How to Buy Ethereum (Beginners Guide)

ETHEREUM BUYERS GUIDE

We’ve put together this no nonsense step-by-step guide to buy Ethereum using whatever payment method you’d like. 

It’s comprehensive and easy to understand, no crypto dictionary required. 

Buying Ethereum: Important Factors

There are three important factors to consider when buying Ethereum. Depending on your situation there are trade-offs between these factors, and each of them can also have an impact on the fees you'll pay to get the Ethereum.

How to buy Ethereum (Ether / ETH) infographic

Where you are (Country)

There are Ethereum exchanges that operate in most countries around the world and each country and locality has its own views on Ethereum and transacting via cryptocurrency. Understand the legal restrictions based on your country of residence to get a better sense of how you can best make an Ethereum purchase.

Impact on fees - Due to local regulations, some exchanges charge higher fees depending on the country. Also, some exchanges only allow deposits in certain currencies (USD, CAD, EUR, etc.) so it may be necessary to pay fees in your local currency as well.

How you want to pay for it (Payment Method)

Depending on the exchanges available in your country, each will take various forms of payment to purchase Ethereum. Options can include debit card, credit card, bank account, wire transfer and cash.

Impact on fees - Typically the more convenient options, such as credit cards and debit cards, come with higher fees as the banks charge the exchanges for these types of transactions and the exchange passes those fees on to you.

How quickly you want it (Speed)

As of March 2018, it takes 14 seconds for a block to be added to the Ethereum blockchain. However, buying Ethereum from an exchange directly involves other transactions not on the blockchain and while some payment methods can be instantaneous, others can take weeks due to long account verification and withholding times.

Impact on fees - Transaction fees for Ethereum are dependent on how busy the network is. If more people are buying and selling Ethereum, the cost to transact goes up. The opposite is true if the network is less busy. Fees are also tacked on by Ethereum exchanges (in some cases the fees are hidden, depending on the type of payment being used).

INTRO TO EXCHANGES

Exchanges are considered the easiest option to buy Ethereum because they don’t require downloading any software or learning much at all. They are websites that typically have easy-to-use interfaces that you can log into.

Most exchanges allow users to hold their Ethereum within the exchange itself. These, however, are always at risk of theft, as the keys to your crypto are held by the exchange, which is itself a centralized entity susceptible to hacks.

Since they’re such a prime target, several crypto exchanges have been hacked, resulting in the loss of millions of dollars worth of coins.

Grizzle recommends moving your Ethereum onto a hardware wallet after purchasing your bitcoin on an exchange. Check our our wallet reviews here to find the best wallet to suit your needs.

3 Things to Check When Deciding on an Exchange

Percentage of coins stored on exchange - The less coins stored on the exchange, the less susceptible you are to losing your coins in the event of a malicious attack.

Advanced security - If the exchange offers added security features, such as data encryption and Two-factor authentication (2FA), your crypto will be much safer. Grizzle always recommends enabling 2FA if the option is available.

Funding and withdrawal options - Most exchanges offer several options for converting your fiat (USD, CAD, GBP, EUR, etc) into Ethereum. For each type of funding/withdrawal option there is typically different levels of verification required, daily or weekly limits and fees. Also, certain funding/withdrawal methods can impact the speed at which you can buy (or withdraw) Ethereum from the exchange depending on how the exchange treats anti-money laundering regulations in your location.

Check out our exchange reviews to find detailed reviews of the top crypto exchanges based on our rigorous 10-point rating system.

Deciding on a crypto ethereum exchange infographic

Why We Recommend Coinbase for Beginners

One of the easiest places to obtain Ethereum is through Coinbase. It’s also one of the most secure because they only store 2% of their crypto on the exchange, they provide advanced security, including 2FA, and if your coins did get stolen they’re insured up to $250,000 through FDIC insurance (for American customers only).

Below are steps on how to obtain a Coinbase account and buy bitcoin with credit card, debit card or bank transfer/wire.

HOW TO BUY ETHEREUM WITH CREDIT CARD

One option for purchasing Ethereum is by using a credit card. Credit card purchases can often be a fast way to purchase cryptocurrency, however, they’re also the most susceptible to hidden charges since all banks handle cryptocurrency transactions differently.

