How to buy and store Ethereum
Buying Ethereum (ETH) isn’t particularly simple initially, with no obvious place to start as a newcomer to the world of cryptocurrency and related blockchain assets. With Tokendrop’s launch approaching fast, we thought we’d provide some high level information on how to get going.
If you’ve come here wanting to better understand why you should be interested in Ethereum, these two articles should serve as a decent point of entry for further research: “A beginner’s guide to Ethereum” from Coinbase, and “Ethereum for Everyone” from Ethereum's AI. Beyond the technology itself, the total market cap of cryptocurrencies is now bigger than the GDP of most countries on the planet, and growing fast. Albert Wenger, a venture capitalist from USV says “I’m in the camp that $80 billion [market cap] will still look like a small blip when we look back.” It took 7 years for the value of all cryptocurrency to hit $10 billion, another year to hit $20 billion, 3 more months to hit $40 billion… and 3 weeks from there to hit $80 billion.
Where can I buy Ethereum?
There are lots of places to buy crypto, but the best prices will usually be found on trading platforms, as opposed to through brokers. Be prepared for some delay prior to your crypto foray, however — you may have to wait a few days for account verification.
Coinbase: One of the world’s most popular places to buy Ethereum. Prices are typically higher than trading platforms, but the experience of buying is market leading in most respects. Coinbase is a good choice if you plan to buy-and-hold, instead of trade day-to-day. They’ve had a succession of downtime incidents during busy trading periods recently, but they are working towards more robust systems.
Kraken: an internationally popular trading platform, which has had far fewer problems dealing with waves of new interest in crypto than some infamous alternatives such as Poloniex and Bitfinex. It seems to be a common choice for friends and associates living in Europe and the UK, in particular.
BTCMarkets: The only real choice for Australians. Expect high ETH prices, but this is your price of admission with such limited choices down-under. On the flip-side, when you sell, you’ll also be able to sell at higher prices than other exchanges.
Where can I keep my Ethereum safe?
Once you have your ETH, we’d strongly advise moving it off-exchange and away from centralised services such as these. This is still the land of cowboys, and dodgy stuff happens daily. Recent examples include denial-of-services attacks halting access to Poloniex accounts, and even exchanges such as Bitfinex being hacked, with funds they held on behalf of traders being stolen.
Storing your ETH on a ‘paper wallet’ using MyEtherWallet.com is currently the best way to avoid disaster. If you’re wondering how your ETH can be stored on a piece of paper, this isn’t unusual. Describing it in layman’s terms: your cryptocurrency isn’t coins stored in any one place. Your digital coins are represented as transactions on a distributed ledger; a blockchain. There are tens of thousands of copies of the ledger, but a ‘private key’ – a very long and unique string of digits – provides access to the parts of it that are yours. So, keep that key private! If you lose it, you’ve lost access to your money.
How do I withdraw my Ethereum profits to a bank account?
It’s simpler than you might imagine, and many exchanges — the ones mentioned above included — let you withdraw to fiat currencies such as USD, GBP, EUR, and AUD.
How can send or receive Ethereum without also revealing my wallet balance?
That’s just one part of what Tokendrop.com is for. Stay tuned for our launch in the very near future!
Is there anything else I need to know?
We’ce covered off most of the critical details, but please don’t hesitate to get in touch with queries and we will be sure to answer your questions.
This article was originally posted by Tokendrop Co-Founder, Jamie Skella, as “How to buy Ethereum in Australia”.