1. Buying Ethereum (easily) requires signing up to Coinbase. Coinbase is the safest and most trusted place to buy the major cryptocurrencies. You’ll also get $10 of free Bitcoin when you signup through this page.
2. Once purchased, you have three options: Leave your Ethereum inside coinbase, transfer your Ethereum to another digital wallet, or download your Ethereum onto a cold storage device, which can be kept safe offline.
While the cryptocurrency bitcoin has been around for years, it’s popularity has exploded in recent months. Bitcoin has officially reached Wall Street with futures of the cryptocurrency surging up to 26% as it debuted, even triggering two trading halts to calm the explosive market. Until now, buying bitcoin was limited to online venues with little or no oversight, but Bitcoin trading is now more accessible to everyday consumers.
Ethereum is a newer form of cryptocurrency that’s similar to Bitcoin but different in many key ways. Bitcoin uses blockchain technology to create a peer-to-peer electronic cash system that enables Bitcoin payments.
Ethereum is different due to its technology. Ethereum’s coin value is called Ether, which can be bought and sold. While Bitcoin only works as currency, Ethereum is a ledger technology that companies can use to create new programs.
As with Bitcoin, Litecoin, and other types of cryptocurrency, Ethereum prices have soared in recent months. Ether has reached new highs with a value that’s about double that of Litecoin.
Basics of Buying Ethereum
Just as you need a brokerage account to buy stock, you need a wallet to store digital currency. A wallet holds keys, or number and letter strands that allow you to access your Ether. There are two types of wallets available: a cold wallet is just for offline storage whereas a hot wallet allows you to store, buy, and sell Ether through a website. After choosing a wallet option, you need to decide where to buy Ethereum.
Buying Ethereum Through Coinbase
While it may not be the cheapest option, Coinbase is the most user-friendly way to buy Ethereum, especially for beginners.
Coinbase allows you to convert local currency such as dollars or euros into Ether. It also offers a secure hot wallet for storing your cryptocurrency.
Coinbase is trusted by millions of users around the world, but it is not an Ethereum exchange. Coinbase instead acquires Ether from other buyers and sellers to complete transactions. Keep this in mind as it can make transactions slower than other options.
Getting started is straightforward and takes about 10 minutes. The first step is signing up for an account and choosing your payment method. You will need to connect a credit card, debit card, or bank account and complete verification.
There are pros and cons to choosing a debit/credit card or a bank account. Using a card allows you to buy immediately, but you will be limited to just $150 per week. If you link your bank account, you are given a higher buy limit, but your transactions will take 4-5 days to process. Adding a bank account gives another perk: you can use the auto-buy feature to purchase specific amounts of Ether on a schedule of your choosing. This is a good solution for a “set it and forget it” investment approach.
Buying Ethereum Through Kraken
Kraken allows you to overcome many of the shortcomings of Coinbase if you want advanced options like margin trading and stop-loss orders. This US-based company is the largest Bitcoin exchange in terms of liquidity and supports Ether trading in addition to other types of cryptocurrency that are not supported by Coinbase.
Buying Ethereum Through Bitstamp
Unlike Coinbase, Bitstamp allows you to trade Ethereum, Bitcoin, and more with other users. Bitstamp does not work as a middleman and it offers higher liquidity than Coinbase. Due to its large user base, Bitstamp transactions are almost instant. The main downside is higher fees. Bitstamp fees range from 0.5% to 0.2%. To qualify for the lowest rates, however, you must trade at least $150,000 within 30 days.