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How to Buy Ethereum | Buy ETH in 4 Steps (February 2024)

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Ethereum (ETH) is an open-source distributed blockchain network that simplifies smart contract scripting. Importantly, the platform allows developers to streamline and build decentralized applications that function on blockchains. Consequently, the platform has introduced the world to a host of new functionalities and applications.

To learn more, visit our Investing in Ethereum guide.

How to Buy Ethereum (ETH) in 4 Steps

The whole process can take as little as 10 minutes, and all you'll need is a smartphone or computer, photo identification, and a means of payment.

  1. Compare Crypto Exchanges – We list the top cryptocurrency exchanges that offer the ability to buy Ethereum (ETH) cryptocurrency.
  2. Create an account – Verify your email address and identity.
  3. Make a deposit – Debit Card, Credit Card, Wire Transfer, or Bitcoin.
  4. Buy Ethereum – Use your funds to Buy ETH.

We list the top 7 exchanges that offer the ability to buy Ethereum (ETH) cryptocurrency with a credit card, debit card, or Bitcoin (BTC).

1. Uphold

A top exchange in the United States & UK, Uphold is an experienced and extremely innovative trading platform that should be able to meet your needs for trading across a number of cryptocurrencies including Ethereum (ETH). Beyond the ease of use and innovative features within the trading platform, what stands out about Uphold is the credibility it has gained in the industry.

Uphold offers both a desktop and mobile app trading experience that is extremely intuitive. The trading view is completely customizable with the assets that you trade the most and is very easy to navigate while providing a modern feel on both desktop and mobile. It is a very popular and suitable choice, particularly for new traders.

Besides being visibly appealing, the Uphold trading platform allows you to place your trades with great ease. Just a couple of clicks, and you can make trades directly from your deposit method without even having to wait for funds to clear to your account. This one-step ordering is another innovation from a company that prides itself on the usability of its platform. Uphold also provides the ability to execute limit orders.

Best of all they offer ETH staking opportunities.

German & Netherlands residents are prohibited.

For the full lowdown, see our Uphold review or visit Uphold to get started now.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

2. Kraken

Founded in 2011, Kraken is one of the most trusted names in the cryptocurrency industry with over 9,000,000 users and over $207 billion in quarterly trading volume.

From humble beginnings, Kraken now offers over 200 digital assets including Ethereum (ETH). For more sophisticated investors Kraken also offers futures and margin trading.

Kraken has continued to evolve its platform, and its commitment to the industry by being one of the first exchanges to offer buying opportunities on new tokens.

Kraken offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommended exchange for USA residents. (Excluding New York & Washington state)

Read our Kraken Review or visit Kraken.

3. KuCoin

KuCoin is a well-known name in the industry, and one of the most competitive when it comes to fees and trading costs. The exchange has grown exponentially from its early days of offering only crypto to crypto trading.  It now offers a varied range of services including a P2P exchange capability, and purchasing with credit or debit cards.

KuCoin currently offers Ethereum (ETH) cryptocurrency trading as well as over 300 other popular tokens.  It is often the first to offer buying opportunities for new tokens.

This exchange currently accepts USA residents.

Read our KuCoin Review or visit KuCoin.

4. Binance

Binance is one of the largest and most well-known cryptocurrency exchanges in the world. The benefits of purchasing Ethereum (ETH) here are both lower fees than competing exchanges, and increased liquidity enabling you to buy and sell quickly to take advantage of market-moving news.

This exchange is best for investors residing in Australia, Singapore & internationally. Canadian, UK & USA residents are prohibited.

Read our Binance Review or visit Binance.

Use Discount Code: EE59L0QP for 10% cashback on all trading fees.

5. Paybis

Paybis is designed for simplicity and is an extremely trustworthy starting point for buying Ethereum (ETH) and other cryptocurrencies.  This exchange has been operating since 2014 and has assisted numerous traders in beginning their crypto trading journey, offering the convenience of purchasing with just a credit or debit card.  Unlike other exchanges where you buy tokens from other users, with Paybis you purchase directly from the exchange, making the process much simpler and smoother.