Some banks apply chargeback fees, while others add a fee for a cash advance, which is required to make an exchange transaction. If you’re concerned about this, make sure to check with your bank to understand all applicable fees before making a credit card purchase.

There are already many restrictions to purchasing cryptocurrency via a credit card, with many banks and credit card companies limiting or restricting purchases altogether.

KNOWN CREDIT CARD RESTRICTIONS

BANK/CREDIT CARD COMPANYRESTRICTION
DiscoverBanned all cryptocurrency purchases
Capital OneBanned all cryptocurrency purchases
TD BankBanned all cryptocurrency purchases
ChaseBanned all cryptocurrency purchases
American ExpressLimited to purchases of $200 per day.

Not accepted at all exchanges

Purchasing Ethereum with a Credit Card (Coinbase)

Credit cards provide a fast, easy method of deposit and payment to use on cryptocurrency exchanges around the world. One such exchange that provides easy credit card deposits is Coinbase.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying Ethereum on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to coinbase to setting up your payment method and purchasing Ethereum.

HOW TO BUY ETHEREUM WITH DEBIT CARD

Purchasing Ethereum using a debit card is fast and simple, and oftentimes circumvents the hidden fees that can come with purchasing through a credit card – debit card purchases are viewed as cash purchases so they do not incur the same fees as credit cards.

Additionally, many banks that restrict credit card purchases allow debit card purchases to be made without the same restrictions. Make sure to check with your bank and/or debit card processor to ensure you’ll be allowed to make a debit card payment to purchase Ethereum.

Purchasing Ethereum with a Debit Card (Coinbase)

The process for buying Ethereum via a debit card on Coinbase is the same as purchasing via credit card, but without the worry of hidden fees associated with credit card transactions.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying Ethereum on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to Coinbase to setting up your payment method and purchasing Ethereum.

HOW TO BUY ETHEREUM WITH BANK ACCOUNT / WIRE TRANSFER

Purchasing Ethereum using a bank account is generally cheaper than other options.

However, wire transfers can often take several business days to process, making it a poor option for those looking to make purchases quickly. Further, wire transfers are often reserved by exchanges for their preferred customers who buy large amounts of crypto.

Purchasing Ethereum with Bank Account / Wire Transfer (Coinbase)

Coinbase also offers user the ability to purchase Ethereum through a bank account or wire transfer.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying Ethereum on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to Coinbase to setting up your payment method and purchasing Ethereum.

HOW TO BUY ETHEREUM USING AN ATM

With more and more consumers using bitcoin for everyday purchases, ATM machines have sprung up around the world, allowing Ethereum users to exchange fiat currency for Ethereum.

The best source for finding an ATM near you is to search on CoinATMRadar. You can search by cryptocurrency to find only ATMs that support Ethereum.

Pros - ATMs are a great way to purchase Ethereum for newbies who aren't yet comfortable using an online exchange that can be complicated or for those wanting to make a purchase quickly.

Cons - The downside is that they can be a more expensive option than buying on a larger exchange due to ATM fees plus the cost of travel to and from the ATM location.

Transactions can be completed in less than one minute and are very straightforward for the uninitiated. Also, if a user does not have an Ethereum wallet, most Ethereum ATMs will create a paper wallet for the user to take with them immediately after their purchase.

Fees from using an Ethereum ATM can run the gamut, but generally fall in the 5-10% range. It’s important to note that while most ATMs allow you to buy Ethereum with fiat currency, there are far fewer locations that allow you to turn your Ethereum into cash.

HOW TO BUY ETHEREUM ANONYMOUSLY

With the advent of third-party exchanges taking over the industry, it has become increasingly difficult to purchase Ethereum anonymously, without user identity information being made public.

An anonymous purchase of Ethereum means:

  • Ethereum is exchanged from seller to buyer with no personal info attached
  • Transaction is completed on a peer-to-peer network or in person, not through a third party
  • There is no history of the transaction that can be traced back to an individual identity
How to buy Ethereum anonymously (Ether / ETH)

There are hundreds of Ethereum exchange services popping up daily, claiming to offer anonymous Ethereum purchases. However, only a few actually allow for anonymous purchasing done on a peer-to-peer basis.

If you want to buy Ethereum anonymously we recommend LocalEthereum.com. Check out the following section for our user guide to buying Ethereum with cash, which you can also use to purchase anonymously.

