Skrill is an online payment app similar to PayPal that allows users to send funds to one another. It also acts as a payment gateway for merchants looking for a cheaper and easier way to integrate online payments into their businesses. Originally known as MoneyBookers, this UK based company allows for low cost money transfers in 40 different currencies. They also offer their users fast transfer payment times, with funds appearing in your bank account in as little as one or two days. For this reason they’ve become a highly popular option to accept and send online payments, and since Skrill accepts Bitcoin for loading your account, it can even be a good way to quickly cash out your crypto gains to your bank or get cash using the Skrill ATM card.
Investors will also be interested to know that Skrill is typically the payment processor of choice for many Ethereum-related websites and that it’s possible to purchase ETH and other coins using debit cards or bank transfers thanks to partners like BitPanda. This is typically a fairly quick and painless process once you’re set up, making it an efficient way to buy Ethereum when using a bank card. Skrill offers their service to over 200 countries, including the United States, Australia, Canada and many others.
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Why should you use Skrill to buy Ethereum: A guide for investors
As a new investor looking at Ethereum, you may be wondering what’s so special about it. The appeal surrounding Ethereum is less about what it can do itself and more about what others can do with it. Unlike Bitcoin, Ethereum is not just a global currency used for financial transactions or storing value but it also acts as a protocol layer for other projects looking to build new blockchain assets, projects and tools.
Right now much of the internet is centralized, meaning that it suffers from central points of failure – particularly in areas concerning privacy and censorship. As an example of the level of centralization at hand, Amazon Web Services is believed to host over 31% of all cloud based applications – many would argue that this is a ticking time bomb. If something within this service fails it has an enormous ripple effect across all of the properties currently hosted within that system. It can also lead to issues with censorship where one entity has the ability to govern and control a large portion of the web’s content if they want to. At the moment however, it’s not considered a problem – afterall, everyone trusts Amazon to “do the right thing”. But what if that element of trust can be removed, and security can be guaranteed for everyone on the network? The Ethereum network is both anti-censorship and anti-centralization thanks to its distributed set of nodes which store data, validate and secure the network. This currency’s goal is to decentralized applications of all kinds so that they can function without being bogged down by bureaucracy or unjust censorship.
Unfortunately, Ethereum is not without its own host of issues. The biggest of course being the problem of scaling the network. These difficulties arise from two main issues. The first is due to the way the blockchain works. Ethereum transactions must be validated by every node on the network, meaning that every app interaction or payment made must be validated (and repeated) thousands of times and stored for eternity – this is an essential security feature that has major benefits at the expense of speed. This is fine when a blockchain project is in its infancy and there’s not much going on. However, once the blockchain starts to get a little attention, the growing pains become very apparent. The network is suddenly clogged; transactions take forever, and the fees (the cost to have a transaction included on the blockchain) increase dramatically as demand for use of the blockchain rises. One example of this – and in a fashion befitting the internet culture surrounding cryptocurrencies – a game featuring digital cats (CryptoKitties.io) brought Ethereum to its knees. This resulting chaos of this applications only further cemented the fact that blockchain projects would need some massive fine tuning in order to accommodate a mainstream audience.
The second issue with Ethereum comes from its algorithm, Proof of Work (PoW). This is the current consensus method for validating transactions and is used across the vast majority of cryptocurrencies including Bitcoin, Monero and Litecoin. However, PoW requires vast amounts of hardware and energy resources, which has drawn criticism in the past.
The Ethereum team is working on some excellent solutions to this scaling problem as well as an alternative to PoW. For starters, the network will be switching to a Proof of Stake (PoS) model. While this consensus mechanism is sometimes criticized as not being as secure as Proof of Work (largely because it has not yet been implemented and tested), it does come with the advantage of lower energy costs and faster block confirmation times. Without the burden of requiring massive amounts of hardware and electricity, the network can grow with less restriction without compromising on security. Ethereum’s Casper Protocol also improves upon the security of the traditional Proof of Stake method by establishing a punishment for bad actors in the system. Users will be required to stake their coins to participate as always is the case in PoS, but if they are found to be acting maliciously, their stake will be lost (“slashed”).
