How do I buy Ethereum?

Buying ethereum is very simple. There are basically three ways to obtain ethereum. Either you become a miner, you work for your coins, or you buy ethereum. This article lists the different ways to buy ethereum.

Ethereum Storage

Before you buy ethereum, you should think about storing your ethereum.

Although the ethereum blockchain is inherently immutable and resistant to cyberattacks, centralized exchanges and brokers are not one hundred percent protected from them. Exchanges usually use an integrated Ethereum wallet that is connected to the Internet and therefore exposed to some risk.

In addition, you are not really in possession of your ethereum, as the exchanges and some brokers keep the private keys for you.

While you don't necessarily need an additional wallet for smaller amounts, it is recommended to use an external solution, such as a hardware wallet, for larger sums. Protecting your own ethereum should be a top priority.

> Learn more about the different Ethereum Wallets.

Ethereum Broker

Exchanges and brokers are the most popular trading places for people who want to buy ethereum.

A broker is a company or individual that acts as a financial intermediary between people who want to exchange money for products or services.

Brokers are best suited for beginners who want to buy ethereum easily and simply. The exchange of fiat currency for ethereum and vice versa takes place between the buyer or seller and the broker.

Buying and selling ethereum through a broker offers users a number of advantages. Here, ethereum can be bought and sold at the prices set by the broker. Using a ethereum broker is also suitable if you want to start with a small amount.

Ethereum Exchange

If you are interested in trading ethereum directly with other buyers and sellers, you should consider using an exchange.

An exchange provides buyers and sellers with an online platform through which they can exchange ethereum with each other for other cryptocurrencies as well as fiat currencies at current market prices.

The exchange of fiat currencies and ethereum takes place directly between buyers and sellers. The exchange, as the operator of the platform, charges additional trading fees in this exchange.

Ethereum exchanges are suitable platforms for users who are already advanced traders, are familiar with order books and want to profit from price fluctuations through short-term speculation.

Ethereum OTC Desk

OTC desk refers to the trading of so-called «over-the-counter» trades, and is therefore also known as off-exchange trading. Here, a transaction is settled directly between two market participants without an exchange being involved as an intermediary. In this case, the trade is executed outside the exchange order books.

OTC desks focus on trading larger quantities of ethereum. For example, between large sellers, such as miners, and buyers, such as a wealthy individual, company, or hedge fund.

Since the exchanges usually lack the liquidity for large trades, such off-exchange trading via OTC desks attempts to avoid short-term price fluctuations and market manipulation.

Peer-to-Peer Platforms

Alternatively, ethereum can be purchased directly from other market participants. This allows for greater anonymity, as no personal data needs to be deposited in the process.

A peer-to-peer platform connects ethereum buyers and sellers within a specific geographic region. Users can conduct peer-to-peer trading of ethereum for fiat money, by mutual agreement, either in person or over the Internet.

In the early days of ethereum, this was one of the few ways to buy or sell ethereum. Today, however, this method is a less common one due to the fraud and security risks associated with buying ethereum from untrusted sellers or interacting with people in person.

Ethereum ATMs (Automated Teller Machines)

Ethereum ATMs provide a way to buy ethereum in a physical location. These vending machines often require you to scan an ID to meet compliance obligations (KYC). The buyer then inserts cash and provides the machine with a ethereum address to which they wish to receive ethereum.

Ethereum ATMs typically charge a significant premium in fees over other purchase options.

> Learn more about KYC Light.

Ethereum Derivatives

Derivatives are tradable securities that derive their value from an underlying asset such as stocks, currencies, commodities, and ethereum. The most common types of derivatives are futures and options.

In derivatives, the investing individuals do not acquire Ethereum itself, but speculate on its price movement. This is possible both on profits and losses.

Ethereum ETFs

A ethereum ETF is an exchange-traded fund that tracks the price of ethereum. Investing in a ethereum ETF allows individuals to invest in the price of ethereum without having to invest directly in the currency.

Since the investing individuals do not own ethereum, they do not have to worry about managing or storing it.