HOW TO BUY ETHEREUM WITH CASH

When purchasing Ethereum on a peer-to-peer exchange like LocalEthereum.com, the crypto is transferred directly between users so the exchange does not ever hold the cryptocurrency, and it's not susceptible to a hack or theft.

Transactions can also be done anonymously between users and don’t require any personal information to be exchanged or a lengthy verification process, making it a quick and anonymous way to get crypto.

Conversations on the platform are also encrypted and cannot be viewed by anyone except the buyer and seller. Even LocalEthereum.com has no way of reading what is said during a deal.

However, using cash to purchase Ethereum via a peer-to-peer exchange will require more trust than with other methods. Although exchanges use security methods when possible, Ethereum that is not handled by a third-party exchange is at risk of user fraud.

Also, there is very little liquidity when it comes to cash purchases, and without an order book to fill open orders, you will have to scour a peer-to-peer exchange to find the best possible transaction for your needs.

How it Works

A direct peer-to-peer exchange with a 0.25% fee for sellers and 0.75% fee for buyers, LocalEthereum.com is an ideal place to purchase Ethereum with cash in the most anonymous, secure way possible.

LocalEthereum.com uses computer code to hold the money from the buyer in a separate account (escrow account) until it's confirmed that both people held up their side of the bargain, then the money is released to the seller of Ethereum. This is a welcome extra level of security.

Signup

Register with a username, password, and email address to get started.

You will be asked to comply with the LocalEthereum.com terms of service before completing your registration.

Next, you will be asked to check your email for verification of your registration. Click the link to verify your email address and finish your account registration.

LocalEthereum.com - email confirmation

Authentication

LocalEthereum.com makes two factor authentication (2FA) mandatory as a means of protecting your account. You can either have an authentication email sent to your email address (default option) or use Google Authenticator.

Payment Method

LocalEthereum.com does not provide the ability to make a fiat deposit directly on the exchange. You will have to use another method of payment to complete your transaction such as cash (in person), wire transfer, bank transfer, PayPal, Alipay, or WeChat Pay.

Note: PayPal is very risky as a seller due to 'chargeback fraud' where the buyer sends the money then calls PayPal to dispute the transaction. For this reason, finding a seller willing to accept PayPal is very rare.

Purchase Cryptocurrency

If you're looking to buy Ethereum for cash all you need to do is choose cash (in person) from the drop-down bar and then choose your location (US or worldwide). You can also type in your specific country and all the local sellers of Ethereum will be listed.

When you click the 'Buy' button on the offer you're taken to the order page where you can see the seller's reputation (make sure he looks trustworthy) and decide how much Ethereum you want to buy.

Once you click on the 'Open Trade' button a dialogue box between you and the seller will open up allowing you to decide on a time and place to meet.

IMPORTANT: Once you have locked in your trade by clicking 'open trade' make sure the right hand side of the page under 'state' says 'Ether is in escrow'. This means the seller has put the Ethereum into a protected account and cannot take it back until the transaction is completed or is cancelled.

Once you see the Ethereum is in escrow you can meet up with the seller to give them cash and then they will electronically release the Ethereum to you and it will show up in the wallet created for you by LocalEthereum.com.

HOW TO BUY ETHEREUM INSTANTLY

Another issue when buying Ethereum is the amount of time it takes to get up and running on an exchange.

A general process for purchasing Ethereum can go something like this:

  1. Register for an exchange
  2. Verify email address
  3. Update account with personal information
  4. Upload picture of government-issued ID and/or selfie picture holding ID
  5. Approval of ID verification, which can take up to a month or more depending on how busy the exchange is
  6. Deposit fiat currency
  7. Wait 1-10 business days for fiat processing time
  8. Purchase bitcoin with fiat currency

This process is by no means instant, and when all is said and done can take upwards of a month or more to complete. The longest piece of this process is verification for know-your-customer (KYC) and anti-money laundering (AML) laws, which are reported to the federal government.

There are, however, options to buy Ethereum instantly. Certain exchanges have found ways to instantize the lengthy process. If you want crypto fast it’s typically best to stick to exchanges that are from your home country since they’re more likely able to quicken the verification process.

Recommended Exchanges for Instant Ethereum

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