or anything at all.
- It also has the capacity to let you create you own escrow system, especially for the purpose of crowd funding or pre-sale.
- You can build an organization where members vote on issues in a transparent and uninterrupted manner.
There are several ways through which you can acquire Ethereum. One of such is through mining and the other is by buying the crypto-currency.
All over the internet, you will find great resources that teaches how to mine ether, one of such greatly written articles is highlighted here.
Is Ethereum mining profitable?
I should state at this point that mining ethereum is still a profitable venture at this juncture.
However, since they are considering switching to a proof-of-stake framework, mining the crypto might end up being no longer relevant.
This, in the long run could see ether appreciate in price, significantly in the nearest future.
If you are still eager to mine ethereum, you can follow this step by step procedure.
How to buy ethereum with paypal
Paypal is one of the most popular payment processors in the world at the moment, processing over $300b annually.
Some folks prefer to stick to their traditional payment method (paypal) when making any form of purchase online, including ether.
With it’s ever-growing popularity, more and more exchangers are beginning to accept paypal payments for ether.
Is Ethereum a good investment?
Is it safe to invest in ethereum now?
Th is one question a lot of people are willing to pay a million bucks for, in order to get a clear-cut answer.Spoiler alert! Well, read on… 🙂
Just as bitcoin raised a lot of dust and debate, with regards to its profitability potential, that is the exact state ethereum has found itself.
Some investors might be of the opinion that ethereum is just on some hot hair balloon ride, while others feel ethereum has come to dominate.
The ultimate answer will come from your own analysis, since they say history/experience is a good teacher.
Well, from my own experience, I am strongly of the opinion that ethereum has come to dominate.
Ethereum is not just a digital currency, it is to technology what water is to Man. Also, since the amount of ether that can be mined is highly limited (without a fork), the demand will eventually surpass supply.
Ethereum has a host of use, some of which are not even known presently. This should tell you that the demand for this digital currency will continue to soar.