How to Buy EthereumLast Updated November 13, 2017
Purchasing Ethereum can be done easily at any of the Ethereum exchanges below. Once Ether has been purchased for fiat currency (USD, EUR, GBP etc), the funds can be stored on the exchange itself or in your own secure wallet. For small purchases of Ethereum, users may wish to store their crypto on the exchange for ease-of-use. For larger purchases it is recommended that the funds are moved into a secure wallet. Alternatively, investors can trade Ethereum without having to buy and secure the currency through a CFD trading platform such as eToro.
Purchasing Ethereum from an exchange
This section will expand over time and many other exchanges are also available. The Ethereum exchanges listed below all have a strong industry reputation and have operated successfully for many years.
The process of purchasing Ethereum through an exchange is simple. Register an account with an exchange below, deposit US dollars, Euros etc and purchase Ether through the platform.
eToro is authorised and regulated by the UK's Financial Conduct Authority (FCA)
eToro provides CFD trading which allows users to trade on the price of Ethereum without needing to purchase and secure the cryptoasset. eToro is a social investing platform available to traders in Europe. The company has placed an emphasis on cryptocurrency trading.
By signing up to Coinbase.com through this link you help to support EthereumPrice.org and will receive $10 worth of Bitcoin on your first deposit (over $100).
Coinbase is recognized as one of the most popular exchanges for users to buy and sell Ethereum. The exchange is open to many countries in Europe as well as the United Kingdom and USA. Residents in Australia are able to purchase Ether at Coinbase, but another exchange must be used to sell the cryptoasset for AUD.
localethereum is an anonymous marketplace for buyers and sellers of Ether powered by smart contracts. Launched on October 20th 2017, localethereum is a new but popular place to purchase Ether from anywhere in the world.
GDAX is a trading platform provided by Coinbase
If you would prefer to just speculate on the price of Ether without purchasing the cryptoasset (and thus not requiring any of the associated security precautions), see this section on CFD trading for Ethereum.
Buy Ether in a few simple steps
The process of buying Ether will vary from exchange to exchange, however the principles are very much the same. Those new to currency purchases need not be alarmed, many exchange platforms make it as easy as sending a single online payment.
- Register at an exchange
- Complete KYC/identity checks
- Choose a deposit method
- Make a deposit in US dollars, Euros etc
- Buy Ether with your deposited funds
Register at your chosen exchange by submitting a few personal details. Full identity checks are often included later in the process when a deposit or withdrawal is made.
Before/after depositing, or prior to withdrawal, exchanges must carry out “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks. Exchanges will require proof of address and photo identification to proceed.
Each Ethereum exchange will offer their own banking methods. These are often a mix of bank wire transfers, SEPA, credit/debit card or PayPal payments. Each exchange will typically charge a fee for each deposit method; fee details are usually found in the footer of the exchange’s website.
Deposits will take from as little as 24 hours to several days to arrive in your exchange account. Deposit times will vary from exchange to exchange and the deposit method chosen.
Once your fiat currency has arrived in your exchange account, you can use this currency to purchase Ether. Beginner friendly platforms such as Coinbase have made this process very simple. Exchanges which make purchases easy have been marked above with a tick symbol under “Beginner Friendly”.
For an indepth guide to Ethereum as well as information on securing Ether, use the navigation below.
This page will take 30 minutes to digest, but if you are serious about investing in Ethereum then it is worth spending the time to fully understand it. Use the navigation below to skip to any section:
- An Intro to Ethereum Investment
- Quick Start: Buy Ethereum
- Why is Ethereum valuable?
- Why invest in Ethereum?
- Is it too late to buy Ethereum?
- Trading Ethereum
- Ethereum wallets
- Transacting Ethereum safely
- Securing Ethereum – the easy way
- Securing Ethereum – the hard way
- Additional security measures you can take
How to Buy Ethereum: An Intro to Ethereum Investment
Ethereum is a blockchain – a ledger containing a history of all transactions – that is secured by a distributed network of machines, each working to process and validate transactions. Ether, the currency of the Ethereum blockchain, is issued to those machines that carry out this work, and Ether can then be traded easily for fiat currencies like US dollars or Euros. This network now has many thousands of participants who are able to transact with anyone in the world without middlemen.
