The second-biggest cryptocurrency Ethereum is living one of the most important times in its history. If you are interested in buying it, here is a brief guide on how to do it.
With the booming decentralized finance (DeFi) industry being mainly built on the Ethereum network, the world’s second biggest cryptocurrency might look quite an option to have. For those new to cryptocurrency purchases but also interested in acquiring Ethereum coins, this article will introduce the basic guidelines on how to buy Ethereum in a few easy steps.
The ways of how to buy Ethereum include purchasing via:
- Cryptocurrency exchange
- P2P exchange
- Ethereum ATM
Why buy Ethereum?
Ethereum (ETH) is the second-largest cryptocurrency platform by market capitalization after Bitcoin. Although it is built on blockchain technology like the world’s leading crypto, Ethereum is a programmable blockchain that allows functionality of smart contracts and enables building and developing decentralized applications on its network. It also is the biggest and most accessible blockchain network on which the majority of stablecoins are built.
Ethereum is expected to shift from Proof of Work (PoW) to Proof of Stake (PoS) protocol in 2021. It launched the testnet version recently, which is the final stage before the long-anticipated transition to Ethereum 2.0.
The upgrade to the PoS protocol allows Ethereum to improve the network’s performance, increase scalability and efficiency. The current protocol of Ether is approaching its limits with the vast majority of the DeFi industry built on it and the highest ever transaction volumes.
Ethereum’s native cryptocurrency ETH is the second-biggest digital asset by market capitalization used for payments or stored as an investment.
The ways to buy Ethereum
Since Ethereum is one of the biggest digital currencies, it is not difficult to buy it. Almost all of the biggest centralized cryptocurrency exchanges (like Coinbase, Binance, Kraken, etc.) are trading Ethereum.
The centralized exchanges are the ones where your transactions are traceable, as you have to pass the identity verification before registering into such a trading platform. However, there are as well more private options to buy the world’s second crypto. Which way you choose depends on your preferences and on various factors worth considering before purchasing.
Buy Ethereum with ID on cryptocurrency exchanges
The centralized cryptocurrency exchanges are one of the most common types of exchange and also one of the first and most popular ways to buy cryptocurrency. Regular crypto exchanges serve as intermediaries between their customers and make a profit by collecting fees.
Regular crypto exchanges are private companies that provide platforms to trade digital assets. They also operate like intermediaries between their customers and make a profit by collecting fees. Centralized cryptocurrency exchanges comply with the Know Your Customer (KYC) policies and Anti Money Laundering (AML) requirements and thus asks for identity verification before using its services.
The exchanges with the highest trading volumes and the most famous ones are Coinbase, Bitstamp, Bitfinex, Binance, or Crypto.com. The vast majority of these exchanges accept traditional fiat payments and support fiat-crypto purchases.
To start buying Ether in such an exchange, you first need to complete the steps below:
- Open an account. Sign up by entering necessary personal details like email and password.
- Verify your ID. Submit the valid identity document and possibly a proof of address to verify that you are who you say you are. This step is necessary to process both deposits and withdrawals.
- Make a deposit. When you open a valid account, the further step includes depositing the funds into exchange. Various exchanges support different payment methods to choose from. However, most of them accept payments from credit cards, bank transfers, PayPal, etc.
- Buy Ethereum. Since you have your account opened and a deposit sitting inside it, you may buy your first ETH. If you bought some ETH coins for holding, keep in mind that it is always safer to withdraw them from the exchange into your personal wallet.
Cryptocurrency exchanges, although highly protected and safe ones are still dealing with various cyberattacks, that may result in stolen funds. Thus it is always safer to store your funds, especially those of higher amounts, outside the cryptocurrency exchanges.
Buy Ethereum without ID
As privacy issues become a hot topic worldwide, it is logical that not all cryptocurrency buyers are willing to reveal their identities. Although anonymous transactions suggest the shady activity might be involved, there are as well legitimate reasons why one would like to choose the more anonymous purchases.
