How to Buy Ethereum – A quick start beginner’s guide

81

Lately there has been a lot of talk about the hottest altcoin in the community – Ethereum.

What is Ethereum?

Ethereum is a cryptocurrency and a blockchain platform with smart contract functionality. It’s basically a decentralized platform for developers to build apps on top of and it was invented by Vitalik Buterin in 2013.

Ethereum can be used to codify, decentralized, secure and trade just about anything: voting, domain names, financial exchanges, crowdfunding, company governance, contracts and agreements of most kind, intellectual property.

And what is Ether?

Well, Ether is the currency of the Etherium platform. Ether will be required by anyone wishing to build upon or use the Ethereum platform. Just like BItcoin, Ether can be traded around the web and mined. In a second I’ll show you exactly where you can buy it. Most people use the term Ethereum to refer to the currency instead of Ether and that’s why it can get so confusing.

The total supply of ether and its rate of issuance was decided by the donations gathered on the 2014 presale of the currency. The results were roughly:

  • 60 million ether created to contributors of the presale
  • 12 Million (20% of the above) were created to the development fund, most of it going to early contributors and developers and the remaining to the Ethereum Foundation
  • 5 ethers are created every block (roughly 15-17 seconds) to the miner of the block
  • 2-3 ethers are sometimes sent to another miner if they were also able to find a solution but his block wasn’t included (called uncle/aunt reward)

The founders of Ethereum state that Ether is not a currency as much as it is “crypto-fuel”, meaning it’s a token that has one main use – to pay for the Ethereum platform. This means that you probably won’t be able to buy stuff with Ether online. However you can still trade it and invest in it in hopes its price goes up.

Because Ether is less “mature” than Bitcoin at the moment, it’s less suitable for non technical people. For example, you can download Ether’s official wallet app from github, but there’s no “user friendly” version of it yet. There’s also MyEtherWallet and EthereumWallet available with a simple interface.

Ethereum (ETH) vs. Ethereum Classic (ETC)

Ethereum Classic is a cryptocurrency that was created due to a disagreement with the way original Ethereum conducted business. The catalyst for the split was due to a hacker finding a way to steal $60m worth of Ethereum coins. The supporters of ETH said that the code should be altered and the stolen coins should be refunded, while the supporters of ETC said that “code is law” and whatever happened happened. So in real life what happened is that ETC was the same original Ehtereum code and ETH forked their code to create a new Ethereum.

Therefor 2 identical competing currencies were created that had 2 different exchange rates. Today ETH’s price is much higher and is more common around the general cryptocurrency community.

How to buy Ethereum (credit card, wire transfer and cash)

The easiest way to buy Ethereum (i.e. Ether) would be through one of the popular Bitcoin exchanges that also supply Ethereum.

Buy Ethereum through Coinbase

The most convenient and cheapest way to buy Ethereum would be Coinbase (if it’s available in your country):

  1. Open a Coinbase account
  2. Add your payment method (Credit card or bank account)
  3. Go to “Buy/Sell” and select the amount of Ethereum you desire
  4. Click “Buy Ethereum”

Coinbase will sell you ETH for a fee of 1.49%-3.99% depending on your payment method (credit cards have a higher fee than wire transfers).

Buy Bitcoins on Coinbase Read our Coinabse review

 

buy Ethereum Coinbse

Buy Ethereum through Cex.io

CEX.io is a Bitcoin exchange that also sells ETH via a credit card. The fees for on CEX.io are already calculated into the exchange rate, that’s why it will seem higher than other exchanges. For example, the exchange rate for 1 ETH on Coinbase is $19.62 while on CEX.io it’s $21.08. However CEX.io works with countries worldwide (unlike Coinbase).

  1. Open a CEX.io account
  2. Add your payment method (Credit card or bank account)
  3. Go to “Buy/Sell” and select Ethereum
  4. Choose the amount of Ethereum you want to buy
  5. Click on “buy Ethereum”
Buy Bitcoins on Cex.io Read our Cex.io review

 

Buy Ethereum on Cex.io

Buy Ethereum through Coinhouse

If you live in the EU (Eurozone) another good option could be buying Ethereum from Coinhouse. The company is a Bitcoin and Ethereum broker that started out supplying service only to people from France and gradually expanded to the rest of Europe. You can pay via a credit card, debit card or Neosurf.

Buy Bitcoins on Coinhouse     Coinhouse review coming soon

You can also get Ether from several Bitcoin exchanges like Krakenpoloniex and shapeshift.io.

Don’t want to buy? You can day trade as well

If you’re only into Ethereum to profit on the exchange rate you can also invest in Ethereum CFDs (contract for difference). The idea is that instead of actually buying Ethereum you can just trade according to the exchange rate. CFDs is usually suited for experienced traders and your money is at risk when doing so. At the moment Plus500 are the only company that offers Ethereum CFDs.

