How to Buy Ethereum (ETH)

How to Buy Ethereum 

If you are considering buying Ethereum, you are in the right place. We’ve prepared a detailed guide on Ethereum and how to buy it, as well as how to store your investment and keep it safe. But before we get to that, let’s start by briefly explaining why people invest in this revolutionary asset.

What Is Ethereum?

When Bitcoin was first launched, it was almost immediately followed by dozens of other cryptocurrencies, each a slightly different version of Bitcoin with very few changes in design. Even today, hundreds of new coins that pop up every month take advantage of Bitcoin’s open-source code to mimic the original structure, though with very little success in the market. After all, why should you bet on a knock-off when the original is still in the race? 

But this cycle of mint-and-release was interrupted in 2015 with the launch of Ethereum, a truly unique project in every way. Unlike BTC-copycat cryptocurrencies that sought to be the next big hit in crypto and “reach the moon,” Ethereum was not designed only as a cryptocurrency to be exchanged but as a platform of smart contracts that would lay a foundation for other blockchain-based projects.

Two years after Vitalik Buterin published the Ethereum whitepaper, the Ethereum blockchain was launched as a host for decentralized apps. 

Decentralized apps on the Ethereum network allow users to enter into contracts without the help of intermediaries like banks or financial institutions. Thus, the launch of Ethereum paved the road for the DeFi era, where users around the world can participate in the DeFi economy through smart contracts.

Ethereum is widely seen as one of the most successful projects of the crypto era, as it expanded our view of the possibilities of blockchain technology. Of course, like all new technologies, its legacy is still murky. Faulty code and structural weaknesses have resulted in dozens of hacks, robbing people and projects of millions of dollars in crypto.

DeFi itself is famously made up of scams and pyramid schemes that prey on the hopeful, as in the case of Celcius Network and more. Even NFT trades, a market craze that hit its peak in 2021, began to look more like Ponzi schemes once the hype started to die in 2022.

Lİke many other crypto projects, Ethereum’s future depends on several issues, including regulatory developments and social and technological innovations the platform seeks. For now, we can say that it has consistently been one of the most valuable assets to come out of the crypto-era.

Where Can I Buy Ethereum?

Let’s start by clearing a misunderstanding. Technically, you can’t buy Ethereum. You can, however, buy Ether, Ethereum’s native cryptocurrency.

Ethereum is the name of Ether’s blockchain and wider network. On this network, each operation depends on executing a smart contract, which has a cost. The cost is calculated in Ether, the platform’s native currency. That means that Ether’s value rises in proportion to the number of people who use it and the coin’s usefulness.

You can buy Ether through almost all cryptocurrency exchanges, as well as several other platforms that deal with cryptocurrency, including the likes of Robinhood, Revolut, and PayPal. As one of the most popular digital assets in the world, Ether is incredibly accessible. 

If you are looking to invest in other cryptocurrencies as well, it’s a good idea to open an account on a crypto exchange to purchase Ether. These exchanges specialize in crypto trades and offer much better prices compared to their counterparts in mainstream financial apps. 

On centralized exchanges like Binance, Coinbase, and Kraken, you can buy Ethereum with fiat currency (aka national currencies like USD, EUR, AUD, or CAD). Most of them offer credit/debit card purchases, as well as bank wires and other deposit methods.

Crypto exchanges may seem intimidating but are quite easy to navigate – feel free to check out our detailed guides for how to buy Ethereum to see how easily you can buy ETH through them.

Another option is to use a financial app like Revolut, Robinhood, or eToro to buy ETH. If you already use these apps, it might be easier for you to add Ether to your portfolio through them. However, these apps often charge higher fees and may have some downsides. Some apps don’t let you move your digital assets to other wallets or sell them on the open market.

There are also famous decentralized exchanges like SushiSwap or Uniswap, where you can trade Ether for other cryptocurrencies. Once you purchase Ether, you can start trading it on these exchanges for other digital assets.

How to Buy Ethereum

As we said above, there are three ways to buy Ethereum: financial investment apps, centralized cryptocurrency exchanges, and decentralized crypto exchanges. Beginners will do their best to try out the first two, as you must already own digital assets to use decentralized exchanges.

As you can see, your first task before buying Ether is to decide where to buy it.

Where to Buy Ethereum?

Luckily for you, we already prepared a thorough guide on the best cryptocurrency exchanges and alternative platforms where you can buy ETH and other digital assets. 

Our list consists of markets with the highest trading volumes. However, trading volume isn’t the only important metric when it comes to choosing an exchange. You should also take the platform’s reputation into account.

We have detailed reviews of each platform we listed, as well as one-on-one comparisons for most of them, so you can get a better feel of which market is the best for you.

When choosing a platform, consider its reputation, security, and fees. Reputation ensures you stay away from fraudulent or predatory exchanges, where users encounter a lot of problems when it comes to trading or selling their assets.

Security is also important, as most platforms are regularly targeted by hackers. Finally, if you are planning to actively trade cryptocurrencies, you should look for a platform with cheaper trading fees.

Buying Ethereum

Once you decide on an exchange, the rest is pretty easy. Simply visit the platform’s website and open an account.

Thanks to the growing popularity of cryptocurrencies, crypto has become super accessible. On most exchanges, you can buy crypto with one click.

For example, on Binance, all you have to do is to click “Buy Crypto,” and you will be redirected to the easy buy widget. Enter how much you want to spend, select the currency you want to buy, and pick a payment method. Most exchanges support credit and debit cards as well as third-party payment options like Banxa, Simplex, PayPal, and others.

Another way to buy Ethereum is to exchange USD or another fiat currency with ETH on the exchange spot market. Click “Trade” to access the exchange market and select the USD/ETH pairing. Most exchanges offer cheaper fees for trading on the spot market compared to easy buy prices.

