In this guide, we will try to simplify buying Ethereum for beginners. Exchanging Ethereum for cash or Bitcoin is the fastest, most straightforward way to place those first cryptocoins in your wallet.
Acquiring Ethereum requires a few essentials: a specialized Ethereum wallet, a suitable payment method or some amount of Bitcoin. Registrations or verification are a preliminary step, to ensure easy access to the exchange of your choice If you are not confident about buying Ethereum through Bitcoin, check out our guides (link) on how to buy Bitcoin.
How to Get Ethereum
To ease the process of acquiring Ethereum, users may follow a simple three-step plan.
- Download and operate an Ethereum wallet.
- Make a registration with an exchange, complete their verification process beforehand, so you are ready for purchase when the price is right.
- Make the purchase itself following the exchange’s instructions and send the Ethereum to your wallet.
Choosing the right wallet should fit the needs of the buyer. Some wallets are perfect for a buy-and-hold strategy, while others offer to move Ethereum with great ease, but may be less secure. A user must think well before committing funds, especially for online wallets related to exchanges or online casinos. It is best not to store significant funds on “hot” wallets connected to the internet.
Mist is the closest thing to an “official” Ethereum wallet. It is an open source project available on GitHub. Other wallets offer additional features such as ease of use or security. The choice of wallets for Ethereum is much wider compared to other cryptocurrencies such as Litecoin, but this also means a greater possibility for security breaks and hacks.
WARNING: Parity multi-sig wallets underwent a hacking on July 19th, 2017. Normal Parity wallets are still considered safe. Users must be aware that not all wallets offer the same security and diversify their holdings of Ethereum.
The security break affects Parity wallets of version 1.5 or higher.
A hacked diverted more than $31 million’s worth of funds from Parity multi-sig wallets or around 153,000 Ethereum.
The official wallet from Ethereum.org offers the safety of a desktop application. This wallet allows users to store Ethereum or other assets built on the Ethereum network.
Other wallets offer varying features that offer multi-currency coverage, ease of use or security features.
Jaxx – a dual-holding wallet allowing a storage of both Ethereum and Bitcoin.
Xeth – allowing an additional layer of anonymity.
Ledger Nano S – a hardware wallet, a go-to solution for other cryptocurrencies as well. Ledger Nano S offers secure offline storage, the possibility of cold storage.
Paper wallets are not that usual for Ethereum, but there are web services available to generate a paper wallet for cold storage. The creation of this wallet still occurs online and does not offer the ultimate safety, but offline generation is also possible.
The paper wallet generation tools include:
MyEtherWallet – online paper wallet generator. The code can be downloaded from GitHub to generate a secure wallet offline.
EthAddress – also offers the possibility to create paper wallet online or on a disconnected machine.
The best advice on how to buy Ethereum is to head to large, well-known online brokers that offer enough transaction volume.
Before buying any cryptocurrencies, it is best to choose an exchange that offers the most secure verification process. Buying cryptocurrencies this way means the buyer is not anonymous. The identity proof steps require phone number verification, linking a bank account or a suitable debit card. The most rigorous identification may require a picture ID scan or live chat with an exchange agent.
Caution: only verify your identity on exchanges for your personal use. Scammers sometimes present themselves as agents of large companies and may demand a user to create an account with an exchange. Never create an account for a third person, always for personal use.
Ethereum is available at:
Kraken – exchanged for fiat (USD, EUR, GBP, JPY)
BTC-E – ETH/USD, ETH/EUR
Poloniex – ETH/BTC
Coinbase – USD/ETH
Make an Order for Ethereum
When you are ready to make an order, go to the Buy page of the exchange you have chosen.
For BitPanda, Ethereum will be stored on the specialized wallet on the site, and can be moved from there:
The price of Ethereum is volatile, with dramatic peaks and fast drops. Buying Ethereum at the right moment is a matter of researching the most convenient exchanges. As with all cryptocurrencies, buying may be much easier than selling, so it is best not to invest funds that you cannot afford to lose.
Ethereum is ranked at the top among cryptocurrencies. Its price is much lower than that of Bitcoin and allows easier entry into the world of cryptocoins.
|Coin||Price (as of July 2017)||24-hour Trading Volume|
|Ethereum||$225.93||$3.09 billion(19.07.2017- unusually high volume)
$1.6 billion (usual)
It is best to proceed with great caution when buying Ethereum, as the price is extremely volatile. The coin market price is sensitive to bad news that trigger panicked selling and led to sharp weekly losses.
How to Sell Ethereum
If Ethereum has reached a price at which an investor is ready to sell, a thought-out plan to achieve the best order price should always be kept in mind.
International online exchanges are usually subject to daily selling restrictions, so it is best to know beforehand the limitations of the exchange. Usually, verification allows a higher daily limit. Keep in mind that while some exchanges may offer a buying option, selling Ethereum directly for cash may not be possible. It is still possible to convert to Bitcoin and then move the funds to fiat. The Shapeshift tool allows an easy exchange between the two currencies.
Go to the Sell page of the exchange. If the online wallet has funds, use the funds to make an order. Otherwise, send funds from another wallet. Choose the exchange option- sell the Ethereum for cash or another cryptocoin.
Why buy Ethereum
Ethereum is attractive to investors mostly for its price growth potential. Since the beginning of 2017, the price growth of Ethereum reached 5000%. Ethereum drew unusually high buying interest and trading volumes around July 19th, when an initial coin offering for the CoinDash project was scheduled. Ethereum is also a doorway to other altcoins.
Ethereum allows easy exchange for new coins built on the Ethereum network. This means that owning and storing Ethereum can give easy access to initial coin offerings (ICO) for brand new tokens. New tokens are a risky investment, but attract a lot of buyers and present a great opportunity for a wider exposure to the risks and opportunities of the altcoin market.
New tokens appear more often in the past few months, as more developers create projects based on the Ethereum blockchain. The selling of tokens creates a supportive community around the new projects, but part of the tokens are sold off for fiat to finance the operations of the startups. That is why tokens hold risk, as some may fall prey to rapid selling.
If you would like to continue acquiring Ethereum, refer to our guide on How to Mine Ethereum.
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