What Is Ethereum?
According to Ethereum.org, “Ethereum is a decentralized platform that runs smart contracts”. Ethereum is a platform for sharing information that cannot be manipulated or changed. It's a blockchain similar to the one underlying the bitcoin cryptocurrency that records information chronologically and publicly. It is believed that in the future, Ethereum may be used to securely transfer money or to send documents from one end to another. Today, these processes require multiple steps for verification and authentication, but Ethereum makes verification a one-step process because the information is incorruptible in the first place.
What Is Ether?
Ether, also known as the crypto-fuel for the Ethereum network, is the unit of currency in Ethereum. It's a token that can be exchanged for services on Ethereum platforms. Ether is a necessary element for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. The symbol for Ether is ETH.
ETH is used as a form of payment by developers of apps built on Ethereum, as well as by users who are willing to access and interact with smart contracts. It is also the incentive that ensures that developers write quality applications for the platform, and that people for are compensated for their contributed resources to maintain network’s health.
You can buy Ether for Bitcoin, or other altcoins or fiat currencies. However, you can also load funds using credit card issued in your local currency and, eventually, buy ETH as well.
Ether is one of the most volatile assets that can be traded on the crypto markets today. It is these exceptional price fluctuations that have attracted traders and investors from all over the world, having discovered the opportunity to make huge returns. Traders who are capable of buying and selling at the right time stand to make exceptional profits within a short period of time.
Purchasing Ethereum can be done easily at any of the Ethereum exchanges supporting ETH. Once Ethereum has been purchased with fiat currencies such as USD, EUR, GBP etc., the funds can be stored on the exchange itself or in your hot (online) or cold (offline) wallets.
The following options can be used to purchase ETH:
Buy Ether Using Bitcoin:
If you already possess Bitcoins (BTC), transfer the coins to your BTC wallet on the exchange and exchange it to ETH. Remember, always secure your account with 2 Factor Authentication.
Buy ETH With Credit Card:
If you want to buy ETH for fiat currency, then funding your account with credit or debit card is the easiest way.
Buy Ether With Bank Transfer:
Buying Ether with cash on your bank account is easy and advantageous, especially when it comes to large amounts. For faster and cheaper deposits in Euros, we recommend using SEPA. Consider upgrading your CEX.IO account to enjoy augmented payment opportunities, priority support, and custom conditions.
The process of buying Ether may vary from exchange to exchange, however, the principles are very much the same. Below are the underlining principles to buy ETH regardless of the exchange.
Register On An Exchange
Register at your chosen exchange by submitting a few personal details. Full identity checks are often included later in the process when a deposit or withdrawal is made.
Complete KYC/Identity Checks
Before/after depositing, or prior to withdrawal, exchanges must carry out “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks. Exchanges will require proof of address and photo identification to proceed.
Choose A Deposit Method
Each Ethereum exchange will offer their own banking methods. These are often a mix of bank wire transfers, SEPA, credit/debit card or PayPal payments. Each exchange will typically charge a fee for each deposit method; fee details are usually found in the footer of the exchange’s website.
Secure Your Account Using 2-Factor Authenticator
Two Factor Authentication, also known as 2FA, two factor verification or TFA (as an acronym), is an extra layer of security that is known as “multi-factor authentication” that requires not only a password and username but also something that only, and only, that user has on them, i.e. a piece of information only they should know or have immediately to hand – such as a physical token. 2-FA is essential, to avoid unauthorized access to your account. It renders your account secured even when it is hacked. The 2-FA may be in form of SMS with the use of Google Always remember to set your 2-FA before making any deposit to your wallet.
Make A Deposit In Fiat Currency (USD, EUR, GBP)
Deposits may take up to several hours to arrive in your exchange account. Deposit times will vary from exchange to exchange and the deposit method chosen. Also, the fiat currencies accepted on may differ from exchange to exchange.
Buy Ether With Your Deposited Funds
Once your fiat currency has arrived in your exchange account, you can use this currency to purchase Ether. Many exchange platforms have made this process very simple.
Buying and selling of ETH on the following most recommended exchanges will be discussed.
Major Exchanges To Buy ETH With Credit Cards
There are many ways to buy Ether with your card, and this section will discuss the major exchanges where you can buy ETH with credit or debit card. Note that there is always transaction fees associated, depending on your local bank.
