If you’re wondering how to buy Ethereum (ETH), we’ve put together this straightforward guide to help you.
The world of cryptocurrency can be complicated and fast-paced. Read on to find out how you can get involved and navigate potentially confusing terms without making mistakes.
What is Ethereum?
Ethereum is a decentralised blockchain network. The network operates using a cryptocurrency called Ether (ETH).
Most of the time, you will see the cryptocurrency simply referred to as Ethereum. This is actually the name of the network and not the digital currency itself. The terms are viewed as being interchangeable.
This cryptocurrency works differently to Bitcoin and is designed for a different purpose. The idea is for it to be a functional cryptocurrency with real-world applications like smart contracts. There are actually lots of different cryptocurrencies that are built on the Ethereum platform and network.
Where can I buy Ethereum?
Lots of places will advertise Ethereum, but it’s important to always use trusted exchanges or trading platforms.
Secure cryptocurrency exchanges offer the safest way to purchase Ethereum online. Some reputable exchanges for buying the cryptocurrency in the UK include:
It’s important to do your own research and find the exchange that suits you best. Some platforms are simple to use but have higher fees. Others can be cheaper but more complicated to wrap your head around.
How do I buy Ethereum?
The steps for buying Ethereum is quite similar in most instances.
1. Choose an exchange
Research and decide which platform you want to use.
2. Create an account
Once your account is verified, you will be able to deposit currency into your exchange account or buy Ethereum directly with a bank card (depending on the platform).
3. Allow time for your order to process
After making a purchase, it may take a while for the order to process. If you use functions like limit orders (where you set a maximum price you are willing to pay), buying could take longer.
4. View your balance
You should be able to see your balance in your exchange wallet once the order has been verified on the network.
5. Withdraw your Ethereum
Your Ethereum can be kept in your exchange wallet or, ideally, withdrawn to a more secure place for storage.
What about tax on Ethereum purchases?
Cryptocurrency used to be more of a wild west but there are increasing levels of regulation. This means that governments have introduced ways to tax cryptocurrencies like Ethereum.
When buying or selling Ethereum in the UK, it’s important that you fully understand any possible tax implications before trading.
There is now a capital gains structure in place for cryptoassets. Many people are not aware of the rules and how they work. It’s vital you have an understanding of how this framework could affect you and the rest of your finances.
Please note that tax treatment depends on the specific circumstances of the individual and may be subject to change in the future.
What else do I need to know about buying Ethereum?
Some places like eToro and Revolut allow you to buy Ethereum, but you do not get full control of your assets. So if you buy the cryptocurrency on platforms like these, you are essentially just buying a derivative.
Buying Ethereum on most apps that aren’t proper crypto exchanges means that you will not be able to move your cryptocurrency or do anything with it. So there are limits to what you can do, and you may not be able to store your Ethereum in a secure wallet.
Always take extra care when trading in cryptocurrency markets and remember that there are no safety nets or backstops.