17.09.2021 Crypto Basics By George Gus

How to buy Ethereum?

Why should buy the Ethereum token, ether?

Ethereum is the second-largest crypto project in terms of market cap after Bitcoin. It positioned itself as a platform that allows developers to build decentralized applications (dapps). Since its inception in 2015, it has never failed to impress. Today it has more than 3000 dapps running on its network and blockchain. For this reason, many investors, including newcomers, opt to invest in Ethereum by buying its token, the ether (ETH), through centralized or decentralized exchanges. As a result, if you are new to crypto, including ETH in your portfolio as a long-term investment strategy might be a wise decision. In this article, we will show you how to buy ETH, the native digital currency of the Etheuerem project.

Select an exchange platform

Before selecting an exchange, you need to understand that two types of crypto exchanges exist in the crypto market. The first is decentralized exchanges (CEXs), and the second is centralized exchanges (DEXs), each with its own advantages and disadvantages. To learn more, read: difference between CEX and DEX.

Buying ETH on CEXs

Centralized exchanges are the most simple, reliable, and comfortable on-ramp route for beginners to buy ether and crypto-assets such as coins. It is a 5 step process:

  1. Check if your country is supported
  2. Create an account
  3. Verify your identity
  4. Fund your account
  5. Start trading

At the link below on the Ethereum website, you can insert your country and see what exchanges allow you to register on their platforms: https://ethereum.org/en/get-eth/

Binance is the largest and most accessible crypto exchange in the world. Most likely than not, it will support your country of origin. Keep in mind some countries, such as China, have banned crypto while others, such as Salvador, have legalized it. It is to review your local laws before you fund start trading.

After selecting the exchange, head to its website, click register or create an account, and follow the registration steps. Once you log in, you will notice that your status is not verified. Click on it or search for the identification section and start the identification process.

The system will ask you to submit your ID and take your photo. This process is called KYC, which you must go through on most exchanges to comply with the law. It will take a few hours to few days to verify your account.

Now you can fully access your account and start funding with the cryptocurrency of your choosing. You will need first to deposit a fiat currency such as the US dollar via bank transfer or bank cards such as a credit or debit card, among other available options.

Then, trade your US dollar balance with ETH at the current market price. Next, you will see the ETH balance in your digital wallet on the exchange. You can trade your ETH with other cryptocurrencies.

You can liquid your position and withdraw the balance through the exchange. If you want to exit the market temporarily due to extreme price volatility, you can convert your ETH to a stablecoin, such as USDT or BUSD.

Stablecoins are one type of cryptocurrency usually pegged to a national currency such as the US dollar. For example, If a stablecoin is pegged to the US dollar, it should always be worth one US dollar. For more, read: what are stablecoins.

Buying ETH on DEX

Decentralized exchanges are highly secure since they operate on a blockchain. However, they are less convenient and may seem more complicated for the average user.

First, you need to choose a decentralized non-custodial digital wallet. In this case, you are solely responsible for your wallet’s private key and the funds it holds. If you lose access to your wallet, you lose access to your funds. You are also responsible for your wallet security. If someone hacks it, you will lose your funds as well. For maximin security, you should use an offline wallet, such as Ledger Nano. For more, read: type of digital wallets.

You can buy ETH directly from your online non- custodial wallet with your credit card. The following wallets support ETH and fiat exchange for ETH:

  • Argent
  • Trust
  • MyCrypto
  • imtoken
  • MyEtherWallet
  • Squarelink

After you set up your wallet on your desktop or mobile phone and buy ETH, you can hold it there for as long as you want. However, if you would like to trade it with other cryptos, you need to visit the site of one of the decentralized exchanges, such as Pancake and Uniswap. Then, connect your wallet and start trading. Your wallet must support the cryptocurrency that you want to hold in it. If it does, the coin or token ticker will appear in your wallet.

There are two ways to cash out. You can transfer your balance from your non-custodial wallet to your custodial wallet on a centralized exchange like Binance. Then from there, you can withdraw funds to your bank account.

Alternatively, you can trade your ETH with a stablecoin on a decentralized exchange then sell it directly to the buyer on a P2P platform. If this sounds complicated, it is not. With a bit of research and practice, you will master this process in no time. In the time being, start with a centralized exchange and then learn your way through.

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