Transactions on Ethereum are final and immutable. If a transaction is invalid (for example, the user does not have enough funds), then the transaction is not included in the blockchain. The entire history of all valid transactions is stored by many different machines in thousands of physical locations, each copy being identical to the other. The blockchain is a global agreement of the history of every transaction ever made. Due to this distributed nature of the Ethereum blockchain, there is no central point of failure and no possibility of being shut down.
The Ethereum blockchain was launched in July 2015 with a price of less than a dollar and climbed slowly until March 2017 when the cryptoasset experienced an enormous surge in price. This guide to buying Ethereum will explain why Ether has value, whether the currency is a good investment, and what risks and considerations should be taken into account when looking to buy Ether.
To first understand Ethereum’s value proposition, and whether you as an investor should consider purchasing Ether, it is best to consider the unique benefits that cryptoassets offer and why they attract the attention of such a broad range of investors, from VCs through to retail.
Purchasing Ether anonymously
Some may prefer a “peer to peer” route to purchasing Ethereum, avoiding KYC and AML and in many cases, purchasing larger quantities. Whilst this activity may be frowned upon by your country’s regulators, it is possible to do so – at your own risk – through an online peer to peer exchange like LocalBitcoins.com
This route first requires the purchase of Bitcoin, which is then exchanged for Ether. Setting up a Bitcoin wallet is much the same as the process above, and a list of trusted wallets can be found on Bitcoin.org.
Bitcoin can then be exchanged for Ether anonymously through ShapeShift.io. However each transaction is limited to a maximum amount (typically a few thousand dollars in value).
Before discussing Ethereum as an alternative investment vehicle and its many benefits, risks and rewards, it is best to list a handful of definitions which should help make this article easier to follow.
- Fiat currency
- Market cap
- Smart contracts
- Ethereum Virtual Machine (EVM)
- Ethereum node
- Ethereum miner
General term for any asset secured by cryptography, predominantly blockchain-based assets like Ethereum and Bitcoin.
Legal tender such as US dollars, Euros or British Pounds.
Is the total value of coin supply multiplied by the price per coin. A general term used to roughly quantify the value of an entire network.
A platform used to buy and sell cryptoassets.
An immutable set of instructions (written in code) that execute autonomously. An example would be a flight insurance smart contract; this would automatically release funds to relevant parties based on whether a flight was delayed using trusted 3rd party flight data as the “truthsayer” or “oracle”.
A term for the Ethereum blockchain, specifically referencing its computational ability and use of smart contracts.
A machine with a complete copy of the Ethereum blockchain. The Ethereum network consists of many thousands of nodes, each verifying every transactions in the blockchain.
A machine that bundles transactions into “blocks” and adds them to the blockchain. Blocks are added to the chain when the miner is able to successfully complete a difficult computational problem.
Why is Ethereum valuable?
Unlike other assets, Ethereum is not backed by gold or promised by government. To understand whether Ethereum is worth buying, it is first best to examine the fundamental value of the Ethereum blockchain itself. For the sake of simplicity, this section will look at the Ethereum blockchain only.
Mathematics and scarcity
The Ethereum blockchain is a protocol that operates on the laws of mathematics. Unlike a central bank or government, who can quickly and unexpectedly adjust money supply, Ethereum’s coin distribution is written into immutable code that is publicly available and agreed by consensus. It is the blockchain’s unbreakable encryption and mathematical truths which back this digital asset, as opposed to gold or government promise.
