Ethereum and Ether defined
Ethereum is an open-source blockchain available for people to construct solutions upon. The network enables basically anyone to build decentralized apps (DApps) and generally use the network, with Ether (ETH) being a key part of the process.
Ether is Ethereum’s native cryptocurrency that enables all operations on the Ethereum blockchain. A variety of methods exist for obtaining Ether, many of which are detailed in this guide.
How to buy Ethereum?
To purchase ETH, follow the steps as discussed in the sections below.
Choose a cryptocurrency exchange
Perhaps the easiest and most popular way of buying ETH is through a crypto exchange. Ether is the second-largest cryptocurrency by market cap behind Bitcoin, so finding an online crypto exchange that operates within your jurisdiction and trades in ETH should not be too difficult.
First of all, you will need to pick an exchange that allows customers from your region and then register with that exchange. Make sure to research your chosen exchange. Check its validity and whether or not it accepts the currency with which you wish to trade. The registration process may vary depending on the exchange and your region.
Some exchanges require significant personal information and identification documents, while others require much less. Exchanges that initially require less information for account creation, however, will often require additional information to unlock certain activities such as expanded withdrawal limits. This information is gathered in compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. After passing all the necessary checks, you will need to choose a deposit method. Depending on the exchange, various methods exist including bank wire transfers, credit and debit card payments and Single Euro Payments Area (SEPA) transfers.
Deposit and withdrawal fees may vary depending on the type of transfer and the exchange used. Fee details can often be found in the footer of an exchange’s website. Googling an exchange’s name in combination with the word “fees” may also prove helpful in finding exchange fee details.
Decide how to buy and place an order for Ethereum
For buying ETH, you must connect your bank account or debit card to fund your account. Fees will most likely vary depending on the option you choose. Moreover, exchanges vary as far as which currencies they allow for transfer. Some exchanges facilitate fiat currency transfers, such as United States dollar and euro transfers, as well as crypto asset transfers, while other platforms may only allow crypto-asset transfers. Deposit and withdrawal times vary depending on the method used and the asset transferred.
As soon as the funds are in your exchange account, you can start trading. You'll be able to trade your USD for Ether after your account has been filled. Simply enter the dollar amount you want to swap for ETH. Depending on Ethereum's pricing and how much you wish to buy, you'll most likely be buying shares of a single ETH currency. Your purchase will be displayed as a percentage of a total Ether. The user-friendliness of this process depends on the particular exchange, with many of them striving to make the process as easy as possible. You can see various amounts of valuable information such as current value and related news on your exchange’s website. Once you’ve obtained Ether, you may wish to withdraw it to a wallet of your choosing off the exchange.
Store your Ethereum
It's easier to leave your crypto investment in your exchange account if you only have a small quantity. However, if you wish to shift your holdings to a safer storage location, a digital wallet can provide extra security. There are numerous types of digital wallets, each with varying levels of protection. Choose wisely.
How to Sell Ethereum?
Once you’ve accumulated some Ether (ETH), the native coin of the Ethereum blockchain, through buying the tokens or mining them, there will probably come a time when you’ll decide to sell.
Do I need to sell?
Selling your ETH lies at your own discretion barring any regulation that comes into play that may change the situation around the asset. You may have a specific price goal in mind at which you wish to sell your ETH for profit, or you may simply be fine with holding indefinitely and seeing what happens.
Some traders and investors utilize specific strategies for their crypto involvement and profit goals. Buy-and-hold investing essentially entails buying assets and holding them for a considerable period of time before offloading them. Essentially, all you need to do is purchase Ether coins, store them in a safe place, such as an Ethereum paper wallet, and decide when you wish to sell them.
Selling on centralized crypto exchanges
The process of selling Ether on a centralized crypto exchange works similarly to buying it.
First, you need to choose an exchange hosting Ether trading that operates within your jurisdiction and set up an account with it. You will likely be required to provide varying amounts of personal information such as your date of birth, address and a government-issued photo ID. Once you’re all set up, you will need to choose between selling your Ether for fiat currency (USD, EUR, JPY, etc.) or trading it for a different cryptocurrency.
