Unlocking Ethereum: How to buy and store Ether securely

Mason Hall
Aug 24, 2017 · 5 min read

Co-written with Nathan Martinez.

The most common question I get asked among friends nowadays is: How do you invest in Bitcoin and Ethereum? With the incredible surge in popularity of Ethereum and ICOs touting new alt coins every month, many people new to cryptocurrencies are looking to get involved. Creating a system to store and send these tokens is not as easy as one might think, and this article will break down the process step by step.

The backbone of Ethereum is the ‘wallet’, a software program that stores your unique public and private keys. While they don’t actually hold your tokens (a topic for another article), they can be thought of like a normal wallet. There are many different types of wallets, and some are more secure than others. In this article, we will set up a wallet that is both secure and easy to use.

MyEtherWallet

Let’s choose a client-side wallet that is open source, so we know for sure what we are getting. MyEtherWallet is a well documented and well built project which is perfect for what we need. There are some phishing websites with similar domain names that have tried to scam people out of their coins, so let’s just download the .zip of the website straight from the github page to be sure. The latest release can be found here on Github. Click on the link that looks like the one below (your version might be different).

Once you have downloaded that file, extract the folder by clicking on it, and something like this should appear:

Now we can access the website by double clicking “index.html”. It should open your preferred browser.

Creating your wallet

Once you have loaded the web page, you are now ready to generate a new wallet. If you want to be extra secure, you can transfer the above folder to a flash drive and download it on a different computer that is ‘air-gapped’, i.e. never connected to the internet. Assuming most of you don’t have a separate computer, you should just turn off your wifi for the following steps.

Enter a password that only you know and you will remember, and click “Create New Wallet”.

Click the download button to save your Keystore file. If it just opens a new tab when you click on it, right click and select “Download Linked File”. You should transfer this file onto a USB stick, or some other hard drive. If it is saved on your computer, it could be found by someone easily. Read the warning. If you understand it, click the “I understand. Continue” button. Now, click “See my address”.

Accessing the Wallet

Open the “View Wallet Info” tab and click “Keystore File (UTC / JSON)” and then “SELECT WALLET FILE…”. Select your newly downloaded file, enter your password, and click “Unlock”.

Welcome to your wallet. Here you can see your public address (at the top), your account balance (currently 0 ETH for this account), and other information.

Never reveal your private key to anyone. You only need your public address to receive ether. It is also good practice to print a few paper wallets, just in case you lose your keystore file.

Coinbase

Coinbase is the easiest way to purchase Bitcoin, Ethereum, and Litecoin. Find out how to buy Ethereum by following these quick steps. You might be tempted to leave your ethereum in Coinbase. However, since coinbase is a centralized company that has the right to freeze/close your account, suspend trading, or even go out of business, you should save most of your coins in a place only you control.

Send Ethereum from Coinbase to MyEtherWallet

Navigate back to the MyEtherWallet tab. Copy your Public Address (the top address). Navigate back to the coinbase tab.

Once you have bought your ether, it’s time to move it to your newly created wallet.

Click the “Send” button. Paste the public address into the Recipient field. Make sure the ETH wallet is selected (below amount) and you input how much ether you want to send. It is recommended to send a small amount first to test that the transaction went through.

Click Send Funds.

Receiving Tokens

In a few short seconds you will find your ether securely In your MyEtherWallet. You can also receive all ERC20 tokens (altcoins built on the Ethereum blockchain) to your same public address. They will show up in your account balance separately.

Sending Tokens

Click on “Send Ether and Tokens”. Input the public address of the wallet you want to send it to i.e. your friend, an exchange, or an ICO and choose the amount to send. You can leave the Gas Limit at 21000.

Click “Generate Transaction”.

Conclusion

So now we’ve shown you how to safely generate and access a unique ethereum wallet using MyEtherWallet. This wallet can store all altcoins built on the ethereum blockchain, called ERC20 Tokens. Second, we’ve shown you how to buy and send ether to your new wallet. Last we showed you how to complete transactions with other addresses for sharing funds. Hope this helps and good luck!

)

Mason Hall

Written by

Blockchain Researcher | ex-Consensys VC intern | CS student @Vanderbilt

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade