HOW TO BUY AND STORE ETHEREUM
If you’re new to the crypto-currency space, you may find the idea of how to buy and store Ethereum is quite disconcerting. You’re not wrong, it might be confusing.
The good news is, you’re in the right place!
First, you need to understand Ethereum – you can start over here.
Now that you are sure you want to buy some Ethereum, let’s explore your options.
WHERE AND HOW TO BUY ETHEREUM WITH FIAT CURRENCY
There are several ways you can purchase Ethereum directly with fiat currency such as USD, EUR or GBP. All you need is a debit or credit card or just a bank account that facilitates international transfers.
You simply register an account on one of the recommended exchange platforms below, verify your identity, add a method of payment and you’re good to go to buy some Ether. I will discuss how to store your Ether safely below.
The verification process that you have to go through in order to buy Ethereum takes now much quicker that it used to and the purchasing process is slowly becoming hassle-free.
That’s a good news!
Just two years ago, you had to take extreme measures to buy Ether. For example, you had to purchase Bitcoin first; then create an ETH wallet; then convert your BTC to ETH – seems like it’s not too complicated, but then you would have to reverse this process if you wanted to convert your Ether into fiat currency.
All these conversions would have costed you dearly in transaction and exchange fees (and of course time!)
Now, all you have to do is just open an account on one of these recommended exchange platforms to purchase your ETH:
The most popular choice is Coinbase as it allows to use your credit card to buy Ethereum directly on the website. Coinbase is a major crypto-currency exchange that offers other services as well. Apart from Ether, you can purchase Bitcoin and Litecoin – you can also sell your crypto-currency directly on their website and convert your coins into fiat money. You should definitely give it a go.
Pros: easy to use, minimalist layout, accepts credit cards
Cons: often down due to maintenance, slow customer support
I would also advise to visit CEX.io – it’s another exchange that accepts credit cards to buy Ethereum as well as Bitcoin. It offers pretty much exactly the same services as Coinbase, but also features margin trading. CEX is definitely one of the major and established players on the market right now.
Pros: easy to use, good customer support, accepts credit cards
Cons: verification process can take longer than 48h for non-US users
WHY ARE THERE DIFFERENT PRICES ON DIFFERENT EXCHANGES?
Oftentimes I come across questions such as “why is there a different price for the same coin on different exchanges?”.
It’s quite simple, yet it might be confusing when you’re just starting out in the crypto-world.
The answer is: the price is different for the exact same reason why bread is priced at different rates in various bakeries!
Each exchange platform has their own price mark-up which ultimately results in higher or lower prices for the same digital asset.
It’s wise to compare the prices before you decide which exchange you’re going to use to buy and store Ethereum.
The price differences might seem insignificant and you might just tell yourself “it’s just a few dollars more”. Let me break it down!
That might be right if you want to buy less than $50 worth of Ether and hold on to it for another two years. However, if you plan on trading your ETH quite regularly and you’re in the crypto-business for the long haul and you will be making a few transactions a week or month, then you should definitely pay attention to the price you’re paying to purchase any digital coin.
It will add up to enormous amounts over time and it’s a big no-no in the trader’s book!
WHERE AND HOW TO BUY ETHEREUM WITH BITCOINS
It’s easier to buy Ether if you already have some bitcoins.
That’s because you must have gone through various verification processes already, which makes you a legit customer. Although, there are certain ways to buy Bitcoin totally anonymously, but you can’t really do it with large quantities.
Once you were verified to purchase BTC, it’s just a matter of opening an ETH wallet and using the cheapest exchange platform that can convert Bitcoin to Ether.
In addition to that, you can use these exchange platforms to buy Ether with Bitcoin:
Poloniex is a great choice to use for buying Ethereum as well as 63 other altcoins. The platform offers in-depth insights into the crypto-currency world and provides a good range of useful tools to analyse and margin trade all coins.
Pros: buy any major alt-coin, easy to use, features margin trading
Cons: both the website and customer support could be slow at times
Another option to obtain some Ethereum is to use Kraken which is also established on the market as a reliable exchange platform. Its layout, however, might come across as confusing and not-so-clear-to-deal-with. It’s definitely workable if you spend some time on it, but it’s definitely far from intuitive as its developers claim it to be.
Pros: buy major alt-coins, features margin trading
Cons: takes time to get hold of, customer support might take time to respond
GDAX is Coinbase’s brother. Basically, it’s best to look at it this way as it might be confusing to some: Coinbase exists so it’s easy to buy, sell and store Ethereum and other cryptos, whilst GDAX is there for professional traders that speculate on digital assets on a regular basis. GDAX is an excellent platform where you can purchase ETH or BTC. It offers professional trading tools as well as margin trading.