Why would anyone volunteer for this? Proof of Stake is essentially a form of mining where instead of utilizing the hashing power of your computer to generate blocks, you are paid for placing a stake of Ether. For many Ethereum investors this could be a lucrative proposition. If the investor is already planning a “buy and hold” strategy for Ethereum, then the opportunity to pick up a little interest would be appealing. While the exact percentages being discussed are purely estimates now, it’s easy to see how this added incentive turns Ethereum into an even more attractive investment.
In addition to adopting their new PoS model, Ethereum will also be implementing Plasma Cash. Take note that this is not the same as Plasma, another Ethereum scaling solution. You could actually think of Plasma Cash as an upgrade to the base scalability of Plasma. Where in the Plasma solution nodes had to download every block of the chain, Plasma Cash allows for this information overload to be mitigated. This system works in conjunction with smart contracts, which would give users a unique token in exchange for their funds. This means that only the newly created transaction would need to be tracked, essentially allowing users to cherry pick the data that they want instead of being forced to partake in everyone’s data. This overcomes the problem discussed earlier, whereby every Ethereum transaction must be repeated and validated by every node on the network.
While this is still a working concept, if implemented it would likely have a profound effect in speeding up transactions on the network once it has been fully developed as a scaling solution. Besides scaling, it also has some other fascinating use cases, and Vitalik Buterin, the creator of Ethereum has said that he envisions Plasma Cash being used in the future as a sort of insurance policy to protect exchanges from large scale thefts thanks to the way the smart contracts will function.
While it’s clear that the Ethereum team still has a long way to go on their scaling solutions, the power of Ethereum can not be denied. It has already established itself as the key player in decentralized blockchain applications, hosting over 1,000 different projects. If they can address their scaling issues and come up with a working solution to the dreaded blockchain bloat then this dApp giant will be unstoppable. A project such as this allows for almost limitless options for future applications and developments that will improve the cryptocurrency space as a whole.
How to buy Ethereum with Skrill
Fortunately for investors looking to purchase Ethereum with Skrill, there are plenty of options (as can be seen the table above). One option – which we’ll use for the demonstration below – is to use BitPanda which enables Skrill purchases for Ethereum and other cryptocurrencies. Investors should keep in mind that while Skrill allows for over 200 countries to utilize their service, BitPanda only caters to those in European countries. Cryptocurrency traders from other regions will need to find another solution. If you do fall within the accepted countries category, then here’s how to buy Ethereum on BitPanda using Skrill. (This tutorial assumes that you already have a Skrill account, if not you’ll need to make one before proceeding).
- Create a BitPanda Account
- Confirm your email address
- Verify your account
- Choose your verification document
- Choose a verification partner
- Go to the buy page
- Enter your order details
- Choose Skrill as a payment method
- Finalize your order
- Authenticate your order
- Make your payment
The first step is to create a BitPanda account. For this step you’ll only need basic information such as your email address, country, name and desired password.
To begin using your new account you’ll need to first confirm your email address. BitPanda will send you an email to make sure that it’s really you who signed up for the account. Once this is done you’ll be good to go to login to your account.
BitPanda does not allow any unverified trading. That means that before you can do anything else you’ll need to provide some additional information about yourself. Make sure everything that you enter here is correct, including the phone number, as you will be unable to change this information later, and the phone number will be very important for using your account.
BitPanda requires all users to submit a verification document. You’ll need either a valid ID card or a passport. Please keep in mind that they will not accept a driver’s license as suitable verification. Your ID should be current and not expired.
BitPanda’s verification process also requires you to verify with one of the above partners. These outside entities will conduct a short video interview where you will be required to show the ID that you’ve chosen. Users will need to either have a webcam or a mobile phone available to complete this part of the verification procedure. Some users have reported having issues with this step if a camera is of low quality, so use whatever you have that provides the clearest picture. The good news is that once this is done you should be immediately approved.
If you click trade at the top of your account page then you’ll be taken to the buy or sell options. By clicking on buy you’ll be able to navigate to the correct screen to make a purchase.
On this page you’ll need to enter your order details. You’ll have the opportunity to choose which cryptocurrency you want to buy, and then you’ll be able to select a payment method. This page will also tell you the base price of the cryptocurrency that you want to order, and you’ll be able to see how many coins you’ll receive for your fiat currency trade.
On this page you’ll be asked to confirm the payment provider who you’ll be transferred to. You’ll also receive details about each method such as how long the process should take.
You’ll be able to confirm your details here. Take a moment to make sure everything looks right before proceeding, and take note that BitPanda allows users to only have one credit card on their account. This is a fraud prevention measure, so be careful.
