But to delve deeper into the complex world of cryptocurrencies, we must first understand what blockchain is. To put it simply, the blockchain technology is a digital database or ledger which records or keeps track of all the transactions in the world which involve cryptocurrencies. In this way, the need for a central organization, governmental or otherwise, is eliminated, which can actively monitor and regulate all cryptocurrency transactions. The blockchain is what gives Bitcoins one of its very integral features of decentralization, which is, not being centered in the hands of a particular agency, government or organization. Now, Bitcoin is possibly one of the most important applications of the blockchain, but that doesn’t mean that it’s the only one.
Ethereum: An Introduction
Ethereum is another fantastic and upcoming application of blockchain technology that’s gaining a lot of traction in recent times. At its core, Ethereum works just like any other cryptocurrency, with tokens called Ether that can be bought or sold similar to Bitcoins. Any transaction that takes places using these Ether tokens as currency is instantly uploaded and recorded on the blockchain, eliminating the need for a banking organization which validates any such transactions. At the surface level, while Bitcoins and Ethereum share glaring similarities, there are certainly some much-emphasized differences as well. While the Bitcoin functions almost exclusively as a digital currency, Ethereum is primarily a digital platform for running applications through the use of Ether tokens, which means more the number of tokens you have, greater will be the scope of applications you can harness out of it. But how do you go about procuring these tokens? Are there exchange services that deal specifically with them? This article aims to answer all of such questions and more.
Mining for Ether?
When talking of earning new crypto-coins, a lot of people look towards mining. For the uninitiated, mining is the process of digitally excavating new coins by solving complex computational algorithms and mathematical problems. This is done with the help of complicated machinery hooked onto your computers, and those lucky enough to get to the solution first are awarded the coveted prize of a few coins. Now while this method works great for Bitcoins, it doesn’t quite hold for Ether tokens, simply because of the fact that Ethereum mining is not feasible enough because of the excessively high costs associated with it.
But the question still remains; if not through mining, then how and where can you manage to make Ethereum purchases? Here’s the list of the most productive, safest and most efficient methods of buying Ether, and how to pay for it too.
Buy Ethereum with Credit Cards or Debit Cards
Credit or debit cards can go a long way in making our everyday transactions easier and much more convenient. They eliminate the need for carrying actual cash, thereby reducing any excess baggage that we must carry to keep our cash safe. Also, they are much safer to carry than cash since even if you happen to lose your card, there’s a pretty slim chance that someone will be able to rob you of your money unless they happen to know your security pin or can breach any security protocols. With a minimal fee of around 3.5%, purchasing Ether with a credit card or debit card is one of the most viable and safest options available. Out of the many alternatives, we list out the three best Ethereum exchanges which allow a user to make purchases by selecting the credit card payment method.
Coinbase is a secure online platform which allows a user to transact in cryptocurrencies, that is, buy or sell digital coins, and even store them in safe digital vaults. Functional actively in countries like the USA, Canada, Europe, Singapore and UK, Coinbase lets you instantly buy Ethereum coins and charges a nominal fee of 3.75%. One thing to note though is that Coinbase only deals in Ether and not Ethereum Classic. To gain access to Ethereum Classis, all you have to do is purchase Bitcoins on Coinbase which can then be exchanged for Ethereum Classic on Binance.
CoinMama is a major hassle-free method of buying and selling Ethereum, mainly because it eliminates the need for verification if your transaction happens to be below the $125 upper limit. All you have to do is create an account and log in, which hardly takes up much of your time. Once you are signed in, you need to make a purchase which will then show up in your Ethereum wallet in less than twenty minutes. If there’s one thing that is wrong with the service though, it is that they charge an excessively high fee. Compared to Coinbase’s 3.75%, CoinMama charges you a whopping 7% fee on all transactions. On the upside, CoinMama supports debit cards from all countries and accepts payment from anywhere in the world. Again, similar to Coinbase, CoinMama too, deals only in Ether and not Ethereum Classic. The process for procuring Ethereum Classic actually remains the same, which is exchanging Bitcoins bought on CoinMama for Ethereum Classic on Binance.
BitPanda started out as a service that dealt exclusively with Bitcoins and their purchases. But as the business grew, the developers sought out new ways of attracting customers. One of these ways was to introduce Ether purchases. This brokering service for digital currencies is based out of Austria and enables credit card transactions for Ether. The fee is low as it should be and the transactions happen instantly without much delay. Similar to Coinbase and CoinMama, BitPanda does not sell Ethereum Classic and one must get it from Binance in exchange for Bitcoins bought on BitPanda.
