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

Last updated on November 5th, 2017 at 12:10 pm

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 in 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 Ethereum exchanges. It’s important to make a distinction between an actual Ethereum exchanges that will sell you Ether and CFD platforms like eToro that only let you speculate on the price.

Platforms like eToro don’t give you actual access to your coins and you can’t send coins from eToro to other people. The only thing that can be done with the platform is to buy and sell Ethereum for fiat currency (i.e. Dollars, Euros, etc.)

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).

Visit 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 CEX.io can be around 7% higher than on Coinbase. 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 Ethereum on Cex.io Read our Cex.io review

 

Buy Ethereum on Cex.io

Buy Ethereum through Coinmama

Coinmama is a worldwide seller of Ethereum. The site allows you to buy Ethereum with your credit card and exchange rates are relatively fair considering the alternatives. Coinmama is a very reputable exchange that has been working in the cryptospace since 2014.

Buy Ethereum on Coinmama Read our Coinmama review

 

coinmama ethereum

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     Read our Coinhouse review

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

Buy Ethereum with Cash

At the moment there is no site like LocalBitcoins for Ethereum where you can meet people face to face and buy Ethereum with Cash. However, you can buy Bitcoins with cash and then exchange it to Ethereum through Shapeshift or Poloniex.

How to read an Ethereum transaction

Once you’ve made your purchase you’ll be able to follow your transaction through the use of an Ethereum block explorer. A full explanation of how to read an ETH transaction can be found in this guide.

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.

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123 Comments on "How to Buy Ethereum – A quick start beginner’s guide"

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Faisal
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Faisal

Hello. First of all thank you for this informative article as i am new to crypto thingy. I have recently setup a Rig through which i mine Ether. As i am located in Pakistan and i would like to add some ether to my account. will any of the above exchanges you mentioned work for me in Pakistan? I don’t own a Credit card but i have a bank account and would like to use to buy Ether.
Help me out here guys. Thanks once again.

Steven Hay
Member
Member
Steven Hay

Hey Faisal,

I suggest you check out Urdubit.com – they will let you buy Bitcoin via bank transfer in Pakistan. Once you have bitcoins you can easily exchange them for ethers from pretty much anywhere in the world, using exchanges like Changelly or Poloniex.

Faisal
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Faisal

Thanks Steven. If i buy Bitcoin and then change it to ether will that cost me some fee? And isn’t there a direct method to buy ether or ether classic? I mean BTC price is huge and i am just a student looking to invest my pocket money which i saved for a year.
thanks again.

Steven Hay
Member
Member
Steven Hay
Hi Faisal, Yes, you will incur some bank fees by making a fiat deposit on Urdubit, some exchange fees buying Bitcoin there, a withdrawal / miner fee moving the Bitcoin to the crypto exchange, another exchange fee plus the market spread in converting the Bitcoin to Ethereum, and then another mining / withdrawal fee for moving the Ethereum back to your personal wallet. Such is the cost of doing business. You may be able to avoid these fees if you find someone locally who is willing to accept PKR for Ethereum. Or you could use your saved PKR to buy… Read more »
Faisal
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Faisal

Thanks Mr. Steven for you time and reply to my questions. Well am sure looking for locally. What if i ask my brother in UK to buy them for me (he has no idea about crypto so he is a total noob in this matter). What would be the procedure then?

Thank you so much for you kind replies once again.

Steven Hay
Member
Member
Steven Hay

Hey Faisal,

It should be very easy for your brother to buy ETH in the UK using GBP. There are numerous exchanges he could use. The easiest exchange for crypto newcomers would probably be Coinbase. Other options are Bitpanda and CEX.io. Please see our article on buying ETH from exchanges for more detail:

https://99bitcoins.com/best-ethereum-exchange-review-comparison/

Ahmad
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Ahmad

Hello,
I am new to crypto-world and I would like to buy ether through any of the exchanges mentioned in the article, say coinbase. I have a bank account in Europe (Sweden) and I want to have my account based there however I live in Dubai (as far as I know, cryptocurrency is still not available here), so would that make an issue if my wallet shows IP address from Dubai while my bank account and coinbase account is in sweden?

Appreciate your help

Steven Hay
Member
Member
Steven Hay
Hey Ahmad, Yes, this certainly could lead to complications. I’ve encountered several exchanges which are pretty fussy about matching IP address with home address. You may also experience problems with the verification of your documents, unless you have a recent proof of residence from Sweden. What I suggest is using a Middle Eastern Bitcoin exchange instead. One which I believe is in fact located in Dubai is called BitOasis.net. Once you purchase Bitcoin, you can then easily exchange it for Ethereum without having to go through any significant location or document checks. A nice simple way to exchange the two… Read more »
INVESTMENT BOW
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INVESTMENT BOW

I agree about buying via smart contracts. Heard of a new ICO coming up with that called confideal. Anyone knows something? Or similar products?

Steven Hay
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Member
Steven Hay
Hi, Well, a similar product would be Ethereum. This ICO looks like Ethereum-in-Ethereum… I don’t really see the point of it. Their main value proposition seems to be making smart contracts easy for newcomers; no programming skill required… Hmm. This seems like a bad and dangerous idea. People need to understand *exactly* what’s in the contract’s code to be able to run it safely. The DAO failed and split Ethereum because its code was sloppy and no one (besides the hacker) took the time to understand it properly. If Confideal’s contract code is hidden from signers (due to their inability… Read more »
Chris
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Chris

Buying ethereum through coinbase takes weeks. It’s not exactly instant. :(

Cherry
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Cherry

Hey guys!!
I wanted to buy ethereum at coinmama, but they require the wallet to support mart contracts. my wallet does not support that. Where can I buy ethereum without smart contracts?

~~ thanks ~~

Steven Hay
Member
Member
Steven Hay

Hi Cherry,

I think the best option would be to get a new wallet which supports smart contracts. MyEtherWallet, Jaxx, Mist, Geth, Eth, and Pytheapp app all do, as far as I know. You could investigate whether it’s possible to send from one of these wallets to your regular wallet once you’ve purchased and withdrawn the ethers to whichever smart contract-supporting wallet you choose.

Daamai
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Daamai

Hello dear, Please advise how I can buy and mine ethereum in Mongolia

Zsofia Elek
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Zsofia Elek

Hi Daamai, I think Cex.io accepts users from Mongolia, you can try that to purchase Ethereum. As for mining, please refer to this article: https://99bitcoins.com/guide-ethereum-mining-how-to-mine-ethereum/

Jpy
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Jpy

So if someone is looking to buy where is a good place?
Looking at coinbase it has very very bad reviews: https://www.trustpilot.com/review/coinbase.com

Zsofia Elek
Admin
Member
Zsofia Elek

Hi Jpy, beyond Coinbase, a couple of other options are listed in this article where to buy Ethereum. You can also read our review about Coinbase here: https://99bitcoins.com/coinbase-review/

Ady
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Ady

Can you suggest some best mining rig configurations for optimum mining?

John
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John

Its worth mentioning that bitmex also offer an Ethereum CFD 7 day expiring futures contract.

Ady
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Member
Ady

I’m very new to cryptocurrency, Should I buy or start mining. If so where should I start?

Zsofia Elek
Admin
Member
Zsofia Elek

Hi Ady, here is a guide about how to mine Ethereum: https://99bitcoins.com/guide-ethereum-mining-how-to-mine-ethereum/

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