If you were thinking about investing in Ethereum you want something that has an accumulative return there your absolute best bet is Ethereum. Since 2017 started, despite a sudden drop in price, Ethereum’s value has gone up by more than 2500% year to date. The S&P 500, by comparison, took almost 40 years to achieve those heady heights. There are a few ways to invest in Ethereum and we’re going to talk about them here. Incidentally, one of the easiest ways is to purchase Bitcoin first and then use that to purchase Ether.
HOW DO I BUY ETHER?
If you want to purchase Ether, the Ethereum currency, you will need to make use of an exchange. There are some exchanges that will store your keys for you, privately, and this makes it very easy to buy and sell but you do lose on the security aspect. There is also the issue of having a third-party looking after your information for you and that is not the idea of a decentralized system. If that exchange was hacked, and it has happened, your keys also get hacked and your access to your Ether is gone forever. The best alternative is to store your own keys offline or by using hardware – the most secure method but also the most difficult. You would need to be sure that your hardware never got corrupted or destroyed or you never lost the piece of paper that your keys get printed onto. Does it not also strike you as being just a little ironic that, to store your keys for a digital online currency, you need to use paper? More about storage later.
WHAT IS AN ICO?
An ICO is an Initial Coin Offering and it is a way of buying tokens in a specific company. In return, normally you will get some voting rights in the management of the company or, in some cases, a share of the profits. All of this is managed by way of the smart contracts we talked about earlier.
So how do you buy Ether?
The Easy Way – A Card Purchase
If this is your first time investing in a cryptocurrency, the best and easiest way is to go through CoinBase. They allow you to purchase and sell Ether using a credit card and they take away the need to get an exchange involved.
CoinBase is one of the best respected, the easiest to use and the most trustworthy way to purchase cryptocurrencies and they offer a decent desktop interface and a great mobile app. You can purchase any amount of Ether from $10 right up to $1000 in any coin. However, because they are one of the most popular, new registrations on CoinBase are reportedly being held up because of the increased demand, especially during peak times. These issues should be cleared fairly soon but, in the meantime, there are other ways to buy.
This is a full exchange, offering users the opportunity to purchase Ether using a credit card in USD, GBP or Euros. It is recommended that you sign up to both CoinBase and CEX as you will stand a chance of getting access when it is busy – especially if CoinBase goes down. This is one of the friendliest of all the main exchanges, offering a well-designed user-friendly interface.
BitPanda is primarily focused on the European market and is based in Austria. This exchange allows you to use SEPA, Skrill, and Visa to purchase Ether. Again, it has a very friendly user interface and also allows you, should you also purchase Bitcoins, to transfer them into vouchers for Amazon DE. This is a highly recommended exchange for anyone based in Austria or Germany.
Coinmama has only recently expanded into the Ether market and, right now you can only make your purchase using Euros or USD. However, they do accept all major credit and debit cards for payment. The biggest benefit to using Coinmama is that, as soon as you have bought Ether, it is transferred directly to your wallet – more about those later – as opposed to some exchanges that hold your coins. With Coinmama, you have total control and have the ability to direct them to your exchange address or you can transfer them into another type of altcoin.
THE SLIGHTLY HARDER WAY – THROUGH AN EXCHANGE
The exchanges in this section may take longer for you to understand how they
work and how to navigate their user-interface. However, often the fees are much lower and you get more features to play with. If you are looking for a more serious investment option, these are the better ones to get involved with.
It is also worth noting that withdrawals and deposits to these exchanges tend to be easier and that is a critical point – when you make a purchase through an exchange unless you are intending to sell it immediately, remove it to a wallet. If you don’t and the exchange gets hit by a hacker you may lose all your Ether in one fell swoop. There is also the chance of a service outage on any exchange.
The downside is that not all of them make it easy to pay using Euros, GBP or USD and you may incur quite high bank fees if they do. This is only cost effective if you are buying a decent amount but it is always worth checking because you may not always be able to pay by card.
One of the best recommendations is to register with several exchanges – you don’t need to make a purchase on each of them right away. It can take several days for account verification to be completed so you need to have them ready in case you need access. Not only that, prices can vary from exchange to exchange and you want the best price you can possibly get.
The best full exchanges to look at are:
This is a social trading platform that makes decisions that are based on social investment. Your investment will be based on the collation of actions by many and it offers a nice simple interface to help you make your investment.
eToro allows you to trade on an ETH/USD exchange, most probably the easiest way to get some exposure to the currency without the need to go too much into technical set ups. It is regulated by the UK FCA and is thought to be one of the safest methods of trading across a wide variety of markets.
A Copy Fund has recently been introduced by eToro, allowing you easier exposure to digital currencies and this gives you an easier way of making a mainstream investment without the need to monitor and manage your coins yourself.
It is important for you to understand that you will not own the coins through eToro; instead, you are making an investment in a price-tracking fund so make sure you only invest an amount that you can comfortably afford to lose.