Ethereum is an open-source, blockchain technology-based decentralized platform that runs smart contracts. This distributed public network allows you to create decentralized apps and use the network, as long as you own Ether. Ether is its native cryptocurrency that makes all operations possible within the blockchain. This way, it can be said that Ethereum works as an ideal blockchain solution for all. It is indeed a decentralized world computer that revolutionizes the traditional way of withdrawing and depositing funds.
You can easily buy Ethereum at any of the Ethereum exchanges. Once you have bought Ether for fiat currency (USD, EUR, GBP etc), you can easily store the funds on the exchange or in your own secure wallet. For small purchases of Ethereum, you can store your crypto on the exchange. For larger purchases, the funds can be moved into a secure wallet.
How to buy Ethereum from an exchange?
Buying Ethereum through an exchange is not difficult. All you need is to create a new account by registering yourself with an exchange by submitting the required details and depositing fiat currencies such as US dollars, Euros etc. and then buy Ether through the platform.
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Buy Ether in a few easy steps
The process of purchasing Ether differs from exchange to exchange; however, each exchange follows the same principles. If it is your first time buying a cryptocurrency through an exchange, you need not worry, as various exchange platforms now have made it as hassle-free as transferring a single online payment.
Some of the key steps that you need to accomplish before buying any crypto are as following:
Register at an exchange
Register yourself with the website of the exchange you have chosen. Here you will be required to provide your personal details. Full identity checks are generally subsequently added in the process when a withdrawal or deposit is conducted.
Complete KYC/identity checks
Get your KYC/identity checks completed through the exchange before depositing or withdrawing your funds on an exchange. Every exchange conducts “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks before and after deposits as well as withdrawals of funds. You will be required to submit the necessary proof of address and photo identification before the exchange can proceed.
Select a deposit method
Remember, each Ethereum exchange has its own banking methods, including bank wire transfers, SEPA, credit/debit card or PayPal payments. Besides, to use any exchange, you will be required to pay a small fee for every deposit and withdrawal you make through that exchange. You can learn about all the fee details in the footer of the exchange’s website.
Make a deposit in fiat currencies such as US dollars, Euros etc.
It takes more than 24 hours for a deposit to appear in your exchange account. Deposit times differ from one exchange to another and the method of deposit you have chosen.
Ethereum – from an investment perspective
Ethereum works like a ledger that records a history of all transactions. All these transactions are protected by a distributed network of machines, each functioning to process and validate transactions. Ether is issued to those machines that conduct this function. Ether or Ethereum is easy to trade for fiat currencies such as US dollars or Euros. There are thousands of participants connected to this network. None of these participants need intermediaries to perform their transaction activities worldwide.
It is noteworthy that transactions conducted on Ethereum are immutable, meaning they are final and cannot be deleted. If in the case of an invalid transaction, (for instance, you don’t have sufficient funds in your wallet,) then the transaction will not be added to the blockchain. The whole data of all legitimate transactions gets hoarded by several different machines in thousands of physical locations, each copy is similar to the other. The blockchain is a global agreement of the history of every transaction ever made. Thanks to this distributed nature of the Ethereum blockchain (ICOs like BunnyToken, Seal, Streamity), there is no central point of failure and thus only slight chance of it failing.
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How to buy Ether anonymously?
Some may prefer going with the “peer-to-peer” route of buying Ethereum, escaping KYC and AML and in several cases, buying larger quantities. Whilst your country’s regulators may frown upon this activity, you can still make it possible through an online peer-to-peer exchange. Note that the risks in this procedure are all yours.
Before going along this route, you first need to purchase Bitcoin that can thereafter be exchanged for Ether. To set up a Bitcoin wallet, you need to follow the same process as you do for Ethereum. You can find a list of trusted wallets on Bitcoin.org.
When you are done with the Bitcoin registration process, you can exchange the crypto-asset for Ether anonymously. However, to make this transaction possible, you must conduct the transaction of a maximum amount (usually a few thousand dollars in value).
