Key Points
- Ethereum was founded by programmer Vitalik Buterin in 2015, an early proponent of Bitcoin.
- Ethereum’s unique use of smart contracts has made crypto viable and usable outside the realm of decentralised finance.
- Ethererum is the first crypto project to introduce the concept of decentralised applications (DApps).
- Although ETH is widely available on exchanges, there can be some hurdles to jump through to acquire it. Caleb & Brown has simplified the process by buying and trading ETH down to 4 easy steps.
What is Ethereum?
Ethereum: The World Computer.
Originally envisioned as an offshoot of Bitcoin, Ethereum has grown to become the second largest crypto asset, with applications that reach far beyond finance.
Like Bitcoin, it’s globally accessible, allowing anyone to use digital money without the need for payment providers or banks. But there is one major difference between both blockchains.
Ethereum is programmable. You can use it for many different digital assets—including Bitcoin. This is one of the many reasons why some consider the network as a computer for the world.
Ethereum was founded by programmer Vitalik Buterin in 2015, based on an idea he conceived two years prior. Like Bitcoin, his first crypto interest, Ethereum is an open-source blockchain that validates and records transactions. Beyond this one similarity though, the two networks are quite different.
Ethereum empowers users to take an active role in the growth of Web3. It is a space for developers to create and publish decentralised apps (DApps). It is also a marketplace for users to access decentralised finance (DeFi) services, games, apps, and non-fungible tokens (NFTs).
This is all done through Ethereum’s killer program: smart contracts.
These digital contracts simplify trade between parties, auto-executing the terms of an agreement without the need for an intermediary. The use of smart contracts, especially on the Ethereum network, has opened up a world of possible use cases for crypto.
Ether (ETH) is the native cryptocurrency on the Ethereum network. You may hear the two names used synonymously, but it's not possible to actually buy Ethereum. But you can buy the token that powers the network, ETH.
ETH has a long standing position as the second largest cryptocurrency, next to Bitcoin.
Recommended Reading: What is a Layer 1 Blockchain?
What Ethereum (ETH) Brings to the Table
There are some key features that distinguish ETH as an asset. These include:
Smart Contracts: Smart contracts unlock the whole suite of utility that the Ethereum network offers. These programmable pieces of code are used to create agreements between parties without an intermediary, simplifying contractual agreements while reducing the overall cost to create and implement them. ETH is used to upload a contract to the network.
DeFi & DApps: The Ethereum network is home to countless DApps. How does one use and pay for these services? With ETH. Ether is the “gas” that fuels the entire network of DApps available on the Ethereum blockchain. From gaming to finance, there are thousands of DApps using ETH to execute smart contracts daily.
NFTs: Ethereum is also the first and largest network for buying and selling NFTs. All NFT trades on the network take place using ETH. If you want to make an NFT purchase in the future, you will most likely need to buy ETH first.
Digital Oil: Many independent projects and assets run on the Ethereum network. These projects need to buy and use ETH—a finite resource—to continue using the network. For this reason, some refer to Ether as digital oil, given that it’s a limited resource that’s also required to stimulate economic activity.
The Merge: On September 15, 2022, the Ethereum network changed its consensus mechanism it uses to validate transactions, moving from a Proof of Work (PoW) to a Proof of Stake (PoS) model. The Merge has led to a more secure and less energy-intensive network. The network is also better equipped to implement new scaling solutions in the future.
Staying Power: ETH has been traded publicly for the last 7 years. Although not as old as the original crypto, Bitcoin, ETH is by no means new either. 7 years is a long time to be in a sometimes unforgiving market. While other altcoins have come and gone during this time, ETH seems to have a considerable Lindy Effect, creating a staying power through every bear market it survives. Although past performance is in no way an indicator of future results, ETH’s ability to endure market swings is a feature that suggests it isn’t going away anytime soon.
Ultimately, it’s up to the individual investor to determine if Ethereum is the right investment for them.