For traders in the United States, GDAX has some of the highest volumes and is a convenient way to turn your BTC into ETH, especially if you already used GDAX or Coinbase to initially buy Bitcoin. If so, you won’t even need to create a new account but can just immediately start trading your bitcoins into ETH.
CoinMama is a nice option because you can buy less than $125 worth of Ethereum without the need to verify your identity. You can instantly sign up and buy Ethereum. The advantage of using CoinMama is that transactions are done very fast compared to other exchanges. However, the cost is relatively higher than others exchanges. CoinMama also supports credit and debit cards from basically any country.
Kraken is based in Europe and is one of the largest ETH/EUR trading markets. Kraken is a good option if you live in Europe and want to buy a large amount of Ether tokens.
For traders in the United States, Europe, Canada, UK, or Singapore, Coinbase is recommended to be the easiest way to buy ETH with a credit card.
Poloniex is known to have the largest ETH/BTC trading volume of all exchanges. If you intend to buy a large amount of Ether with your bitcoins, then Poloniex may be the best option since they have the best liquidity.
Last but not least, CEX.io is another long existing Bitcoin exchange. You can use the exchange to trade your BTC for ETH at very low fees if you use the trading feature and not the buy/sell feature.
Now, To Buy ETH
- Create an account on one of the exchanges mentioned above.
- Verify the account.
In this process, you will need to upload your major identity documents proving you are who you say you are. This is basically done by the exchanges to curb scamming. Once you upload your documents, you’ll wait for your account to be verified. Depending on the platform and its traffic of transactions, the verification process may take up to a day or more.
Follow the instructions on the exchange to deposit your local currency into your wallet on that exchange. This, depending on your bank and the transfer method, this process may take up to four (4) business days.
- Select the buy option, and choose USD/ETH as the currency pair you intend to exchange, and buy ETH with USD. Note that you do not need to worry about the exchange rate, since it’s always calculated automatically.
- Once you have all the ETH you want, you can withdraw that ETH into your cold wallet, as exchanges are not recommended to keep your cryptographic asset (ETH in this case).
- If you already have BTC, you can use Shapeshift.io, Bity.com, or Changelly to convert your BTC into ETH. Start a BTC/ETH exchange and it'll tell you where to send your BTC. (If you have your BTC on an exchange, you can likely exchange them for ETH on that exchange without the need for Shapeshift.)
This process has been made simple on COINOMI, as Changelly and Shapeshift have been added to the app.
- Then create an Ethereum Wallet account and back it up. In Circle or Coinbase, send all the BTC to that address. The ETH will appear in your ETH wallet in few minutes.
You might be thinking of how to transfer your ETH to the cold wallet don’t worry, the following section will guide you on how to transfer your ETH to your wallet.
How To Buy/Sell On Ploniex
- After registration on Poloniex,
- Verify your account and set the 2-Factor Authenticator(Using Google Authenticator)
- Click on BALANCES at the top right corner
- Select Deposit on the USDT column, and buy BTC
- Go to the left corner of the dashboard and click on EXCHANGE
- At the top right select ETH from the list of tokens on the market column
- Type the amount of ETH you intend to buy, and the BTC value is calculated automatically.
- Click BUY button. Andyour order is placed automatically.
- Wait for theorder to buy ETH and the calue of your ETH will be displayed in your balances
To sell, follow the above process and convert to USD or BTC, or other altcoins.
Transferring Ether To A Wallet
To transfer ETH from an exchange to a wallet, follow the steps below:
- Download COINOMI (or any reliable cold wallet app) app to have a wallet. Note that we recommend cold wallets, because of its security and reliability. Unlike hot or online wallets which are vulnerable to hacking.
- Create a password and copy the generated seed phrase to a safe secure physical note. (The seed phrase is essential to gain access to your wallet in case of your device damage)
- Click on the + sign and select ETH from the list. ETH wallet will be automatically created.
- Click on receive, and copy the address shown on the dashboard. Note: The address should start with “0x….”
- On your exchange, select your token (ETH in this case)
- Select the withdraw function, add type the amount of ETH you are willing to transfer.
- Paste the address copied from your cold wallet to the To: Address box
- Click on send/transfer, and wait for confirmation while checking your cold wallet.
Keep Your Account Safe
To prevent hackers from gaining access to your account, you have to secure these pieces of information:
- Your address (0x757aTs5…..)
- Your password
- Your seed phrase or the private key.
In any circumstance, you MUST NOT EXPOSE YOUR PASSWORD, NOR THE SEED PHRASE to anyone.