Ethereum is a decentralized software platform and blockchain that runs smart contracts and enables others to build decentralized applications (DApps). The Ethereum Virtual Machine, which consists of hundreds of computer nodes running the Ethereum software across the globe, enables these specific types of contracts. DApps such as exchanges or liquidity pools may be built and run without any control, fraud, or interference from a third party entity.
Ethereum has historically enabled startup teams to built on top of the Ethereum blockchain. Since 2017, when the ICO boom began, and since 2020 when DeFi and NFT technologies became popular, it has certainly been the place where the most people are building in crypto.
All transactions within the Ethereum ecosystem require transactions fees which are paid in $ETH, otherwise known as Ether. So if you:
- Are a crypto enthusiast ready to try out cutting edge platforms and tools, or;
- You love trading and investing and know that ETH is a highly liquid asset, or;
- You’ve decided to mint, trade or buy NFTS, or;
- You can’t get enough of DeFi, yield farming and liquidity pools.
Then you’re going to want and need some ETH. Here’s how to go about obtaining this extremely popular cryptocurrency:
How to purchase Ethereum
It is important to note that the process of buying Ether will often vary from one exchange to another. Having said that, though, the principles are very much the same in the grand scheme of things.
These are the most basic steps that need to be taken if you wish to purchase Ether:
- Register at a centralized exchange such as Binance, Coinbase or Gemini.
This registration process will usually require you to submit a few general pieces of personal details.
- Complete the identity checks
Full identity checks are included in the process, especially when it comes to conducting a deposit or withdrawal to or from a bank. In order to properly pass these checks, you will most likely need to provide a ‘proof of address’ as well as a piece of photo identification. These are carried out with Anti-Money Laundering (AML) regulations and ‘Know Your Customer’ (KYC) protocols.
To learn more about KYC, read one of my previous articles, entitled “What is KYC?”
- Choose a method of deposit
Depending on which exchange you choose to participate in, there are various types of banking procedures. These are frequently a mixture of bank wire transfers, credit and debit card payments, SEPA (Single Euro Payments Area), PayPal, or Skrill payments, among many other methods. There will typically be a small fee for each deposit method that is charged by an exchange.
- Make a deposit in US Dollars, Euros, etc.
A majority of exchanges will accept US Dollars and Euros. Other major fiat currencies like British Pound Sterling, Russian Ruble, Chinese Yuan, Japanese Yen, and more are accepted on some of the exchanges as well. Each exchange will typically charge a fee for each deposit method and it will usually take at least several hours for your deposited funds to eventually appear in your exchange account; again, this all depends on the exchange and the chosen method of deposit. Some exchanges may also required that you hold the fiat funds in your account for a number of days before being able to trade them or make withdrawals.
- Purchase ETH with your deposited funds
As soon as your fiat currency has arrived into your exchange account, you can now use this currency to buy Ether. The level of user-friendliness associated with this process will vary depending on which exchange you are participating in, with a good number of them striving to make this particular process as easy as possible. Once you have acquired Ether, it is highly recommended that you withdraw it into a specified wallet of your choosing.
What if I don’t have a bank account?
If you live in a country where banking is either restricted or inaccessible, then purchasing Ether with cash might be the best route for you to take.
Fortunately, there exists a decentralized marketplace where buying Ether with cash is possible: LocalEthereum.com. This is an anonymous platform where users are able to buy and sell Ethereum by using various types of payment methods, and that includes cash. Those who are selling are verified by phone and email, and those who are buying are able to rate the seller on each trade. This helps to build a trusted profile for any future buyers that may show interest.
There are some who would prefer a more ‘peer to peer’ route when it comes to buying Ether, avoiding KYC and AML and in some instances, purchasing larger quantities. While this activity may be frowned upon – at least depending on your country’s regulators – it is possible to do so through an online peer-to-peer exchange like the aforementioned LocalEthereum.com.
Now that you understand the steps that need to be taken, you can begin the process of purchasing Ether for yourself. Additional research into the subject would certainly be beneficial, but this article is a strong start to the overall procedure. Next up, you can read about cryptocurrency wallets to learn about securing and accessing your crypto assets.