Paybis is a truly global company offering services to residents from 180+ countries including Canada, Europe, UK, & USA.

The fees you will encounter here are good value and competitive with others in the sector depending on the payment method you use.

FinCEN Department of the Treasury, United States of America Money Service Business Registration: 31000224635628.

Read our Paybis Review or visit Paybis.

6. HTX

Established in 2013, HTX has since become one of the world’s largest digital asset exchanges, with an accumulated trading volume of US $1 trillion. Having once accounted for half of the world’s digital asset transactions, HTX now serves more than 5 million users in over 130 countries around the globe. It should be noted that HTX currently does not accept USA or Canadian residents.

HTX is one of the top exchanges that currently offer Ethereum (ETH) trading opportunities.

Read our HTX Review or visit HTX.

7. WazirX

Launched in 2018, WazirX is India’s biggest cryptocurrency exchange with over 6,o00,000 users, and is expanding rapidly. It is one of the most reputable exchanges to currently offer Ethereum (ETH) trading opportunities and currently accepts clients from all over the world. This exchange is part of the Binance Group, which ensures a high standard of quality.

USA residents are prohibited.

Read our WazirX review or visit WazirX

What is Ethereum (ETH)?

Ethereum stands out as a transformative force in the blockchain world, extending beyond just cryptocurrency. It's a versatile, open-source platform that revolutionized the creation and functionality of decentralized applications (DApps) through smart contract scripting. Ethereum's framework has opened up new horizons for blockchain functionality, leading it to become a cornerstone in the crypto market.

What does it do?

Built using blockchain, Ethereum utilizes smart-contracts, allowing for the ability to run applications atop its protocol.  Its native token, Ether, also acts as a currency, providing its holders with an easy means for transferring value.

Various implementations of Ethereum’s capabilities have been attempted throughout the years.  One of the most promising examples includes applications surrounding Decentralized Finance (DeFi).  This sector entails a series of financial-based applications based on blockchains, like Ethereum.

How Does Ethereum (ETH) Work?

While sharing some foundational principles with Bitcoin, Ethereum introduces unique features and a different approach, particularly in its consensus mechanism. Unlike Bitcoin's pure Proof of Work (PoW) system, Ethereum has transitioned towards a Proof of Stake (PoS) model with its Ethereum 2.0 update. This shift aimed to enhance network efficiency and scalability.

Furthermore, Ethereum incorporates elements from peer-to-peer networks to foster a genuinely decentralized environment, ideal for developing decentralized applications (DApps).

Ethereum: Platform vs. Cryptocurrency

A common misconception is to conflate Ethereum with a cryptocurrency. In reality, Ethereum is an extensive blockchain platform, and Ether (ETH) is its native cryptocurrency.

Ether plays a crucial role in the ecosystem, primarily used to remunerate validators for executing operations and securing the network, especially in the context of the Ethereum Virtual Machine (EVM) computations.

Ethereum Virtual Machine (EVM): The Core of Ethereum

At the core of Ethereum's functionality lies the Ethereum Virtual Machine (EVM). EVMs are embedded in every node of the Ethereum network and are instrumental in simplifying the development of decentralized applications. They serve as a robust and secure runtime environment for executing smart contracts.

Every node within the Ethereum network operates an instance of the EVM, enabling a decentralized consensus on the execution of code. This setup ensures that all nodes in the network can independently and reliably execute the same instructions, facilitating a trustless ecosystem where code can be run without centralized control.

The EVM is a Turing-complete system, meaning it has the capability to execute a wide array of computational operations, similar to languages like JavaScript. This Turing completeness allows for the creation and execution of complex smart contracts and decentralized applications.

Support for Multiple Programming Languages

One of the standout features of the EVM is its compatibility with various programming languages. Developers can write smart contracts and DApps using popular languages such as C++, Java, JavaScript, Python, and Ruby. Ethereum also introduced its unique programming language, Solidity, specifically designed to create smart contracts. Solidity is object-oriented and high-level, tailored to the Ethereum blockchain's nuances. Regardless of the language used, the code is ultimately compiled into EVM bytecode, making it executable on the Ethereum network.

