How To Buy Ethereum, A Beginner’s Guide
When the pandemic hit and people found themselves at home with nothing to do, one of the first things on people’s minds was investing. After crashing due to the uncertainty of the pandemic, the stock market began booming with the amount of money people were throwing in and stocks like Tesla made it feel like you were printing money. Bull runs galore.
Towards the end of last year, the surge of the price of Bitcoin got a lot of people interesting in investing in it along with other cryptocurrencies. Unfortunately, that process isn’t as simple as putting some money in an app and buying some coins. There are security measures that need to be taken, like owning a wallet, and many coins cannot be purchased with a fiat currency, i.e., your dollar.
That’s where Ethereum comes in.
What is Ethereum?
Ethereum is essentially a platform for decentralised applications. This means that it gives you the opportunity to run your application on servers around the world as opposed to a server from Amazon or Google. In the world of crypto, Ethereum is considered by many to be as good of a buy as Bitcoin, if not even better.
How Is Ethereum Different To Bitcoin?
Ether, or ETH for short, is the currency of the Ethereum network. It’s similar to Bitcoin in many ways, some of those being that they’re both decentralised, digital currencies on a blockchain. However, the differences are key. Bitcoin, a coin created in 2009, was created to be an alternative to fiat (i.e. government issued) money like the dollar, pound sterling or the euro. Ethereum, a token established in 2015, was made to be a platform for any digital contract to be both permanent and decentralised. What Bitcoin attempts to do for money, Ethereum attempts to do for contracts.
Though you’ll hear them mentioned together a lot, Bitcoin and Ethereum aren’t so much in competition with one another as they complement each other.
How To Buy Ethereum
If you’d like to take the plunge and purchase some ETH, there are a few ways you can go about doing it. With the instructions we’ll take you through today, we’ll go with the combination of the best, cheapest, and most safe route.
Step 1: Download Brave
If you want to go ahead and purchase ETH and access your digital wallet on a browser like Safari or Chrome, you’re more than welcome to and aren’t likely to run into any problems. But if you want to take every precaution possible, we recommend downloading Brave, a fast, private, and secure browser.
Choosing a Cryptocurrency Exchange
For simplicity's sake, this article will walk you through how to buy Ethereum using Coinbase. However, there are a few platforms on the market available for buying/trading ETH, so let's go over a couple of them before we dive into the process. Some of the most respected platforms in the game right now are Coinbase, Binance, Kraken, Gemini and Bisq.
Coinbase's interface is simple and easy to navigate, making it the most accessible and best choice for beginners in the space. However, it has higher fees than some of the other exchanges due to its convenience.
Binance is a good option for more advanced traders, as it offers lower fees but is a bit less simplistic, so it's a good option for people looking to buy multiple alt coins, not just ETH. Depending who you ask, some people consider Binance the best overall exchange.
Kraken has really amazing customer service, so it's a good option if you'll need some assistance in getting started. They also provide super fast bank withdrawals.
Gemini is one of the only insured wallets available right now, which means that you'll be covered in the case of a security breach or other unforeseen disaster. You can also earn interest on your crypto. This is a good option for the security-conscious investor.
Bisq is the best decentralized option, so its servers are spread around the world, making it more resistant to security breaches than some of the centralized platforms. However, you can only initiate purchases through wire transfer, not with a credit card, so it's a little less accessible.
Step 2: Create an account on an exchange
One of the most daunting steps of purchasing any coin or token is choosing which exchange you do it on. Each one has its own set of vast pros and cons, and that makes making a choice that much harder. As noted above, there are lots of options on the market, like Kraken and Gemini (I personally like ActiveTrader), but for this guide and the purpose of simplicity, we’ll use Coinbase. It’s the most popular option and a great entry point.
Creating an account can seem like a longwinded process. You’ll have to take a picture of some ID, wait for it to get approved, and then wait for your funds to be transferred over from your bank account. This can take anything from a few minutes to a few hours, but it’s worth waiting for.
Step 3: Install a digital wallet
Unlike purchasing a share of a company on a brokerage, any coins or tokens you purchase will have to be stored in a wallet, and ETH is no different. There are two kinds, hardware wallets, and digital wallets. The former is a physical wallet that you can keep and the latter, as the name implies, remains online.
We recommend MetaMask because as well as being a secure and reliable option when it comes to digital wallets, it’s also completely free.
The most important thing to emphasize here is that you take your seed phrase seriously, which means store it somewhere safe. A seed phrase is a string of 12 random words that act as your skeleton key for your wallet. If someone has access to your phrase, they have access to your ETH.
Step 4: Purchase ETH and send it to your wallet
Now that everything is set up and in order, it’s time to actually go through and purchase ETH. Don’t stress the amount too much. Even though, at the time of writing, one Ethereum token is roughly $1910.555 per (ETH / USD), you can put in as much or as little money as you like.
Last but not least, after making your purchase, you’ll need to send your ETH to your MetaMask. When you click the MetaMask extension in your browser of choice, you’ll see that underneath where it says Account 1, there are a series of numbers and letters that you have the option of when you hover your cursor over copying to your clipboard. Go ahead and do that and under Send on Coinbase, paste it in the Address section. Once you go through with that, you should see your ETH appear in your wallet in no more than a few minutes.
How much does it cost to buy 1 Ethereum?
The current price of 1 Ethereum is $1910.555 per (ETH / USD) as of June 9, 2022. Ethereum is 60.94% below the all time high of $4891.70. Keep in mind that the price of Ethereum is constantly fluctuating depending on market conditions. You can choose to buy however much you want and if you hold, your total amount will change. For example, if you bought $1,000 USD in Ethereum on March 13, 2020, it would be worth about $14,700 today.
Congratulations, you just purchased Ethereum. From here you can either hold or use it to purchase an altcoin that you couldn’t buy with USD.
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