Irrespective of your cryptocurrency investment goals or how well your coin portfolio is diversified, you must begin from somewhere. That means before you even start investing, you have to obtain coins and there are several way of doing so.
Exchanges are the best and proven way of owning some. However, it is important to distinguish between those who offer BTC for fiat, called Bitcoin Exchanges and those who avails BTC and a wide range of other alt coins for fiat/coins called cryptocurrency exchanges.
A Little Bit about BitFinex
BitFinex for example is a cryptocurrency exchange. The thing is, this exchange is a go to platform for ambitious traders who want to flip the market for a profit and enjoy cheap fees ranging from 0.1%-0.2% while at it.
BitFinex is a 4 year old company owned by iFinex and is the world’s largest exchange by trading volumes but it has been hacked and directors summoned by US courts. Interested investors can open an individual account while registered companies can open corporate accounts. Depending on your trading style, these accounts are complemented by margin, exchange and funding wallets each customized according to a trader’s preference.
Then there is CoinBase. This exchange is very specific with its dealing and last year alone, it registered $1B in revenue after on boarding 100K new users every month beginning June 2017. If you remember well, that’s just before most cryptos peaked by Q4 2017.
CoinBase is perhaps the only exchange that has not being hacked. They claim that they store most of their client’s coins in a multi-sig cold wallet. However, note one thing. Their services are limited to certain jurisdictions and once you purchase your ETH for example, they retain control of the coin’s private keys. As a crypto investor, you can go ahead and open an individual account.
Now, before we proceed and purchase some ETH, know that most banks don’t allow purchase of volatile cryptocurrencies using credit cards. In fact they banned it completely with JP Morgan Chase and Lloyd Banking Group in the US and UK spearheading this drive.
How to Buy Ethereum from CoinBase
Of course, there are other exchanges out there but this is how you can buy ETH once you open an account with CoinBase:
- Login and verify your phone number. This is mandatory
- Link your bank and CoinBase accounts and purchase your ETH
It’s that simple
Where do you store your Ethereum?
Once you make a purchase, CoinBase will deposit all your purchased ETH to your CoinBase ETH hot wallet.
A wallet is basically a client’s software. It is an interface where you can access the coin’s decentralized network as you store your coins. All wallets are secured by a private key, think of it as an email password. They also have a public key, which can be compared to a public email address.
Often it is recommended that purchased coins irrespective of the company’s are transferred to approved and publicly backed wallets. There are two types of wallets. Cold wallets which are off grid, suitable for large storage of coins. It is considered safe from hackers and most are sold by accredited vendors in Amazon.
On the other hand, hot wallets are free third party apps connected to the internet. Hot wallets are recommended for individuals who often transact.
Of the two, cold wallets like Ledger Nano S are the safest as they are hacker and malware proof.