Ethereum's innovative approach, especially with its evolving consensus mechanism and the versatility of the EVM, distinguishes it from other blockchain platforms. It's not just a cryptocurrency but a comprehensive platform enabling a decentralized digital economy and diverse applications.

Consensus Mechanism

For years, Ethereum had planned a transition from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism – an update known as Ethereum 2.0. This shift brought considerable improvements in terms of energy efficiency, as PoS systems require substantially less electricity than their PoW counterparts. The transition also aimed to address scalability and energy consumption concerns associated with the traditional mining model.

Staking in PoS: In PoS, network participants “stake” their ETH tokens in a network wallet, contributing to the network's security and transaction validation process. The likelihood of a participant being chosen to validate a block correlates with the amount of Ethereum they have staked. This method not only reduces the need for extensive computational power but also adds a layer of security; potential attackers would need to own and stake a significant amount of ETH, making any attack economically disadvantageous.

Security and Sustainability: The PoS model is viewed by many experts as a natural evolution in the blockchain space, offering a more sustainable alternative to the traditional PoW approach. By requiring participants to have skin in the game, PoS also encourages more responsible participation in the network's maintenance.

What is GAS?

Gas in the Ethereum network is a fundamental concept representing a unit for measuring the computational effort required to execute operations, such as transactions and smart contract executions. It functions as an internal pricing mechanism, crucial for maintaining the network's integrity and efficiency.

Gas: The Fuel for Ethereum's Engine

  1. Role of Gas: Gas serves as a metering unit for computational work on the Ethereum blockchain. It's used to allocate resources of the Ethereum Virtual Machine (EVM) so that every operation, from simple transactions to complex smart contract executions, is adequately compensated.
  2. Quality Control: By quantifying operations in terms of gas, Ethereum ensures the quality of code executed on its network. This system discourages inefficient or malicious code, as such code would require a prohibitive amount of gas, making it uneconomical to execute.

Setting Gas Prices and Limits

  1. Gas Limit: This refers to the maximum amount of gas a user is willing to spend on a transaction or smart contract execution. It acts as a safeguard against running into unexpected execution costs. More complex operations require a higher gas limit due to the increased computational work.
  2. Gas Price: Users specify the gas price in gwei (1 billionth of an Ether). It's the amount a user is willing to pay per unit of gas for their transaction to be processed. Miners prioritize transactions with higher gas prices, as it's more lucrative for them.
  3. Transaction Cost Calculation: The cost of an Ethereum transaction is determined by multiplying the gas used by the gas price. Although gas quantities are calculated internally, the actual transaction fees are paid in Ether.

Economic Incentives and Network Efficiency

The gas system in Ethereum creates a market-driven, self-regulating ecosystem. Users are incentivized to offer competitive gas prices to have their transactions processed promptly, while validators are incentivized to process transactions with higher gas prices for greater rewards. This mechanism ensures that resources are allocated efficiently within the network.

Balancing Network Load

By requiring gas for transactions and smart contract executions, Ethereum balances the network load. Transactions consuming excessive computational resources are naturally limited by higher gas costs, preventing network congestion and abuse. This balance is crucial for maintaining Ethereum's performance and scalability.

Overall, Gas in Ethereum is a critical component that ensures the smooth operation of the Ethereum network. It provides a flexible and efficient way to measure and compensate for computational efforts, aligns the interests of users and validators, and maintains the quality and security of the network. As Ethereum continues to evolve, the role of gas will remain pivotal in its ecosystem.

Underlying Ideology?

Nearly from the onset, Ethereum was meant to be a non-profit endeavor.  This remains true to this day and has played a role in its regulatory acceptance.

Many view Ethereum as striving to achieve the ‘Internet 2.0’; A platform that eliminates the need for centralized operations, bringing democracy, and security, simultaneously to our data needs.  In doing so, Ethereum is, essentially, giving power over data back to the user.

