Buying your first ETH — A step by step guide
In this post, we’ll walk you through how to buy your first ether (ETH), the cryptocurrency of the Ethereum network. We will cover how to create and secure your ethereum wallet, how to purchase ETH, and how to transfer the ETH to your wallet for safekeeping.
In this example, I will be creating a client-side wallet on MyEtherWallet (frequently shortened to MEW), which can be found here: http://www.myetherwallet.com*. On the homepage, you are greeted by the ability to create a new wallet. Enter a password that encrypts your private key, and click the ‘Create New Wallet’ button. Make sure you choose a memorable password, and that you don’t share it with anyone.
On the next page, you are instructed to download your keystore. A keystore is a repository of security keys that — when combined with the password you created in the last step — can be used to unlock your wallet. So, make sure you download it and keep it in a safe place, such as a protected folder or USB stick. After you have downloaded and secured the keystore file, press Continue.
On the next page, you have the opportunity to print out a paper wallet. A paper wallet has your wallet address and private key written out, as well as their respective QR codes. Much like a keystore, a private key can be used to unlock your wallet, but a private key can unlock your wallet without your password, so keeping it safe is extremely important. Private keys give you complete control over your wallet, so it’s important to keep them just that — private! Once you have downloaded or printed out the paper wallet, your wallet is ready, and you can continue.
Now that the wallet has been created, it is time to unlock it. Unlocking your wallet can be done in several ways, but the most common will be using your private key, or keystore and password pair. On the MEW website, go to the ‘View Wallet Info’ tab, and unlock your wallet now. When you unlock it, you’ll see a summary on the right hand side. As expected, unfortunately our wallet is empty! Now we need to buy some ETH to transfer to our wallet. Next stop: Coinbase.
Coinbase is one of the most prominent and easiest to use cryptocurrency exchanges. It supports purchases via bank account or with credit card, making it very user-friendly. Coinbase’s primary downside for beginners is that their fees are on the higher side, particularly if you are using a credit card (as Coinbase passes the credit card processing fees on to the user).
That said, Coinbase is also popular among beginners because new users can get $10 in free Bitcoin when they buy their first $100 in cryptocurrency using a referral link, which vastly outweighs the high fees. To take advantage of this offer, click here.
Once you create an account on Coinbase (the process may take a few hours to get verified), head over to the ‘Buy/Sell’ screen and choose Ethereum. Coinbase provides you the live price, as well as any fees included neatly on the right-hand side. In this instance, I am buying 0.05 ETH with a debit card. I click to confirm, enter my 2FA (two factor authorization) code on the next page, and I am now the proud owner of some ether!
Now that I have my ETH, I’m going to send it to the wallet we set up earlier. On Coinbase, go to the ‘Accounts’ section using the tabs at the top. On the left-hand side, you can see your ETH Wallet listed, with a button to ‘Send’. Click it! You will be asked for the address to which you want to send the ETH. Go back to your wallet, and copy and paste the account address (or public address) into the Coinbase prompt. Make sure you copy and paste the address perfectly — you don’t want to send ETH to someone else!
You may notice that there will be a small transaction fee. This fee (sometimes called ‘gas’ for Ethereum), is a processing fee that is generally very small. In my case, this is a tiny amount, equating to about $0.11 — much less than a $0.52 fee as Visa would charge a vendor! Notably, whereas payment processors charge a fixed percentage (usually around 3%), the transaction fee for Ethereum and other cryptocurrencies is flat, regardless of transaction size — imagine buying a house with only a $0.11 transaction fee!
Once I hit send, the transaction goes out to the blockchain to be confirmed. After it has the requisite number of confirmations (usually six), the transaction is complete, and the money is in your wallet. A few minutes later it already has three confirmations! I can also check the transaction using the link provided to etherscan.io, which you can check for yourself here.
Not long after, my transaction is fully confirmed, and I can see the updated balance in MyEtherWallet. Note that with a public address, anyone can see the contents of that wallet (though they can’t spend it), you can check out the wallet from this example here.
Congratulations! You now know how to create an Ether wallet, secure it, buy ETH, and send it to your secure wallet!
P.S. Don’t forget to use my referral link on Coinbase to claim $10 in free Bitcoin when you buy your first $100 in ETH or any other cryptocurrency using the link here.
*Security note: As with any browser-based wallet, it is incredibly important that you navigate carefully to the right URL, as many phishing scams try to copy a wallet’s design and hope that you don’t notice that you are on a different site. It is highly recommended that you carefully type in the address, bookmark the page for the future, and only navigate to the website from the bookmark. Never navigate to the site from emails or messages you receive from others, as they may have been altered.
Want to donate to help me generate great content? My ETH address is: 0x664A277931b94a6fAD129bEbBe85356C9007BD97