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An Ethereum wallet is a kind of software, which is specifically designed to store your Ether funds. There are several types of Ethereum wallets available today such as desktop application, mobile/web app, a hardware/paper wallet or an online exchange. If interested, you can visit myetherwallet.com to download the Ethereum wallet.
Now the point is whether you want to use a so-called ‘full node’ wallet, for which you will be required to download the entire Ethereum blockchain (many gigabytes in size) or a ‘light client,’ for which you don’t need a full blockchain. For new Ethereum users, the light client is an ideal option. MyEtherWallet offers light client wallets, and Jaxx.io supports light client as well as other crypto-assets.
However, if you are purchasing your Ether from an exchange, then the easiest option is to use a wallet offered by the platform. However, be aware that using such wallet may not be secure enough when it comes to storing your funds. Unfortunately, a number of existing exchanges in today’s crypto world are not immune from hacker attacks. If users’ wallets are hacked, an exchange will not be able to refund the lost amount to customers.
Your tokens will be extremely secure if you use a desktop, mobile, or online wallet. This is because these wallets allow users to have full control over their funds. However, if you take certain precautionary security measures, you can stop malicious attacks and rest assured that your funds are in safe places. One of the most important steps that you can take to secure your funds in a wallet is to keep your wallet’s password, aka ‘private key,’ confidential. If you forget or lose it, you will lose accessibility to your wallet forever, and whatever funds you had stored in the wallet will be finally lost.
Finally, yet importantly, you can also choose to set up a two-factor authentication to have access to your wallet.
What is a private key?
The private key is the password to your wallet. It is the most confidential private key without which you will not able to access your funds stored in your wallet. Dissimilar to other keys, this key (password) is generated offline by your wallet. Since this key (password) is never transferred to a server, it cannot be intercepted. When you generate a wallet, you are required to take a copy of your private key and store a backup of your private key in a safe, easily accessible place.
Remember, if you lose your private keys, you will not be able to have further access to your wallet.
So, it depends on how and where you want to store as well as backup your private key.
There are users who opt for a secure cloud storage with a 2-factor authentication, while others prefer taking offline prints of their private key. For huge amounts of Ethereum, you can use “hardware wallets” to provide extra security measures to your funds.
Hardware wallet vs. online wallet
If you want to store huge amounts of Ether, you can go the extra mile by investing in a hardware wallet. Such devices do not hook up to the Internet; they are able to create and store your private key offline. This helps in mitigating the possibility of digital theft. The device also provides a recovery password when a wallet is created. You can also use a PIN code to access the device.
In addition to your wallet’s password, your Ethereum wallet also generates many receiving addresses, also known as ‘public keys.’ You can safely distribute these addresses without the risk of theft. People interested in sending you some Ether can make use of such addresses to do so.
An Ethereum transaction takes 20 seconds to go through. Once it is done, it indicates that the transaction was considered legitimate and was included on the blockchain, where it can be viewed by anyone.
Ethereum ATM is an alternative way to buy Ether. Whether you are a user, trader, or investor looking to buy small amounts, an ATM works well when it comes to buying Ether. The large number of cryptocurrency ATMs allow for relatively small amounts of transactions, thus completely escaping the need for complying with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and mitigating the need for identity verification. However, before you start using a cryptocurrency ATM, you first need to have a wallet. As soon as you have created a wallet, you will then have to find your nearest ATM that allows for Ether transactions.
To know more about a comprehensive list along with a map of cryptocurrency ATMs, you can visit CoinATMRadar. While this service is primarily focused around Bitcoin ATMs, you can make use of a search bar available on the map to locate local ATMs and start trading in Ether and other leading cryptocurrencies.
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When you have successfully located your nearest ATM, you will need to locate a QR-code in your wallet. Now hold that code up to the machine’s camera so it can be scanned by the machine. Thereafter, insert your cash into the ATM and confirm the amount of Ether to complete your purchase. The Ether you bought will be transferred to the given address. Normally, it takes around 30 minutes for a transaction to complete, but in some cases, this type of transaction can take a bit longer.