History of the Network

Ethereum began its journey in the early days of the crypto market. In 2013, programmer and Bitcoin enthusiast Vitalik Buterin introduced Ethereum through a whitepaper. This document detailed a novel concept: a decentralized, global computer operating on blockchain technology akin to Bitcoin. Buterin's idea was revolutionary at the time, proposing a platform that could run programmable smart contracts and applications beyond mere financial transactions.

The Inception and Evolution of Ethereum

  • Early Development: Buterin, with assistance from the Swiss development firm GmbH, completed Ethereum's initial version by 2014. This development phase culminated in a highly successful Initial Coin Offering (ICO), raising $18 million and establishing a robust network of Ethereum miners and investors.
  • Initial Launch – Frontier: 2015 marked the release of Ethereum's first beta version, known as “Frontier.” This release significantly influenced Ethereum's market value and laid the foundation for future upgrades.
  • Homestead – The First Major Upgrade: In 2016, Ethereum underwent its first major upgrade, dubbed “Homestead.” This period also saw the emergence of Decentralized Autonomous Organizations (DAOs), innovative entities leveraging Ethereum's technology to automate decision-making and operations entirely via smart contracts.

The DAO: Ambition and Challenge

  • Launch and Record-Breaking Crowdfunding: Ethereum's first DAO was launched on April 30, 2016, quickly becoming a landmark in blockchain crowdfunding by raising over $150 million, a record at the time, with participation from over 11,000 investors globally.
  • The DAO Hack: The initial success was short-lived as a critical vulnerability was exploited by hackers in June 2016, leading to the theft of 3.6 million ETH. This event caused a significant drop in Ethereum's value and exposed the risks associated with smart contract-based systems.

Ethereum's Fork: A Controversial Decision

  • Dealing with the Hack: Ethereum's community and developers debated solutions to reclaim the stolen funds in response to the DAO hack. A key proposal was to implement a ‘soft fork' that would blacklist the hacker's address. However, this idea was soon overshadowed by a more radical approach – a ‘hard fork'.
  • Soft Fork vs. Hard Fork: In the crypto world, a soft fork is a backward-compatible upgrade, whereas a hard fork is a non-compatible upgrade that can result in a split blockchain. Ethereum's team proposed a hard fork to revert transactions to a state before the hack, an unprecedented move in blockchain history.
  • Community Split and Ethereum Classic: The hard fork proposal was contentious, challenging the blockchain principle of immutability. Despite opposition, the hard fork was executed on July 20, 2016, effectively splitting Ethereum into two blockchains: the original (now Ethereum Classic) and the new version (Ethereum).

The Aftermath and Ethereum's Resilience

  • Market Recovery: Despite the controversy and challenges post-fork, Ethereum managed to recover and strengthen its market position. By 2017, the value of Ether surged, reaching an all-time high in January 2018.
  • ERC Protocols and Token Standards: Ethereum's introduction of ERC protocols, particularly ERC-20, was a game-changer, simplifying the process of creating new tokens and smart contracts on its platform. This development led to a surge in Initial Coin Offerings (ICOs) in 2017, substantially contributing to the cryptocurrency sector's growth.

Today's Ethereum Landscape

As it stands, Ethereum is a dominant force in the crypto market, known for its innovative approach to decentralized applications and smart contracts. The platform's adaptability, demonstrated through its evolving technology and response to challenges like the DAO hack, continues to keep it at the forefront of the blockchain space. Ethereum's influence is evident in the widespread use of its ERC token standards, underpinning a vast array of digital assets and decentralized applications.

Regulation?

Unlike most cryptocurrencies, Ethereum has received endorsement from various high-ranking regulatory officials in the United States as NOT being a security.

Ethereum presented an interesting case, as regulators noted that, although the asset may have begun its life as a security, it has since evolved beyond that classification.  This is due to a lack of centralized oversight, and its ability to function autonomously with no direct benefactor.

This classification, however, may be precarious in the coming months.  With an announced transition to POS, officials from the CFTC have noted that providing the ability to ‘stake’ tokens may result in being classified as a security.

Daniel is a big proponent of how blockchain will eventually disrupt big finance. He breathes technology and lives to try new gadgets.