You can also mining Ethereum

Mining Ethereum uses proof-of-work. It’s similar to Bitcoin mining in a sense that there is a diminishing block reward for every block mined.

You can try mining Ethereum using your own computer (CPU mining), but it will probably not get you too far. However, if you have a dedicated GPU set up for the task then you can get some real rewards. For information on exactly how to mine Ether visit Ethereum’s official web page or on our blog post about it.

Ether and Ethereum in General are disruptive technologies that are set to change how the Internet works. Whether it succeeds or not remains to be seen, but for now you can easily get your share of “the Internet’s future” by following the steps mentioned above.

If you want to learn more about Ethereum you can use the variety of social channels dedicated to the platform: Facebook, Twitter, YouTube, Reddit, StackExchange and the Etheruem blog.

Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

81 Comments

  1. Since coinbase doesn’t work with customers located in Israel. In your opinion, what is the best way to buy ETH from Israel?

  2. When you place an order to buy ETH on coinbase, are you buying at that days price or the price on the day the order shows up in your account? Price dropped $150 since order was placed so do you get “screwed” on the drop?

    • Zsofia - 99Bitcoins support on

      Hi Johnny, generally speaking you should pay the price at the time your order was placed. But I suggest you to reach out to their support team for confirmation.

  3. Hi ,

    We are planing to open coin exchange for ripple , ethereum and bitcoin in INDIA,

    Can someone suggest me how to buy ethereum and ripple in bulk from the parent organisation

      • Never try CEX.io.
        It’s a scam! I transferred money two weeks ago and still no money in my account.
        They don’t react on my issues. I think they have big internal problems.
        Read also the other forums.

      • Lol they sell for 25 more than the actual price, atm BTC is $2513 and they are selling at $2850 LOL No Thanks.

        • Ofir Beigel on

          Actually you can also use their trade option and lower their commissions substantial from what I understand.

  4. hi
    i have been trying to open a coinbase account for weeks now it has restricted my account even though the verification has been accepted it wont accept any of my accounts they are uk GBP and US dollar accounts and i am a UK citizen what is going on at coinbase they don’t answer any of the e mail requests you send and seem totally inept should i continue to try with them or change to another provider and who would you reccommend a i a beginner in this but want to buy bitcoin and ether.

    thanks

    • Thank you for the introductory. As a beginner, it seem like there’s a lot of homework to be done before really getting the cash sum into crypto-currency.
      1.Get to know your crypto currency
      2.Get to know the real dealer such as sellers, traders, Xchange or even hobbist.
      3.Get to know which wallets are suitable for what purposes

      Last not the least which still puzzle me as a question. The scenario goes like this.
      David is a expat who is working in a develop state that have facilities to transact BTC or ETHE. Meaning to say he is also holding a permanent residence ID in that develop state. The transaction all are basis on his permanent residence ID and bank account in that state during his buy/sell or even purchasing some long years contractual mining plan for BTC.

      Under circumstances, David have to give up his permanent residence ID and terminate all of his bank account as well as 2FA mobile phone verification in that develop state; in order to return to his own small town in 3rd world country.

      The 3rd world country banking system doesn’t deal with BTC or ETHE yet. Meanwhile, how would David going to be able to redeem his BTC or ETHE if the verification are mostly in the later years to come?

      • Zsofia - 99Bitcoins support on

        Hi Jeremy, this scenario depends on the infrastructure what the home town has – in case of internet connection and mobile network, there are a lot of exchanges on the market, who accepts users worldwide without the banking system with the help of anternative payment providers.

    • Zsofia - 99Bitcoins support on

      Hi Valera, comments are moderated once in every day. We do let negative comments in, your comment has been approved just now. This is not a paid post.

  5. Verification on CEX is horribly frustrating, and if you have problem then you need to speak on a live chat with bot that sends you links to FAQ. Customer service is bad considering how much money they make daily.

  6. Willy Bonty on

    Mr OFIR BIEGEL. Thank you for all your insights and advice on cryptoccurrencies. I really appreciate them. I read through your comment here and you made mention of not trusting ethereum yet o invest innit. Could you please give some professional advice on what crypto that could be a good investment?

    • Zsofia - 99Bitcoins support on

      Hi Willy, thanks for the feedback. Cryptocurrency investment is always a tricky questions, as Ofir mentioned before you definitely need to understand first what are you investing in, this is the only professional advice we can give you.

