How to Buy Ethereum in the UK

By Steven Wright – www.stevenwrightinvestment.com

Ethereum (ETH) is the name of the blockchain platform that supports the cryptocurrency Ether. The term “Ethereum” refers to the cryptocurrency and the platform, while the term “Ether” refers to the individual unit. It is one of the largest cryptocurrencies, second only to Bitcoin.

Buying Ethereum is similar to buying other cryptocurrencies: you need to determine your risk tolerance, find the right crypto exchange, and fund a valid account before you can buy into it.

It is imperative that you take time to research and understand Ethereum and the process of investing in it to make an informed decision. It is also important to remember that cryptocurrency investment is always speculative and the trading is unregulated in the UK, meaning compensation is not available if anything goes wrong.

How Ethereum Functions

The Ethereum network is used for decentralised finance (DeFi), operating on an open-source computer network, also referred to as a distributed ledger or a blockchain. It allows peer-to-peer transactions with no centralised third party and gives users full ownership of their transaction data.

It does this via smart contract execution. Lines of code that detail buyer-seller agreement terms are compiled into bytecode to be executed and then appended to the blockchain and automatically verified.

How to Buy Ethereum in GBP: Step-by-Step Guide

Buying ETH is a relatively simple process and is much the same as investing in other cryptocurrencies. Below is the standard process to follow, especially if you are looking for how to buy Ethereum on Binance and other popular exchanges:

1.      Determine Your Risk Tolerance

Doing your research is the most important step: do not buy Ethereum unless you have a good knowledge of the market and the risks. Cryptocurrencies are constantly fluctuating in price and the risk of losing capital is always present. Consider how much you can safely lose before you invest in Ether; never invest more money than you can afford to lose.

2.     Choose Your Cryptocurrency Exchange

Buying any cryptocurrency involves a crypto exchange, as they are not available on major stock exchanges or brokerage platforms. A crypto exchange is a dedicated online platform that works in the same way as a brokerage platform, where you need to create an account before you can buy and exchange. You can exchange fiat currencies like GBP and USD for cryptocurrencies.

Popular crypto exchanges are Binance, Coinbase, and Gemini. Creating an account involves fulfilling Know Your Customer (KYC) requirements: you must submit an address, date of birth and email address.

If you are a beginner, you may like to make use of a crypto broker, which is a simple interface that interacts on an exchange on your behalf. These usually cost more and restrict the movement of cryptocurrency but are very convenient.

3.     Fund Your Account

Once you have created your account and verified your identity, you need to deposit funds. You can link your existing bank account or you can deposit money by making a direct credit card payment.

4.    Purchase Ethereum

Cryptocurrencies like Ethereum can be bought and sold around the clock, unlike centralised exchanges like the London Stock Exchange which operate on standard market hours.

Go to your exchange’s “buy” field and enter the ticker symbol of Ethereum (ETH) and simply put in how much you want to buy. You can actually purchase a fraction of a coin if you do not have enough for a full one.

5.     Choose Your Storage Method

Once you have successfully bought Ethereum, you need to store it. Some platforms will store your Ether for you, but can be susceptible to hacking. For the best peace of mind, choose a third-party crypto wallet. A wallet is a device that stores your private keys, which is how you access your currency.

Choose between a:

• Hot wallet: this is a wallet with an internet connection, accessible from other devices with internet connection. Their main advantage is their convenience, but can be susceptible to security risks and hacks because of their online connection.
• Cold wallet: these crypto wallets are not connected to the internet. They can be hard drives or USB drives and are more secure since they cannot be hacked. However, they are at risk of being physically lost or stolen.

How to Buy Ethereum on Coinbase

Coinbase lets you buy Ethereum in a simple process similar to the above:

• Download the Coinbase app and sign up for your account, remembering to have valid ID to hand
• Connect a payment method
• Press the ”trade” button and then press “Buy”
• Find Ethereum and select it to open up its purchase screen
• Input the number of GBP that you want to spend on Ethereum and the app will convert this automatically for you

How to Buy Ethereum on MetaMask

MetaMask is an app that specifically supports Ether and all types of ERC-20 tokens (wrapped Ethereum). You just need to import or connect your wallet then simply press “Buy ETH” on its home screen within the app. You can use fiat currencies on your credit card or by using bank transfer and convert to ETH.

The transaction will process and be appended to the Ethereum blockchain, and then your account’s balance will update a few minutes later.

How to Buy Ethereum with PayPal

PayPal enables you to easily buy Ethereum, as long as you have a faded account. One thing to note is that PayPal will not let you withdraw your Ethereum assets into a third-party wallet, so you can only buy and sell with it through PayPal. Essentially this means that you cannot use it as a decentralised peer-to-peer financial system.

What Is the Difference Between Ethereum Classic and Ethereum 2.0?

Ethereum Classic and Ethereum 2.0 are both products of the same blockchain, with the latter being more popular. Both are operational but Ethereum 2.0’s price and market cap have overtaken the Classic version. Conduct research into each before you decide to invest, as both have positives and negatives and different ways of operating that work for different investors.

Why Ethereum Is So Popular

As cryptocurrencies go, Ethereum is incredibly popular. It offers a way to complete transactions with independence and ease. The smart contract capabilities are a big attraction for investors, powering decentralised applications (DApps) and None-Fungible Tokens (NFTs). This versatility means more people invest and its value increases. As such, many consider Ethereum a sound long-term investment with the potential for good returns.

However, cryptocurrencies are notorious for their volatility and lack of backup from hard assets and cash flow. It is crucial that you understand the risks and have your established risk tolerance in place before buying. As with any investment, putting in more than you can afford to lose is never a good idea. Make sure you research thoroughly and seek professional financial advice if you are unsure.