Ethereum is an inflationary currency; 5 new Ether coins enter the system whenever the next valid block in the blockchain is found (a block is found roughly every 15 seconds). The process of finding blocks is a separate topic, but the key point is that – unlike Bitcoin, whose supply is capped at 21 million coins – there is no limit on the amount of Ether that will be issued over time. However, this rate of inflation will decrease over time as the aforementioned issuance of 5 Ether becomes a smaller percentage of the overall coin supply. Furthermore, planned network changes (which must be agreed by consensus), due to be launched in the coming months, will place downward pressure on the inflation rate as discussed here.
Transactions on the Ethereum blockchain are valid based on a few factors, but the most obvious is that the user must have a balance greater than the amount they are sending. The purpose for which they are sending or receiving coins is irrelevant. Any user of the Ethereum blockchain – regardless of location – is able to decide how to spend their value without authorization. Having sovereignty over one’s wealth may seem unnecessary for many in the West, however those from developing nations, or countries experiencing hyper inflation and money controls, stand to benefit enormously by untethering from their fiat currency system. Unlike the traditional fiat system, Ethereum offers users full sovereignty if they wish. Of course users can choose to trust 3rd parties if they would like to, but that is not a requirement as it is in the traditional banking space today.
Ethereum transactions are low cost and fast, capable of handling 15 transactions per second with protocol upgrades in the next 12 months that are anticipated to increase this figure to 1000+. To put that into perspective, VISA handles an estimated average of 2,000 transactions per second. Furthermore, 3rd party payment channels are being developed which will take transactions off of the Ethereum blockchain without compromising security and reducing fees further – increasing the capacity of the network by several orders of magnitude.
Ether has real-world value that is in demand. Major Ethereum exchanges will complete large million dollar sell orders within seconds without moving the price. Liquidity could certainly be higher, and brief “flash crashes” have been noted in the past, however for the vast majority of users and investors, Ethereum’s liquidity allows for fast exchange to and from fiat currency.
Ethereum Virtual Machine (EVM)
Up until now this article has focused on the fundamentals of the Ethereum blockchain and its use case as a currency for transacting value. Ether serves well as a currency, however it is the ability to deploy “smart contracts” on the EVM which furthers its case as an alternative investment. Smart contracts are still in their infancy, however a number of industries are on the cusp of major disruption thanks to this technology:
- Prediction markets
Much like gold, Ethereum and others are being used as a hedge against economic uncertainty. However unlike gold, Ether can also be transacted globally and near-instantaneously through the internet with minimal fees and unlimited amounts. The supply of Ethereum is also transparent and predictable through its open source code which is publicly auditable. In the case of gold, supply shocks are not uncommon.
Why invest in Ethereum?
There are several reasons why a user might choose to buy or invest in Ethereum, here a handful of examples.
Buying Ethereum as an investment
- Accessing token sales and other blockchain investments
- Hedging against the incumbent fiat system
- Diversifying a traditional portfolio
Buying Ethereum for use
- Interacting with blockchain-based IoT devices
- Using smart contracts and the EVM
- Paying wages internationally
What investment strategy?
Investment strategies vary, and suitability is subject to your own personal risk tolerance. This guide is for information purposes only, and if in any doubt consult a financial adviser.
Buy and hold
One of the most common investment strategies for Ethereum is “buy and hold”. If Ethereum is to replace even a fraction of fiat currency, its value will be far greater than it is today. The same can be said if Ethereum becomes the currency of choice for the “machine payable web” which will enable billions of devices to transact value efficiently with each other.
Given the volatility of Ethereum, those looking to buy may want to consider “dollar cost averaging”; spending the total investment amount in chunks over X period of time to acquire Ether at an averaged price.
Buy and diversify
It is safe to say that predicting the future of Ethereum is much like predicting the weather in 5 years time. It is unlikely that Ethereum will disappear anytime soon, but as Ethereum has shown Bitcoin, it is possible for a little-known cryptoasset to become a dominant force in a short period of time. Purchasing Ethereum to exchange for other cryptoassets like Ripple (XRP) and Ethereum Classic (ETC) is a good way to hedge against the unexpected failure of any given coin. Whilst one coin may fail, many VCs and technologists are in agreement that cryptoassets of some nature will become ubiquitous in the future.