  7. Aishah Abubakar on

    Hi,
    Please i want to invest in Ethereum in Nigeria. Which wallets is supported in my Country. I noticed Coinbase is not supported for buying and selling. I will be glad if i will be guided. Thanks

  8. Meshie .U. on

    Hi OFIR, I want to know if Ether can be bought from Nigeria and how? pls, help me with any contact.
    Thanks,

    • Zsofia - 99Bitcoins support on

      Hi Shriya, setting up an exchange is a fairly difficult process, both from the technical side (website, trading engine, security) and from the legal side (local banking regulation, compliance). Probably you need a team of specialist for this.

    • Ofir Beigel on

      I agree with Zsofia, there are many things to take into account and we really can’t consult on this kind of thing.

  9. dalu kingsley on

    hi, i am from Nigeria and i visit your blog every once in awhile, going the current rate ether rate, do you still think investing/buying/selling ether is profitable?

    • Zsofia - 99Bitcoins support on

      Hi Dalu, the cryptocurrency investments is a tricky topic, you have to consider several factors, like time horizon, risk attitude, amount of money and your level of knowledger before spending money. There is no yes or no answer to this question.

  10. Ami Turgman on

    If I buy ETH on CEX.IO, is there a way to send it to my wallet somehow? I couldn’t find any way…

    • Ofir Beigel on

      Simple, I don’t understand it well enough to see its value at the moment and I don’t invest in stuff that I don’t understand. If I were to invest in Ehtereum I would first make sure that I understand what its about, how can it be put to practical use and mainly who controls what happens with the currency. The fork that ETH had a year ago really puts great concerns on its future IMO.
      To conclude, I don’t invest in coins in order to speculate, I try to understand what intrinsic value they bring to the table.

      Hope this answered your question.

  11. Hi Ofir,

    Thanks for all of the wonderful crytpocurrency information you’ve provided over the years.

    Quick question: For the coming year, I’ll be working in a DoD deployment zone, and won’t have access to a cell phone through which to receive verification codes from Gemini, Kraken, Coinbase, etc. I want to buy Ethereum and BitCoin today. What do I do?

    • Ofir Beigel on

      Hey thanks for the feedback!
      you can set up a Skype mobile number and use that perhaps? Also some of these apps have a desktop application as well. Let me know if this answers your question.

  12. J. Anthony on

    Hi Ofir,

    Thanks for all of the wonderful crytpocurrency information you’ve provided over the years.

    Quick question: For the coming year, I’ll be working in a DoD deployment zone, and won’t have access to a cell phone through which to receive verification codes from Gemini, Kraken, Coinbase, etc. I want to buy Ethereum and BitCoin today. What do I do?

    • Zsofia - 99Bitcoins support on

      Two factor authentication is an important security measure to make sure your coins are in safe. If you have internet connection, I would suggest to try to keep that and find a solution to receive the messages online.

  13. Jephin joseph on

    Hi I am from India and I want to invest in ETH . Can u tell me any platform where I can buy using Indian credit card

  14. Akshay Gupta on

    I’m from India. We have a wallet named Zebpay for Bitcoin. ETH is not available here. I have a question. Is that possible that I’ll transfer the bits from my zebpay wallet to my friend’s coinbase wallet who is located in Alabama and he can purchase the ETH from those bits? And can ETH could be directly sold and amount will be submitted to Coinbase wallet or it has to be through Bitcoin conversion?

    • Ofir Beigel on

      Hey Akshay,
      you can send your Bitcoins to Coinabse yes. ETH can be bought directly on Coinbase and it will be stored there, no need for Bitcoin conversion in the middle as far as I know. However I haven’t bought my Ethereum through Coinbase so I can’t be 100% sure about that.

      • Have you heard about issues with giving your bank account information (account#, password and pin#) when establishing coinbase accounts? I am new to this and interested in buying/trading cyber currency but skeptical of request for this info during initial coinbase account process.

        • Ofir Beigel on

          Hey Shawn,
          I guess it depends on the bank. Some banks give customers a hard time when they transfer funds to Bitcoin related companies but I can’t say as a rule that they all do.

  15. Wasn’t it the ETC camp who objected to changing the code. I thought it was the ETH camp who changed the code in order to invalidate the tokens that had been fraudulently obtained by the DAO hacker. Haven’t you got it the wrong way round in your article?

    • Ofir Beigel on

      You’re absolutely right, I got them mixed up. Changed it in the post – thanks for diverting my attention to this.

    • @Irfan
      I built a quite extensive list of ether faucets. What has to be said about these faucets is that they are all self-hosted since there is no external service like faucetbox that supports this currency yet. For many of these faucets the payout level is quite high and it takes a lot of time to be paid out. You should be able to access the list by klicking my name above this comment.

  16. I just turned all my BTC into Ether on my Eobot!! and changed all my mining settings to Ether. I could actually see a future for this, Just like how BTC was worth literally nothing. Its something worth investing on. I can’t wait to see 5 years later it being with hundreds. If you’re gonna invest INVEST NOW!!

Leave A Reply