With the price of Ethereum on the rise, a popular question is, “How do I buy Ether?”
For first-timers, it may seem a little tricky to buy Ether. Hopefully, my simple instructions will help you get through the process and simplify things a bit. I know it’s not as easy as going out and buying a car (although that can sometimes be a bit complicated, in and of, itself). But here is my experience and step-by-step guide.
Step 1: Pick the right exchange for you.
Picking the right exchange for you is a good way to start. It’s all based upon what’s important to you. Be sure to look at their security and privacy protections, the virtual currencies they support, and if the site navigates the way you like. Once you have chosen an exchange, it’s time to make a deposit.
Step 2: Make your deposit
Deposits depend on the type of currency you want to use. For USD and other fiat deposits, certain exchanges require your bank information for an ACH deposit. These deposits take up to 3-5 business days to be available in your account. Other exchanges accept bank transfers and credit cards if you don’t want to directly withdrawal from your bank. Again, this depends on your preference of security. I prefer ACH deposits on the exchanges that accept them, not only for their protection of my information, but mainly for its simplicity.
For virtual currencies, you simply send the funds from either your wallet or another exchange by copying the deposit address into the “Send” bar. I personally prefer the exchanges that allows me to scan the QR code with my mobile device. Depending on which exchanges and the amount of confirmations need, your deposit will not appear for approximately 15-60 minutes.
Step 3: Make your purchase.
When your funds are in your account, you’re ready to purchase your Ether. Head on over to the exchange page and select the trade you would like to make. For example, if you want to trade bitcoin for Ether, you would choose ETH/BTC. The same with DAO and USD, you would choose ETH/DAO and ETH/USD, respectively. The exchange will give you the price of Ether as well as your current USD amount in order for you to keep track of your trade.
Step 4: Pay attention to purchase tabs.
One thing to pay attention to are the “Market”, “Limit”, and “Stop” tabs when buying Ether. These tabs determine which price you’re using to buy Ether. For beginners, “Market” is the best choice as you will buy the virtual currency at its best current market price at the time of the order. Let’s say the market price is $14.43 and you want to buy five Ether tokens, your total would be $72.15 not including the 0.1-0.3 percent fee.
However, there will be some occasions when all your funds will not go through right away with a “Market” purchase. Let’s say you purchase 100 Ether at the price of $14.56, but only 43 are available at that time. The rest of the 57 tokens will not be confirmed until they are available. This means that you may not be purchasing those Ether tokens at that current listed price of $14.56. Depending upon when those tokens become available to you, you may be paying for the Ether below or above the original market price, due to their value at that time. My suggestion for this would be to test out the market with a handful of tokens, such as 10 or 20. If you notice an instant purchase, either continue with the rate you are at or increase the amount.
For those who want to experiment, click on “Limit”. In a similar case of the “Market” price, I usually test a small amount first on every exchange I use. In my opinion, it’s better to test the market of the exchange than to check on the volume of the currency. (But again, this is just me.)
This tab is for users who want to buy at a low price without having to sit around and wait for the price drop. First, enter a specific price you want to purchase your coins for, as well as the amount. For instance, if you wanted to purchase coins below the market price ($14.43), you would enter that price ($14.00). Please note, this transaction will not go through until your set price meets the market price. After you confirm the transactions, your coins will immediately show up in your account.
The “Stop” tab is for users to place a stopping price during their purchase. Upon buying your Ether, you enter in the amount of tokens you want, as well as the price you wish to stop the purchase. For example, you want to buy 10 Ether between the market prices of $14.50 through $15.00. You would enter $15.00 into the price slot to prevent you from buying Ether at a higher price.
Step 5: Storing your Ether.
Depending on your preference, you can either keep your Ether in the exchange’s built-in wallet or you can store it in any of the Ethereum-supporting wallets available.
And… there you have it. This is how I did it, but please let me know if you have other suggestions. Please comment if you have any additional questions about buying Ether in general, or on any specific exchanges.