You don’t have to make a big investment to start trading Ether. You can start your journey by investing as little as 20-30 USD. 

Where to Store Ethereum

One of the most crucial parts of crypto ownership is the issue of storage. There are thousands of crypto wallets out there, including exchange wallets, free software wallets, or hardware wallets you can purchase physically.

If you don’t understand the differences between these wallet options, don’t fret. We will provide a detailed explanation of each wallet type and its benefits and fallbacks.

To start with, let’s clear a misunderstanding about crypto wallets first. While most people think crypto wallets hold their digital assets similar to how cloud or hard drive hold their data, that isn’t true.

Most cryptocurrencies, including Ether, are based on a blockchain. These blockchains are like giant ledgers, notebooks where each account is represented by a wallet address. Each blockchain operation, like each asset transfer, is noted in the notebook, and that “entry” is shared simultaneously with everyone.

So when you send ETH to someone, you don’t send a data file. You only instruct the ledger to make a note of your transaction, and everyone accepts that as truth. But how do you make that instruction? Through your wallet, of course.

When you open a crypto wallet, like an ETH wallet, you automatically receive a unique wallet address and key for your wallet. Your wallet address is public and can be used to receive crypto from other people.

Your wallet key is like your password, every time you need to make a change (for example, sell your assets), you use the wallet key to prove your ownership of your account.

So, a wallet helps you interact with the blockchain by storing your wallet key. If the key is compromised, your assets become inaccessible to you. And how do you keep your keys secure? That’s where all those different types of wallets come in.

Exchange Wallets

When you open an account on a centralized exchange and buy some ETH, your assets will automatically be stored in the exchange’s wallet. This is the most convenient option out there because you don’t need to do anything. Open an account, buy crypto, and trade it as you like on the exchange.  

Of course, with convenience comes popularity: exchange wallets are the most popular option. However, that doesn’t mean they don’t have any downsides. Most exchange wallets are custodial wallets, which means you don’t control your wallet keys. Instead, the exchange has total control over the funds they store.

Exchange wallets also have a couple of advantages. For example, you can trade and stake your assets easily for profit.

The other benefit of this arrangement is that the exchange shoulders the security responsibility. They have to manage the upkeep of their security practices to keep the wallet keys safe and the assets secure. 

Unfortunately, they are not always successful. Exchanges are frequently targeted by hackers. As a solution, most exchanges only keep around 10% of their funds stored in exchange or hot wallets and employ basic insurance to ensure your funds are safe even if they are hacked. However, a more sinister problem occurs if the exchange is a scam and/or bankrupt.

In those cases, the exchange either packs up overnight and disappears with all the funds in their storage (e.g., Africrypt, Thodex, Quadriga) or it declares bankruptcy (FTX and Bittrex), and the funds are used to pay the company’s debts to creditors (rather than crypto owners) as it recently happened with Bittrex.

That’s why people are advised to keep only small amounts of crypto in exchange wallets. That way, if anything happens, your losses will be limited.

Self-Custody Hot Wallets

What do you do if you can’t trust your funds in an exchange wallet? You store your keys yourself, of course.

Before crypto exchanges were popular, the original way to store digital assets used to be software wallets that were managed by individuals. You can download software wallets to your computer or phone, and access the blockchain through your internet connection.

The Ethereum network, for example, suggests 51 different self-custody wallets you can use to manage your ETH funds. 

These wallets have developed interfaces that allow you to access Ethereum-based apps. You can also filter the wallets to see which ones are more beginner friendly, allow trading NFTs, or offer access to let you buy ETH directly from the wallet interface.

While it all sounds wonderful, there is one problem with self-custodial software wallets. Since they are downloaded to your computer or phone and require the internet to function, they are also vulnerable to hackers.

It’s notoriously difficult to keep your keys safe in a software wallet when the device is connected to the internet. Several DeFi projects lost millions in funds after their devices were hacked and wallet keys were compromised. For regular users, the burden of keeping their internet-connected device secure is exactly that: a burden.

Bar those who are experts in internet and computer security, very few retail users have the skills to adequately secure and manage a software wallet.

Of course, if you think you have the necessary skills, you can use a software wallet. For example, MetaMask is a good beginner wallet that supports Ethereum-based tokens and NFTs.

Wallets like MyEtherWallet and Exodus are also great, for they allow you to set custom gas fees and connect to hardware wallets for extra security.

What are hard wallets, you say? Let’s find out.

ETH Hard Wallets

Hard wallets are physical devices that store your wallet keys inside a hardware drive. Most hardware wallets resemble USB sticks: They are light, compact, and easy to carry around. 

The best thing about hardware wallets is their strong resistance to hackers: These devices are not connected to the internet and thus protect your keys from hacking attempts.

Most hardware wallets come with special wallet software that allows you to carry out trading operations via the wallet interface: You can also connect these wallets to other software wallets for increased efficiency without sacrificing security.

Even if you lose your hardware wallet or get it stolen, you can still access your wallet by using a backup. Overall, they are considered the best storage option for all digital assets, thanks to their excellent security. Keystone, OneKey, Ledger, and Trezor are hard wallets that support ETH and Ethereum-based tokens.

So why doesn’t everyone use a hard wallet? Well, they probably should! However, hard wallets can be quite expensive, with prices ranging between 80 to 250 USD. Consider the fact that almost all software and exchange wallets are free, and you have it.

To be honest, you don’t have to purchase a hard wallet if you are just beginning to dip your toes in crypto trading. But if you decide to get serious with your investment, it’s probably a good idea to invest in a hard wallet of your own.