What is Ethereum? 5 Recommended Exchanges where you can buy Ethereum

There are relatively few steps that you should follow if you are seriously planning on buying the second-largest cryptocurrency, but do you really understand it?

Many doubted the viability of using cryptocurrencies for transactions. During the pioneering years, most cryptocurrencies were touted as scams and were seen as things that wouldn’t succeed. But fast forward to the current time, cryptocurrencies are gaining more popularity and acceptance. Though relatively risky, many saw the plethora of opportunities cryptocurrencies provide that led to the skyrocketing of its price, popularity, and overall acceptance. Sure, there are still those who shut themselves from this due to its inherent volatility, but some embrace it rather tightly.

When people hear the word cryptocurrency, maybe the first thing they would think is Bitcoin. Still, Bitcoin is not the only cryptocurrency in the world. Out there, many cryptocurrencies are also gaining traction, and there are many to follow. One of the cryptocurrencies that gained popularity and is still gaining “followers” is Ethereum.

Ethereum is one of the widely talked about cryptocurrencies, and that might have picked your interest. But before committing to any purchase, it is better to have an understanding of the asset. And if you are serious about investing in it then, we will provide you with simple steps on how you can acquire it.

What is cryptocurrency?

Cryptocurrency, or crypto for short, involves currencies that exist digitally. It often has no physical form, and no central authority issues it. These currencies are then used to buy goods and services. Cryptocurrency is known for its inherent volatility.

Cryptocurrencies use online ledgers that have impeccable cryptography to maintain the security and safety of online transactions. Many applaud this technological security, and it is one of its selling points. But aside from security, the reason why cryptocurrencies work is because of the things called blockchains. Blockchain is a decentralized technology that handles, manages, and records transactions across numerous computers.

One example of blockchain is Ethereum.

What is Ethereum?

Ethereum is a blockchain technology that is home to digital money, global financial transactions (payments), applications, and others. Like the others, Ethereum is decentralized blockchain technology. Still, unlike other cryptocurrencies, it is an open-source operating system and doubles as a computing platform as well. It also has smart contract functionality. The coin associated with Ethereum is Ether.

What Is Ether?

Ether is the Ethereum blockchain token. It is the native coin of Ethereum and is one of the world’s top three cryptocurrencies. Ethereum has one of the biggest market capitalizations, next only to Bitcoin. But despite the smaller market capitalization, Ethereum is more favored and is the most widely- used blockchain among cryptocurrencies.    

What is the worth of Ethereum?

Same with the other, the value of Ethereum is continuously fluctuating. Ethereum was launched in 2015. During its launch, it has an initial value of $1, and after that, it saw its value rise and then plummet. After its launch, the price of Ethereum stayed at $1, and then it is a cycle of ups and downs. It crossed the$1000 mark on January 18 with a price of $1 358 before plummeting again, the same with other cryptocurrencies. It once again crossed the mark in January 2021. As of August 19, 2021, it is trading at a price of around $3000. As of this writing, the circulating supply of tokens is at around 117 million. 


What gives value to Ethereum?

If you want Ethereum, then you need to convert your money into Ether. To use the Ethereum blockchain for your transactions, you need to use Ether to pay. Aside from this, you can use the Ethereum blockchain to run decentralized applications. Decentralized applications are applications that erase the middleman from the equation. For most of the time, middlemen are always part of industries, which is what the decentralized apps are trying to change; instead of relying on middlemen, decentralized apps use “smart contracts” that run from Ethereum. And to use these applications, you need to use Ether to pay for the “gas,” which is a measurement of the required computing power to run the decentralized app.

How can I buy Ethereum?

Regardless of whether you are a beginner or a seasoned investor, choosing Ethereum as one of your investments might pay off. Ethereum still has some risks for being a cryptocurrency. Still, many see that the Ethereum Network has a lot of possible opportunities and developments. Some even see it as a more promising investment than Bitcoin. Many companies and institutions are using and backing Ethereum, even those listed in Fortune 500. Because of these, many investors, just like you, are adding Ethereum to their portfolios.