Buy Ethereum Using Bank Accounts or Transfers
The second method that you must familiarize yourself with is that of direct account transfers and account payments. Safe and convenient, account transfers are great for when you choose not to carry any cash or card on your person. They have a minimum transaction fee and boast of an almost universal outreach. Almost every major corporation or online exchange service in the world support bank transfer payments, making them a great alternative to card payments.
Coinbase can be utilized as a channel for making Ethereum purchases. With a wholesome shopping experience and a transaction fee as low as 1.49%, this is another great way to fill up your Ethereum reserves. The only limitation that you’ve to face is that currently this feature can only be accessed in a limited number of countries. Only if you are a resident of USA, Canada, United Kingdom, Singapore and Europe can you fully avail the benefits of this exchange. Other than that, US users might have to go through a little more trouble because of the delayed system response of the ACH banking system. For this reason, a transaction might even take as long as 7 days for processing. Canadians, on the other hand, get to enjoy pretty rapid transactions which take anywhere between 1 to 2 days for completion. Residents of the United Kingdom, as well as Europe, can also avail the same benefits if they choose to utilize SEPA for account deposits.
Kraken is a cryptocurrency service based out of Europe and functions as one of the leading trading markets for Ethereum and Ether. If you’re a resident of Europe and are willing to buy Ether tokens, then Kraken happens to be your best bet in terms of great service and trust. Additionally, unlike a lot many other portals, Kraken also gives you the flexibility to directly purchase Ethereum Classic.
Gemini is similar to Kraken in the sense that it is also localized to a singular region. If you are a resident of the United States, New York in particular, then you’re eligible to avail the benefits of this crypto-exchange service. Make use of the ACH deposit to carry out your purchases. Additionally, Gemini now also serves regions like Canada, Japan, Hong Kong, Korea and a few European countries.
Based out of UK, CEX.io is an exchange service focused entirely on digital currencies and cryptocurrencies. It happens to be one of the most experienced and oldest cryptocurrency exchange services online and allows its customers to purchase Ether tokens through ACH if you are in America or through SEPA if you are in Europe.
Using Ethereum Wallets
Ideally, it is never safe to store your Ethereum or Ether tokens on an online exchange. They are dangerously prone to cyber attacks and there’s always the high probability of your coins being stolen away by hackers. For this very reason, we suggest that you give e-wallets a chance. These digital wallets built exclusively for Ethereum are fast, safe and secure. They have all the necessary firewalls and security protocols in place that can shield your coins from any potential breach of security.
Buy Ethereum with Bitcoins
Enough has been said already about the massive popularity and global reach of Bitcoins. Because of their ever-exceeding market value and widespread craze among the general populace, almost all cryptocurrency exchanges or transaction portals will allow you to purchase Bitcoins. The biggest reason behind this is that most of the digital currency exchanges in use today make use of the ETH/BTC pair, which means that customers can purchase Bitcoins from the exchange and then further trade the bought Bitcoins for Ethereum Classic. Portals like Binance and Changelly specifically allow customers to purchase Ethereum or Ethereum Classic with Bitcoins, or even other cryptocurrencies.
Touted as the world’s most popular and largest Bitcoin exchange, Binance serves millions of customers on a daily basis. The biggest factor that works for Binance is the ease of depositing Bitcoins and then further using those coins to purchase Ethereum or Ethereum Classic.
GDAX is highly popular in the United States and boasts of one of largest consumer bases out of all the cryptocurrency exchange services online. To easily convert your Bitcoins to Ethereum or Ethereum Classic, GDAX works like a charm. For those users who have bought their Bitcoins from either Coinbase or GDAX itself, the process is even simpler, for they won’t even be required to create a new account or register themselves, but can rather simply start trading their Bitcoins.
Buy Ethereum with Paypal
Paypal certainly does provide a way for users all over the world to purchase Ethereum or Ethereum Classic. Unfortunately, the method is not very straightforward. You will first need to purchase Bitcoins from VirWoX through Paypal. Once that is done, you can use any of the exchange services mentioned above like Binance or Changelly to exchange the BTC for Ethereum or Ether.
Buy Ethereum with Cash
There are a number of applications for Bitcoins, which is why today it is arguably the most popular cryptocurrency available in the digital market. One of the many applications it has is that of sending money internationally without incurring much of the transfer fee or extra charges. Ethereum buyers, on the other hand, are known to generally make purchases only for speculative purposes. Like the methods described above, you need to first make a Bitcoin purchase with cash. Once the purchase is completed, make use of an exchange service like Binance or Changelly to exchange your BTC for Ethereum.
