How to Buy Ethereum

Olga Shirimova
May 9, 2020
How to buy Ethereum

ETH is the cryptocurrency that makes the Ethereum-based world go round. Currently, this network is one of the most ambitious blockchain projects, therefore many investors want their crypto. If you are a beginner, use this guide to learn how to buy Ethereum. 

Why Ethereum

If you are reading this, you have probably heard that Ethereum is a massively popular blockchain innovation. This project ushers the era of dApps — decentralized apps running on smart contracts. (In case you lack understanding of smart contracts, we have a special guide for you). 

Without going into technical details, when someone speaks on how blockchain can transform different industries, they often refer to the projects based on smart contracts. ETH fuels this disruptive system.

If the network founders fulfill their promises, more people will be using this coin. Therefore, its price will increase. And no, it’s not too late to buy ETH — the currency still has the good potential to grow. 

Now, let’s see where and how you can buy Ethereum. There are several ways to do it, and we will consider each of them below.

Using an exchange is easy, but you have to do some paperwork first. Image source: Liquid

How to Buy Ethereum On Crypto Exchanges 

Register on a well-reputed crypto exchange, go through all the required procedures, and buy as many coins as you need. As ETH is second only to Bitcoin in popularity, almost every exchange deals with it. But don’t opt for the first platform that comes your way. Take some time to explore if it implements all the necessary security measures. Also, check if this exchange operates in your country. To be sure, look for the whitelist on their website.

Going forward, any respectable crypto exchange is obliged to collect their clients’ personal details. They include your name, email, citizenship, telephone number, residence address, ID document number, etc. Depending on the scope of your financial operations, it may also ask you about where this money comes from. Some users think that exchanges are too inquisitive, but all these identity checks have their benefits, too.

First, they indicate that the platform is law-abiding and complies with the KYC/AML regulations to prevent illegal financial practices like money laundering and tax evasion. Besides, knowing your customer (KYC) may be very helpful in case of an emergency. For instance, if you lose your phone, providing your ID docs will let you restore access to your account.

Most exchanges allow you to buy ETH either with digital coins or with USD, EURO, CNY, JPY, and some other popular fiat currencies. Deposit the money using the method you prefer and wait until it appears in the appropriate wallet. Now you can place a sell order, indicating the currency (ETH) and the amount you need.

For newbies, we describe the process in detail in this article, with screenshots from the Exscudo exchange. 

Exchanges to Buy ETH

Here are some big and popular platforms that could suit you:

Matamask, a desktop wallet for ETH, is famous for its user-friendliness. 

How to Buy Ethereum Using Wallets 

Another popular method to buy Ethereum is to use an ETH wallet. Before you opt for it, you’d better explore the topic. You should know the main types of crypto wallets and understand how they are different in design and purpose.

In short, these wallets can be either hot or cold. These two broad types fall into several categories with their advantages and disadvantages. Without going into detail, if you seek to buy or sell ETH, a desktop, a mobile or an online wallet is a must-have. Going to hold big amounts of ETH? Get yourself a hardware wallet.

Also, a user should understand how crypto wallets function. Get familiar with the concepts of private and public keys and learn the meaning of terms like ‘2AF’ and ‘strong password’.

It’s important: many people lost and never recovered their funds just because they ignored these essentials. A crypto wallet may look similar to your banking app, but there’s no banking office to call to in case you’ve forgotten or lost your private key. No central authority stores (and restores) you sensitive data.

Once you have chosen a hot wallet and made all the settings, you can deal with the Ethereum cryptocurrency. To make things easier, feel free to use our list of 5 top ETH wallets as a guide. 

For a peer-to-peer deal, use a special marketplace. Image source: LocalCryptos

How to Buy Ethereum Using Cash 

It’s possible to buy digital ETH with hard cash, too. Why would you do it in the first place? Normally, for one of these two reasons:

  • You don’t feel like sharing your personal details with an exchange. 
  • You are unwilling to pass the KYC procedure as it takes time and involves some paperwork.

    Warning: this method may be dubious in terms of the law, depending on your jurisdiction. Nevertheless, it’s still available.

Enter the details and get a list of sellers on a website. Image source: LocalCryptos

P2P Marketplaces: Money Transfer

To buy ETH from another user (peer), go to a special platform like LocalCryptos. It matches sellers with buyers and resembles a traditional marketplace. You place an offer (say, $600 for 3 ETH) and wait until some user accepts it. The available transfer methods include PayPal, credit card, wire transfer, and some others. The marketplace charges a 1% fee which is split between a buyer (0.25%) and a seller (0.75%). Note that such a transaction may take hours to process. However, impatient users can always speed things up by offering a higher-than-average fee to miners.

An example of a popular user with a good reputation.

P2P Marketplaces: Personal Meetings

Through the LocalCryptos chat, make an offline appointment with the seller you have selected. Wait until they send their ETH to your address and then hand them your cash. Ideally, everyone is happy.

What’s the catch? It’s totally your responsibility to decide if this particular user is trustworthy and safe to meet with. So, after you receive an offer from someone, see their profile, history, and reviews. If you feel there’s something wrong, don’t mess with them — it could be dangerous.

A meeting should take place on neutral ground, with many people present. Never agree to meet in their apartment or in the middle of nowhere. If possible, invite a couple of friends to accompany you. Unfortunately, crypto owners are often seen as rich people and as such may attract the attention of criminals. Also, a person with a load of cash who seeks an anonymous trade is an easy victim.

A malicious seller is likely to escape at this point, but a decent person will find your conditions reasonable. Now you can negotiate the price. The biggest advantage of P2P marketplaces is that they have no fixed rates. If all goes well, the parties can come to a mutually beneficial agreement.

Other Options

You can always buy ETH from a friend, a relative, or any other person you trust without any paid intermediaries involved. Another method is to attend an Ethereum-themed meeting and trade fiat for crypto with local enthusiasts. To know where and when these meetings take place, get involved with the official community.

Using an ETH ATM  somewhere in Malaysia. Image source: Medium

How to Buy Ethereum Using ATMs 

Finally, there are ETH ATMs to solve your problem. It’s a perfect solution if you want to purchase a small amount of ETH. In this case, creating an exchange account and passing through all the identity verification procedures makes no sense.

The process is similar to using a regular ATM:

  • Get yourself an ETH wallet.
  • Use a special online service to locate a suitable ATM. Make sure it works with ETH.
  • Enter your wallet, find a QR code there, and let the ATM read it.
  • Enter the amount of ETH you want.
  • Put your cash into the machine.
  • Confirm the operation and wait until the ethers you bought arrive at your wallet. 

Normally, the money will appear there within half an hour. If the network is very busy, you may have to wait for a few hours.

Ethereum: paper wallet with a private key and public address. Image source: CryptoMining Blog

How to Buy Ethereum: Useful Tips 

Here are a few important things to remember:

  • Before buying the coin, learn about how crypto works. Get familiar with the main principles to understand in what way it is different from traditional money. It will help you avoid many mistakes, typical for beginners.
  • Get yourself a suitable ETH wallet, as it will be necessary in any case.
  • Creating an account on a law-abiding and secure exchange is one of the best legal ways to buy ETH. Especially if you are going to manage big amounts.
  • For more anonymity and negotiable conditions, use a P2P marketplace, but be aware that such platforms operate in a grey zone. Thus, you run additional risks, especially if you prefer to exchange money at a personal meeting.
  • To buy a small amount of ETH for hard cash, look for an ATM.
  • Finally, you can trade ETH with people you trust and save money on fees.

As you see, buying Ethereum is not rocket science. Hopefully, this article helped you to understand it.

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