So, here are the simple steps that will guide you on how you can get your hands on in this investment to include it in your portfolio:

1.      Identify your trading platform

To acquire and buy Ethereum, you need to choose the best trading platform that would suit your needs, financial ability, and financial goals. Though you only want to buy Ethereum, it is better to look at these qualities and features as well, as it might help you in the long run since it is not as if you will just forever park it. Some platforms have better perks than others, and you should pick a platform with better features and has a low price.


There are very few options when dealing with cryptocurrencies, and not all of them are offering Ethereum. But there are still many platforms that offer Ethereum since it is one of the three largest cryptocurrencies. Some of the cryptocurrency platforms you can pick are Binance, Kraken, Coinbase, Robinhood, Gemini, and many more.


When choosing your platform, be sure to check the type of exchange they allow, whether it enables fiat exchanges or cryptocurrency to cryptocurrency exchanges.


2.      Create your Account

Once you picked your trading platform where you will buy Ethereum, your next move is to open an account. Most if not all platforms allow investors to open an account online. Opening an account for cryptocurrency is not that different from opening a brokerage account. Like a brokerage account, you need to fill up an application form when opening an account for cryptocurrency. Personal information like name, address, social security number, any government-issued ID for identification are the things you have to provide.


Your account set-up will only be complete after further verification, which only takes a few hours or a day or two. When verifying your account, you must upload some documents to verify your identity and make sure that the account satisfies regulatory requirements.


3.      Deposit Fund

After opening an account, you need to fund it through depositing currency. Depositing for those platforms that do fiat to cryptocurrency exchange is easy. You just have to add money through your bank account. Most exchanges have a very low minimum, but they charge for every trade, so better trade large amounts.


On the other hand, depositing in platforms that do cryptocurrency-cryptocurrency exchanges could be a little bit complicated. This exchange requires you to send cryptocurrency by code. Depositing using codes takes more time compared to transfers in cryptocurrency-fiat platforms.


4.      Start Trading

Once your account is funded, you can already start trading. Through the exchange, purchase Ethereum and another cryptocurrency that you desire. Each platform has a different interface, so make sure to confirm your transactions and allow enough time for processing. Processing time is dependent on the requested number of transactions.


5.      Withdraw

After purchasing ETH, you can hold or withdraw it through a bank account or ETH wallet. If you bought Ethereum in a fiat exchange, then withdrawing it is easy. You can just sell it on the platform and then send your proceeds to your bank account. If you have a wallet, then you can hold the digital currency there. For cryptocurrency-cryptocurrency platforms, you need to code transfer your Ethereum to fiat exchange and then sell it.  Only after that can you send your money to your bank account. Platforms also have an option where you can withdraw your Ethereum to your wallet.


5 Recommended Exchanges where you can buy Ethereum

1.      1. Coinbase

Buy Options:   

Bank transfer, credit card

Fees:

$0.99 to $2.99 (Coinbase), Up to 0.50% (Coinbase Pro)

Wallet Included:

Yes

2.       2. Kraken

Buy Options:   

Bank transfer

Fees:

0% to 0.26% of the total cost (value) of your order

Wallet Included:

Provides corporate wallet for safekeeping but not personal wallet service

3.      3. Robinhood

Buy Options:   

Bank transfer, credit card

Fees:

No commissions, but pay an order flow fee that varies by trade

Wallet Included:

No


4.      4. Voyager

Buy Options:   

Bank transfer

Fees:

0% (earns money by saving you money through beating the quoted price)

Wallet Included:

Yes


5.      5. Gemini

Buy Options:   

Bank transfer

Fees:

0% - 1%

Wallet Included:

Yes

Tips when choosing an exchange for buying Ethereum

Cryptocurrencies are highly unregulated, which means while the opportunities are a lot, the risks are equally big. So, aside from fees and features, you also need to check the credibility of the exchange you want to choose.

In choosing your exchange where you will buy Ethereum consider the following:

  1. 1.      Research if they have a license
  2. 2.      Look for reviews about their security
  3. 3.      Know the names and background of its executives
  4. 4.      Search of any issues about the exchange (security breach, hacking, etc.)
  5. 5.      Look to how they handle funds (security)