Pros: for professional use, features margin trading
Cons: limited availability to non-US users
HOW TO STORE ETHEREUM SAFELY AND SECURELY
Buying Ether is just one side of the equation – now, you have to learn how to store your Ether safely and securely.
It might sound straight-forward and insignificant, however, it’s imperative to take it seriously as you might end up losing your hard-earned coins.
WHERE TO KEEP ETHEREUM
ETH, and other coins for that matter, are stored on crypto-currency wallets. You can compare wallets to bank accounts. That’s where you keep your funds; that’s where you receive coins to, and that’s where you spend your coins from.
Now, there are several types of wallets and each of them have different levels of security.
Here’s a quick summary to illustrate this, starting with the most secure wallet:
- Paper wallets – most secure
- Hardware wallets – most secure
- Desktop wallets – good security
- Hot wallets – average security
ETHEREUM WALLET REVIEW AND COMPARISON
ETHEREUM PAPER WALLETS
Paper wallet is the most secure way of storing Ethereum that exist today. These are simply private keys written down or printed out on a laminated piece of paper and locked away in a safe or secure deposit box. You can make as many copies as you wish and store them securely in different locations. The trade-off between accessibility and security is of the highest inconvenience though.
They are used for long-term investments and to store large amounts of coins.
Pros: maximum security
Cons: impractical for regular use
ETHEREUM HARDWARE WALLETS
Just like paper wallets, the hardware option is on par in terms of security because they are disconnected from the internet. They are simply hardware devices that you use to put your Ether private keys on and lock it away somewhere safe. Because you can’t access them via network, they cannot be hacked. If they cannot be hacked, then your private keys cannot be stolen.
They are popular when it comes to storing large amounts of coins for the safety reasons.
Ledger Nano S is a hardware wallet that stores your Bitcoins, Ethereum and other altcoins. This is an extremely secure option if you plan on storing large amounts of coins. The cheapest Ledger goes for €69. It’s a must-have if you’re in the crypto-currency business for the long haul.
Pros: maximum security, altcoin support, excellent customer support, easy to use
Cons: no free substitutes
Trezor Hardware Wallet is my second best cold wallet. It serves the same purpose as the Ledger Nano S. The design is sleek, although the buttons could have been a little larger. The cheapest Trezor sells for €89.
Pros: maximum security, altcoin support, easy to use
Cons: more expensive than Nano S
KeepKey Hardware Wallet is a designer cold wallet that stores Bitcoins, Ethereum and other altcoins. It provides sleek design and futuristic look with maximum security at $99.
Pros: maximum security, altcoin support, great design
Cons: cheapest option is more expensive than cheapest Nano S or Trezor
ETHEREUM DESKTOP WALLETS
Desktop wallets are second most secure wallets available today. Their security level depends on the lengths you go into to ensure proper security of your own computer. An investment in a good antivirus and firewall could be a priority before you store a lot of coins on your computer.
Coinbase Wallet wallet stores Ethereum, Bitcoin and Litecoin. In addition to that, it provides 2-step verification factor and other services. It’s a great place to start your crypto-journey, although the website is down quite often due to new users flooding in.
Pros: altcoin support, accepts credit card, easy to use, offers hot wallet mobile version
Cons: slow customer support
Exodus Wallet is a great choice that securely stores not only Ether but all sorts of altcoins. All of the coin can be exchanged to other digital assets within the wallet. It’s secure because you don’t host your private keys anywhere else but your computer. Thus, the more secure your computer, the harder it will be to hack it.
Pros: altcoin support, self-hosted, easy to use
Cons: no mobile version (desktop only)
Jaxx Wallet is one of the most popular wallets that accommodates Ethereum and other altcoins. It’s available on desktops and all sorts of mobile devices. Jaxx features ShapeShift which allows you to convert your Ether or Bitcoin into other coins automatically creating a wallet for them.
Pros: altcoin support, ShapeShift, easy to use
Cons: least secure desktop wallet
SUMMARY OF BUYING AND STORING ETHEREUM
You should now be able to know where and how to buy and store your Ethereum securely.
In case any part of the article was unclear, here’s a quick step-by-step recap of how to do so:
- Open an account via exchange platform such as Coinbase or CEX
- Verify the account by submitting your ID and photocopy of a utility bill
- Purchase Ethereum directly on the website with your credit card or bank account
- Open several Ethereum wallets and distribute your coins between them to dilute risk of keeping too many eggs in one basket
- Purchase a hardware wallet if you plan on holding on to large amounts of Ethereum or other coins for an extended period of time
- Avoid storing large quantities of digital cash on hot wallets that are available on mobile devices
- Sell your coins through exchange platforms to convert them into desired fiat currency
If you have any questions regarding buying Ether or storing it, please let us know in the comment section below! Meanwhile, feel free to subscribe to our weekly crypto-round up on the bottom or to the right of the screen to stay on top of the Ethereum world!