Next you’ll need to confirm this order via the mobile number used when you signed up to make sure that it’s really you placing the order. You can do this via phone call or SMS verification. BitPanda will send you a PIN code that you’ll need to enter in order to continue.
The final step will transfer you to the payment processor of your choosing. If you chose Skrill as your payment method, then you’ll be redirected to Skrill in order to complete the payment. You’ll simply need to login to your Skrill account and confirm the details. Once you’ve done that you’ll need to wait for the transaction to complete. Watch your BitPanda account wallet, and you’ll be able to see when the Ethereum is deposited to your account.
Securing Ethereum bought through Skrill
Congratulations, you’ve purchased your Ethereum! However, your job is not quite done. Cryptocurrencies offer investors a great deal of freedom and security, but at the cost of responsibility. Without a 3rd party custodian, it’s your job to make sure that your investment is secure. Please remember that there is no one who can return your coins to you if they are stolen or if you do not properly backup your wallets or store your passwords safely. Here’s some options for you to consider in order to keep your investment safe.
Cold storage wallets
If you’ve invested in a good deal of Ethereum, then it might be in your best interest to utilize a cold storage wallet. Even encrypted cryptocurrency wallets can still be vulnerable to attacks from malicious software, and so the safest option is to simply deny your wallets access to the internet at all unless you are actively using your cryptocurrencies. This can be accomplished in several ways, but here’s a couple of suggestions for you:
Purchase a hardware wallet
Hardware wallets are becoming more and more popular with investors, especially those who have a lot to lose. These are commercially made devices that have advanced features to help keep your assets safe. After you transfer your cryptocurrency to these wallets, they are disconnected from the internet, giving no access to your funds. They also have easy backups by way of seed phrases and the ability to support multiple currencies. Most of them are quite easy to use, and even cryptocurrency amateurs should be able to learn how to use one without much difficulty.
If you’re interested in a wallet like this then you could consider a Ledger, Trezor or KeepKey wallet. Each of these devices has their own unique strengths and weaknesses, and you’ll need to carefully review their features to know which one is the best option for you. These wallets can generally be bought for around $100. For further information, read our guide on Ethereum wallets.
Create a paper wallet
Paper wallets are the original cold storage options for cryptocurrencies. While this method is not as widely used anymore thanks to the advent of hardware wallets, it is no less effective. While many newer currencies may not have a way to utilize this option, Ethereum still does. Investors should keep in mind that they need to be very careful when utilizing a paper wallet generator, as the software may have been compromised or built to be malicious. Some of these sites may actually be attempts to steal your funds. Make sure to ask around for a legitimate site before proceeding. However if you’re not interested in investing in a hardware wallet, then this can be a fine way to store your coins. After printing one of these wallets, you’ll be able to lock it away safely somewhere in your home or even in a safety deposit box.
Securing through other means
It’s typically not a great idea to store your cryptocurrency on an exchange, but in some cases the perks of doing so could win out. If you use a highly reputable exchange such as Coinbase, they might offer security measures which could be beneficial enough to warrant storing your coins there. Coinbase for example has excellent security protocols, and they even offer an insurance policy. However, investors should note that this policy only covers breaches of Coinbase’s security, and not breaches to your individual account. That means that if your account information gets phished they will not help you recover any funds. So make sure that you’re practicing good account security and that you’re using 2 step procedures to keep your account safe.
Coinbase utilizes cold storage, and 98% of all the funds that they hold are actually offline. This prevents massive thefts and disasters from occurring. Even if someone did manage to compromise their system, it would very hard for them to steal anything significant. It’s also possible to utilize the Coinbase vault. This is a special account where you can add funds normally to it anytime you want, but withdrawals are subject to additional verification procedures. If you have a long term Ethereum investment that you plan to keep for a long time, then this is likely a good place to keep it.
The vault process utilizes a secondary email address, and it would be a good idea to create one that you use for nothing else other than Coinbase to reduce the chance of anyone stealing the password. It’s also possible to set up a group account which requires authentication from another person for withdrawals to be made. If you have a spouse, or perhaps a very trusted friend, then you might be able to use this for additional security as it would be unlikely an attacker would be able to compromise both of your email addresses.
Wallet security is a difficult subject, we strongly recommend that you do your own research and have a full understanding of what you are engaging with before purchasing large quantities of Ether.