Bitcoin (BTC) was the original cryptocurrency and remains the largest by market capitalisation, but much of the interest in blockchain today is focused on the Ethereum platform and its Ether (ETH) cryptocurrency, which has seen its market cap soar to $500bn in recent weeks.

Whilst Bitcoin has its own blockchain or ledger, Ethereum is interesting because it provides the blockchain upon which a vast array of other cryptocurrencies operate – it has become the backbone for a large swathe of the crypto market, both with its own Ether token and others such as Tether (USDT), Shiba Inu (SHIB), and Chainlink (LINK).

The Ethereum network currently generates its token, Ether, in a proof-of-work system, similar to that of Bitcoin, but in order to improve scaling, reduce transaction “gas” costs, and reduce its environmental impact next year the platform will move to a proof-of-stake model. In this new model, introduced by the London fork of the platform, transactions will be verified according to how many coins someone holds instead of how many complex computations they have completed. If these changes go smoothly, it should keep Ethereum as the dominant smart contract platform, but the risks are significant.

So, how do you buy Ether?

How to buy Ether (ETH)

1. Understand the risks

As with all cryptocurrencies, there are significant risks in investing in Ether and investing is a gamble. The currency is not backed by any government and holds no intrinsic value, so is only worth what people are willing to pay for it. Prices go up and come down rapidly, with fortunes made and lost within weeks, so anyone thinking about exploring cryptocurrencies should only invest what they are prepared to lose.

2. Find a cryptocurrency exchange

The process of buying Ether is a little different from how you would buy stocks using a brokerage account. This is because cryptocurrencies are traded differently than at the stock exchanges in London (LSE) and New York (NYSE). There are very few brokerages that offer crypto investments.

To acquire crypto, you need to register for an account with a cryptocurrency exchange such as Coinbase, Kraken, Uphold, and Crypto.com. The exchanges allow people to buy and sell a variety of cryptocurrencies, securely hold them in digital wallets, and also convert them into fiat currencies such as Sterling (GBP) or US dollars (USD).

3. Verify your identity and deposit funds into your account

Before buying Ethereum through an exchange, you need to add funds to your account. As exchanges offer financial services and need to comply with complex financial regulations, most will first ask you to verify your identity in much the same way digital banks do when you sign up for an account.

Once you have verified your identity, you can deposit the funds you want to invest into your account by bank transfer, card payment, or via PayPal or Skrill. Each exchange charges different fees on deposits, from zero to three per cent, so make sure to choose the platform that best suits your requirements.

4. Buy the Ether

Once you have an account at an exchange and funds at your disposal then you are ready to buy your Ether. Unlike traditional stock exchanges with set opening and closing times, cryptocurrency exchanges will process transactions 24/7.

To buy your first Ether on an exchange, check for the symbol “ETH” and enter the amount you want to spend. A single Ether token costs over £3,000 ($4,000), so most people will not buy a whole coin and instead choose to buy a fraction of a coin for £10 or £100.

Hold or spend?

Once you have bought your Ether, you then have the option of whether to hold onto your investment, a practice known as “holding” in crypto circles, or whether you want to use the currency to buy goods or services.

As interest has risen in cryptocurrencies in recent years, a wide variety of businesses have started to accept cryptocurrencies like Bitcoin and Ether as forms of payment from restaurants to art auctions. The high risk nature of crypto investment often draws in those that enjoy gambling, and so as a result some of the best online casinos in the UK reviewed by experts in VegasSlotsOnline now accept deposits in cryptocurrencies. And for those that are interested in the burgeoning market for Non-fungible tokens (NFTs), then many of these platforms, like OpenSea and Rarible, only accept payment via cryptocurrencies.

For those who do not plan to spend their Ether, and instead want to hold onto the crypto in the hope that the prices will continue to rise “to the moon”, it may be worth exploring the security of a cold wallet. Many people hold their cryptocurrencies in wallets provided by the exchanges, but some prefer to hold onto their funds in personal wallets they run on their own devices, which can be insecure. “Hot” wallets, which are connected to the internet are required for trading crypto currencies, but it you want to hold onto your investment for years then you can move the crypto to a “cold” wallet, which is disconnected from the internet and therefore unavailable to hackers – but be warned, if you forget the passcode or break the device with your cold wallet then you may lose the crypto forever.

Share.
Disclosure:

Leave A Reply