Exchanges have specific wallets and addresses for your various crypto assets on the platform. Simply navigate the website in search of a “sell,” “deposit” or “deposit into exchange” button. Upon clicking on one of those buttons, you will find your wallets and their corresponding addresses. Some tokens are built on other blockchains, for example, the ERC-20 tokens are built on the Ethereum blockchain. Be sure to check the compatibility of the wallets you are using for any given transaction. Send the desired amount of Ether from your holdings — held in a self-hosted wallet, for example — to your Ethereum address on the exchange. The time required for the transfer to confirm may vary depending on chosen fees and the traffic on the Ethereum blockchain at the time.
Once your Ether is confirmed and arrives in your wallet on the exchange, you can set how much of it you’d like to sell and choose the currency you’d like to receive in return. On most centralized crypto exchanges, this can be achieved through a limit or market order.
A limit sell order posts the amount of a crypto asset you wish to sell at a specific price level. The order is then filled if the market reaches that price and if a buyer on the exchange picks up the order. In contrast, a market sell order sells your chosen amount of a given asset at the highest price (for which other limit orders already exist) on the trading exchange. The exchange rate is normally calculated automatically based on the current market rate, the size of the transaction, or other variables.
Once the trade is complete, the funds — no matter fiat or crypto — will appear in your account. If you opted to sell your Ether for any of the traditional currencies, you will then have an option to withdraw the funds into your bank account.
Alternatively, if you’d prefer to sell your ETH directly to another entity, there’s an option to sell in a peer-to-peer (P2P) fashion: in-person or online via a platform. Online crypto P2P platforms are essentially marketplaces where users can place and respond to offers. These platforms typically involve sellers posting certain crypto assets for sale and listing details such as their desired price and payment method.
Escrow features on such platforms generally help the process operate more smoothly with minimal risk. In the crypto industry, an escrow essentially locks up funds in a neutral location, typically via a smart contract, during a multi-party deal. The funds are then unlocked once obligations have been fulfilled by the involved parties with the assets paid out accordingly. An Ether holder may also wish to sell his or her ETH to a friend or family member in person.
Whatever the method, be sure to check and comply with local regulations. Additionally, it is essential to exercise caution when conducting financial transactions with others online or in person. Knowing your way around crypto wallets and platforms and how crypto transactions work is also vital for conducting in-person and online crypto transactions.
Active trading is a strategy that involves a deeper immersion into the market and requires a lot more time, knowledge and experience than buy-and-hold. Active trading means regularly keeping up with price action and related industry happenings to not miss the profitable buy and sell opportunities. These opportunities can be based on a number of factors used individually or combined such as charting or news. Active traders also must use self-control and avoid acting on emotion or impulse. Additionally, significant knowledge is necessary to know when to enter and exit positions, and risk management is needed for consistently profitable trading over a long time horizon.
If you’re opting for active trading, you are essentially speculating on Ether’s price, which means you will need to monitor the market and price fluctuations daily, if not hourly, depending on your chosen strategy. Related news articles, announcements and opinions may also be helpful to read as an active trader, since those can influence asset prices. At its simplest, a crypto asset’s price is determined by supply and demand. News can make an asset more or less attractive to holders or potential buyers, impacting this dynamic and causing rise or fall in an asset's price.
Transacting Ethereum safely
One of the most important aspects of the Ethereum network is that transactions are irreversible. Therefore, be sure to never type an address by hand, as it is essentially a very long case-sensitive string of random letters and numbers. A single mistake can lead to your funds disappearing forever. Make sure to double-check all the details before confirming a transaction.
Avoid storing a large amount of Ether in wallets provided by exchanges. Since an exchange is essentially in charge of your wallet, loss of funds is not impossible, and this may occur due to a hack or even an exchange’s fraudulent activity. Self-hosted wallets provide more control over stored funds. If you’re intending on storing large amounts of Ether, consider investing in a hardware wallet.
Implement extra safety steps where possible such as two-factor authentication and so on. Finally, always remember to guard your backup seed phrase, and remember that, although self-hosted wallets provide greater freedom, they also come with added responsibility and required knowledge.