Buying Ethereum FAQs
All said and done, Ethereum transactions have now become super convenient and hassle-free. Their widespread availability on a number of platforms as described above, coupled with their varied but unique brand of applications, making them a potential candidate for the next big thing to watch out for after Bitcoins in the cryptocurrency arena. This article was an attempt to guide you on the most effective and best places to buy Ethereum and what payment methods to use. On a closing note, we attempt to dispel some popular misconceptions, provide some much sought after answers and supply some useful information on the general usage, procurement, and storage of Ethereum and Ether tokens.
Right Time to Buy
Similar to other markets, the Ethereum market too is majorly unpredictable. It is almost impossible to predict the optimal time to make a purchase, which is why every transaction with Ethereum or Ether tokens is a risk in itself. You might end up making a substantial amount of money from a price hike right after you make a purchase, or may end up losing an even greater amount of money if prices crash suddenly. There are, however, certain strategies you can use to minimize your risk. One highly popular and effective technique is that of dollar cost averaging, which involves splitting your total purchase over some specific amount of time and multiple transactions such that even if the price fluctuates to some extent, the losses you suffer are minimized.
Since Ethereum is a relatively new form of cryptocurrency, especially when you compare it to Bitcoins, it is also much more volatile and unpredictable. For those interested in purchasing Ethereum, it is highly advisable to perform a bit of a background check on the currency, have a look at recent trends and research as much as possible on the viability of the currency. If after all of this extensive research, you still feel inclined towards making the purchase, only then should you go ahead and buy yourself some Ether tokens.
Excessive Purchase Times
Since Ethereum exchanges, almost all of them, are still in development and have not yet reached their full potential, they still depend on traditional banking systems to process their transactions. This dependence often leads to problems because banking systems are typically fairly slow and require extended periods of time to process simple transactions. Payments made directly from bank accounts or via credit cards often take up as long as a full week. Since an exchange cannot part with the Ether unless and until all payments are cleared and accounted for, there is often a hold up in case of Ethereum transactions.
Mining or Buying?
As stated at the beginning of the article, Ethereum mining is a rather complicated and resource consuming process. In order to obtain Ethereum or Ether tokens, it is better to simply purchase them as it is much simpler and convenient for the average consumer. Also, the amount of resources that are consumed in mining Ether far exceeds the actual output you stand to gain.
Best Payment Method
There is no single and universal best payment method when purchasing Ethereum. It is in fact largely dependent on your preferences and the kind of goals you have. For example, if you are looking for low-cost transactions, then opting for bank account payments will do you good. Similarly, if privacy happens to be your foremost concern, then perhaps you should use Bitcoins to make the purchase. Finally, for those in a bit of a hurry and looking for high-speed transactions, credit card payments are the way to go.
This is again a decision that can best be made by the user itself considering what he plans to do with his coins. If you’re planning to store them, then the best option for you is to immediately move your coins over to a secure hardware wallet such that they remain safe and locked in a vault where it is relatively much harder to steal or access them for any third parties. For a small number of coins though, an online wallet provides enough security and will do just fine.
Ethereum or Ethereum Classic?
Without going much into the details of it all, it is suffice to say that the Ethereum blockchain recently went through some changes and split into two distinct branches. While Ethereum happens to be the bigger of the two, Ethereum Classic is the smaller one with an upper limit of approximately $200 million.
Bitcoin ATM Support
A common query that often arises in the minds of investors and buyers alike is whether or not Bitcoin ATMs support Ethereum withdrawals and transactions. The answer is no. Bitcoin ATMs, at this point in time, do not support Ethereum transactions. The possible reason behind this is the fact that Ether tokens are generally not used as extensively as Bitcoins and there is no actual demand for Ether in international payments. Ether can’t even be used for online shopping or spent on e-commerce websites, which is why there is a clear absence of a need for setting up Ethereum support in Bitcoin ATMs.
Cash Purchases and their Benefits
The primary benefit which you stand to gain from cash transactions with Ethereum is privacy. Whenever you pay for a cryptocurrency like Ether or Bitcoins with cash, you get the associated advantage of staying anonymous for the purchase. Otherwise, if privacy isn’t such a big concern for you, then it is actually advisable to opt for credit card payments or bank account transfers. Doing that will allow you to access faster payments, purchase in larger amounts and even incur lesser transaction fees as compared to when you trade them for Bitcoins after buying them at an ATM.