Recommended Reading: The Big Four: Smart Contract Platforms
How to Buy ETH in 4 Easy Steps
The easiest way to buy ETH is through a brokerage, like Caleb & Brown.
With 24/7 access to your personal broker, you can buy ETH with fiat currency or trade with your current assets with no pair limits. Since brokerages do not need to deal with network latency issues like exchanges, you’ll have access to a pool of interchangeable assets. This not only makes ETH acquisition easier, but it also makes other, difficult to access tokens easier to acquire. Here’s how you can buy ETH in 4 easy steps.
1. Open an Account
Register as a client for free in just 5 minutes. You can register as an individual, corporation, business, trust, self-managed super fund, self-directed IRA or 401(k).
2. Verify Your Account
Verify your account by submitting the required Know Your Customer (KYC) documentation. This usually includes a photo ID, proof of address, and other documentation depending on the type of entity you register as. For more information, see our Onboarding Your Account FAQs.
3. Deposit Cash or Crypto
Once your account is verified, deposit your funds into the account provided by Caleb & Brown. A test transaction will be done first and, if successful, you can then transfer the entire amount.
4. Buy ETH
Once the funds hit your account, you’re ready to place an order. Simply send your order form via email to your personal broker. Your broker will execute your trade as requested, avoiding slippage where possible. Additionally, all Caleb & Brown clients have 24/7 access to their brokers, on-call to answer any crypto questions you may have.
Alternative Ways to Buy Ethereum (ETH)
You can also buy ETH through a centralised exchange (CEX) or a decentralised exchange (DEX). Each option brings with it a unique set of hurdles to jump through.
If using fiat currency on a CEX there will often be additional KYC steps and fees applied to have your fiat converted to crypto. Check with the exchange you are using before proceeding.
You will also need to find an ETH trading pair; an asset that can be freely traded for Ether. For most exchanges that list ETH, this is usually a stablecoin or Bitcoin.
Alternatively, if you find a DEX that lists ETH, it’s not as simple as pressing “buy”. You’ll need to find an ETH trading pair here as well. If you don’t have one of these assets, you’ll need to swap your fiat or crypto for a coin that readily pairs with ETH. Keep in mind that you will be charged a transaction fee for each swap you complete.
Lastly, when using DEXs keep in mind that they come with their own set of risks. DEXs offer no custodial services, are prone to hacking, and are generally less secure than CEXs and brokerages.
FAQs
How Much ETH Should I Buy?
How much ETH you buy depends largely on your investment goals. Investors also weigh a variety of factors before choosing a project to invest in. Ultimately, it’s up to you to determine how much you decide to invest, and what strategies you use to invest in crypto. Doing your own independent research will go a long way in helping you create and set investment goals.
How is Ethereum Different From Bitcoin?
The fundamental difference between Ethereum and Bitcoin is programmability. Through the use of smart contracts, the Ethereum network can be programmed by developers and creators, opening up a world of use cases beyond decentralised finance.
Where is the Safest Place to Buy ETH?
With digital asset scams on the rise, now is more important than ever to engage services that prioritise user security above all else. If you’re looking for a secure, custodial service to safeguard your assets, look no further than Caleb & Brown. We have a battle-tested security infrastructure, through the leading asset security platform Fireblocks.
Invest in Ethereum (ETH) with Caleb & Brown
Investing in crypto doesn't have to be complicated.
Caleb & Brown is the world's leading cryptocurrency brokerage for those looking to invest in ETH or other digital assets.
Our personalised broker service makes crypto investing simple. A dedicated member of our broker team is always on hand to guide you along the way, giving you the confidence you need to navigate the world of crypto. Not to mention key features such as:
- No joining or signup costs
- Industry-leading storage solutions
- 24/7 customer support
If you are ready to take the next step and invest in ETH, contact your crypto broker today.
Not yet a client? Sign up for your free consultation.
Recommended reading: What is a Layer 1 Blockchain?
Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided.