One of the most common ways to buy Ethereum without revealing who you are is peer-to-peer (P2P) cryptocurrency exchange. Differently from its centralized counterparties, the P2P exchanges like LocalCryptos or Shiftal do not hold your assets and act as intermediaries. Some of them even do not require ID verification, making it even easier to buy digital assets.
P2P exchanges connect two parties (seller and buyer) and allow them to trade directly with each other. Although such exchanges have no limits on asset amounts, the service here is not free. P2P exchanges charge their users, however, their fees are lower compared to regular ones.
The process of purchasing Bitcoins involves almost the same basic steps as anywhere else:
- Sign up for opening a personal account on the P2P exchange. Verification steps are not necessary across some of the P2P exchanges, like email or phone number confirmation is enough.
- Find an offer. Offers are posted by cryptocurrency sellers from all over the world. You can choose them by reputation, location, or payment method (cash, bank transfer, credit card, PayPal, etc.).
- Open a trade. Enter the amount of ETH you want to buy and start a deal between you and the seller.
- Buy Ethereum. Make sure the seller put ETHs in escrow before sending money. The escrow locks the coins since the seller confirms that he received payment.
However, if you prefer buying Ethereum with cash, the other options than peer-to-peer exchange are also available. These are Ethereum ATMs. You can buy digital assets via your local Ethereum ATM, which you may find on the websites like CoinATMradar.
Despite the fact that there are thousands of Ethereum ATMs and tellers across the world, the majority of them are located in capitals and big cities, making the residents of more remote areas unable to use such options.
Nevertheless, if there happens to be the Ethereum ATM somewhere near you, here are the brief instructions of how to use it to buy your own Ethereum coins:
- Have an Ethereum wallet first. The step is inevitable, as you will need to have storage for your future ETH purchase. Any wallet is suitable, be it the online wallet or paper one. The most important is to have the address.
- Make an order. Choose a “Buy” option, select Ethereum as the cryptocurrency you want to acquire, scan your Ethereum wallet QR code, or enter the wallet address and follow the instructions on the ATMs screen. Some of them may ask for ID verification, however mainly for the transactions of higher amounts.
- Make a payment. Choose a preferred currency that you would like to pay with. Once the purchase is confirmed, Ethereums will be sent to the wallet address you provided.
When you have bought ETH you need to have a safe place where to store the digital coins. Here is when you need to set up an Ethereum wallet. The cryptocurrency wallet works quite the same as your bank account, where you can store and manage your funds.
There are several types of digital currency wallets, from online ones, the mobile or desktop apps, to the hardware wallets and even the paper ones.
Online wallets run on the clouds. This means they are easily accessible from anywhere in the world, however, they are also more vulnerable to breaches. The safer option might be downloadable mobile or desktop crypto wallet apps, however, they also include certain risks like losing or damaging the device or infecting it with the virus.
Meanwhile, the hardware wallets or even the paper wallets are considered to be the safest ones. The so-called “cold storage” wallets are physical devices with no connection to the internet, thus resistant to cyber threats and digital thefts.
Ethereum is one of the most successful cryptocurrencies in terms of market capitalization. Furthermore, the Ethereum network, which is the basis for the majority of DeFi projects, has almost doubled in its value this year. Moreover, the number of Ethereum active addresses has also increased significantly this year.
Additionally, Ethereum is the biggest and most accessible blockchain network on which the majority of stablecoins are built. With the thriving popularity of the DeFi sector and also with the network’s transition to the Proof of Stake protocol in mind, Ethereum might look quite an interesting asset to have.
And if you have decided to acquire it for holding or for trading, there are various ways to buy Ethereum, including the most popular and simple one of purchasing via cryptocurrency exchanges. However, if you prefer to keep your personal data confidential, buying the second-biggest digital asset via P2P exchange or via Ethereum ATM is also an option.