How do I buy Ether?

After the introduction to Ethereum in the previous post, in this article we have explained the best ways to buy Ether, the cryto-fuel for the Ethereum Network. The first batch of Ethers were distributed behind closed doors to private investors in 2014-2015. A year has passed since then, and multiple exchanges are now listing Ether and trading it among other cryptocurrencies.

The buying process is practically identical to Bitcoin: you have to register to an online exchange, purchase Ether with either Fiat currency (i.e. Euro, USD, GBP, AUD) or with Cryptocurrency (i.e. BTC, DOGE, XMR), and then transfer it to your Ethereum wallet for safe keeping.

Ether Exchanges        

As Ethereum is becoming increasingly popular, a growing number of online cryptocurrency exchanges are starting to trade the new currency and compete with each other for customers. You can find a full list here and familiarize yourself with the most active exchanges. To make your life a bit easier, we have selected 2 popular Ether exchanges.

Poloniex – Is a US-based exchange that trades Ethers for Bitcoins, and offers state-of-the-art protections and tools for its customers. It’s continually audited and secured with two-factor authentication and cold storage for funds. If you already have Bitcoins in your Coinbase Wallet (see Part 1 of our Bitcoin blog) or some other crypto wallet, deposit BTC into Poloniex by choosing Balances->Deposits & Withdrawals.

Search for “Bitcoin” in the search bar on the right or hit “Ctrl+F”. Click“Generate Address” to generate your public key to receive Bitcoin.

Now enter/copy this in your Coinbase or other Bitcoin wallet, and transfer BTC from there. The funds should be available in 30 minutes for trading (after a few confirmation cycles). In the Exchanges tab, below the main chart, enter the amount and click Buy to purchase Ether.

To withdraw ETH to a different wallet (More info on wallets below), go to the same section where you created the deposit address (Deposits & Withdrawals under Balances), find Bitcoin, Enter your wallet address in the text box and click “Withdraw BTC”.

Kraken – If you are looking for a truly professional exchange, look no further. Kraken is the first exchange to pass a cryptographically verifiable proof-of-reserves audit and receive the highest security ranking for their data storage solution. The exchange trades many cryptographic currencies, with Ether being one of them. The process is almost similar to what is explained above except you can deposit USD, EUR, and few other currencies including many cryptos. Generate a Bitcoin receiving address as shown in the screenshot below to deposit BTC if you already have some.

Send Bitcoin to the wallet address from Coinbase or other wallets and wait for an hour for funds to reflect in your account. Set your currency pair as “ETH/XBT” in the drop down at the top and choose Trade->New Order. Enter the amount and Buy. You can send the purchased ETH to other wallets by choosing Funding->Withdraw->Ether->Add Address. This is where you enter the address of your wallet (More info on wallets below).

Ethereum Wallets

We highly recommend that you create a dedicated Ether wallet before you exchange any funds. That way, you can quickly transfer your Ethers from the centralized server to the safety of your own wallet. What follows are the top 2 Best Ether Wallets today from our tests.

MyEtherWallet – According to its official description, MyEtherWallet is an open source, JavaScript, client-side tool for generating Ether Wallets and sending transactions. It was created as an answer to some problems that users were experiencing with the Ethereum client. The source code is freely available on GitHub to anyone who wants to get a peek under the hood. They also have a Chrome Extension in Beta now. They store all your data (nickname, wallet address, and private key) in Chrome Storage (https://developer.chrome.com/extensions/storage). This is the same place Chrome saves your passwords. The private key is encrypted. Generate a wallet and transfer funds from your exchanges to this address.  We have used this extensively and are very happy with the free service.

Official Ethereum Wallet – The official Ethereum wallet is still under heavy programming development and new updates are being frequently released to testers, who are not afraid of encountering a bug or two. It provides a convenient graphical user interface to common functions and relies on geth or the eth client. The step-by-step guide will help you set everything up, so you won’t be left confused and unsure about what to do next.

As previously mentioned, recently, Ether overtook the competition to become the most valuable altcoin to Bitcoin as the price soared 1,000% in the first two months of 2016. This is only the beginning as more news is expected to come out soon. Many Blockchain developers who are interested in building and using decentralized applications have started experimenting with Ethereum Blockchain. Anyone can visit and study the curated collection of decentralized apps to get a small glimpse into the future of the world powered by the Ethereum Blockchain technology.

Hope you enjoyed the post, please feel free to leave comments, questions, and any feedback below!