Cryptocurrencies seem to be everywhere these days. What was once the topic of specialized forums is now openly discussed in mainstream media. While not everyone understands what cryptocurrencies are, most people are likely to have an idea… Be it positive or negative.
The truth is that cryptocurrencies are only a tool that can be applied in several ways and are neither “good” nor “bad” by themselves… It depends on how you use them. When it comes to using them as a way of investment, they have their risks and rewards. Just like any other commodity.
Here in TurboWallet, we love crypto. We have written multiple articles on how cryptocurrencies like Bitcoin can improve your finances. If you are not familiar with cryptocurrency, I recommend you to read this article on why crypto personal finance is the latest craze.
When it comes to crypto, most people have heard about “Bitcoin”, “Ethereum”, “Dogecoin”, and other coins. However, not all cryptocurrencies are made equal, and understanding that is essential. In this article, I will tell you what sets Ethereum apart, why you should consider investing in it, and how to buy it.
What Is Ethereum And How Is It Different From Bitcoin?
Ethereum is the second-largest cryptocurrency at this time right after Bitcoin. It was created by Vitalik Buterin and launched in 2015 as a means to fight the “horrors” of centralization. Centralization is the concept of having systems that depend on an individual or organization to operate.
You are already familiar with centralized systems, as they are everywhere. In the military, the president has the last say as “commander in chief”. A bank can decide if you have access or not to your funds. The government can make any decision regarding the local currency… Centralization is everywhere.
Ethereum was designed as a means to allow developers to create Decentralized Apps. These are applications that don’t depend on authority to operate.
Think of services like Instagram or WhatsApp: Facebook runs the servers, develops the apps, restricts access, and monetizes the platforms. A decentralized app would not depend on a company but on all of its users to operate.
This aim to change how apps are created is what sets Ethereum apart from Bitcoin. While Bitcoin is intended to be a digital currency or financial tool… Ethereum is meant to be a financial toolbox with its own cryptocurrency: Ether.
While I have been (and will be) referring to the cryptocurrency as Ethereum, a distinction needs to be made. Ethereum is the platform that allows developers to create decentralized applications while Ether is the cryptocurrency that powers it.
If you have ever visited Disney, you know they have their own currency to be used in the park: Disney dollars. You can think of Ether in a similar way: A currency that allows people to interact with the Ethereum network.
As many people interact with the network, they are willing to acquire the cryptocurrency to interact with dApps running in the network. The more people using the network, the higher the demand for the coin and the higher its value. This means that Ethereum has different traits to Bitcoin, as its use cases are wider… But that is a topic for the next section!
What Sets Ethereum Apart and Why Should You Care?
As we already said, Ethereum is not a tool like Bitcoin but a Toolbox. This means that unlike Bitcoin, which only gains value based on the trust its holders and users have in it… Ethereum has a utility value too. Not only can it be used as currency out of the network but also to pay to gain access to services.
Ethereum is widely used for Decentralized Finance (which we explain here), gaming, collectibles, and more. If an app requires a transfer of value, it can be built using Ethereum.
As blockchain technology continues to gain adoption and apps transition to decentralized models, Ethereum is likely to grow. While there are many other networks competing for the podium, Ethereum is king right now when it comes to dApp development.
Ethereum also introduces the concept of ‘Smart Contracts’. To put it simply, smart contracts are programs that automatically execute all or parts of an agreement.
You don’t need to trust the other party or have a mediator… You check and accept the conditions while the system does the rest.
Another fundamental difference is that Ethereums allows for the creation of new cryptocurrencies or tokens. This means developers can have their own cryptocurrencies in addition to Ether. This makes the Ethereum ecosystem far more complex than Bitcoin, allowing it to escalate as these coins escalate.
These are some of the main features that make Ethereum different from Bitcoin. While it is hard to say that Ethereum is superior to Bitcoin as they are different and I don’t want to be controversial… The truth is that Ethereum can do everything Bitcoin can but not the other way around. You can reach your own conclusion!
How To Buy Ethereum… The Easy Way
Now that you (hopefully) have a better idea of what Ethereum is… It’s time to talk about how to buy Ethereum.
In this article, we will be talking about how to use a crypto exchange to buy Ethereum via a debit or credit card. However, you should know that this is not the only method to buy Ethereum, it is just one of the easiest.
We will be assuming you don’t have an Ethereum wallet nor a Binance account. If you do have any of these, just skip that step as it is unlikely you need it. Let’s get started!
Step 1: Get a Crypto Wallet
Just like the American Dollar or any other fiat currency, Ethereum needs to be stored. As this cryptocurrency is not physical, you will need a digital wallet. You can think of these wallets like Paypal, Venmo, or similar platforms… The difference is they allow you to store, sell, and receive crypto instead of fiat.
Crypto wallets are apps or physical devices that will keep your Ethereum stored. They do this by using a “private key” that grants you access and a “public key”/address that identifies it. The private key allows you to access the crypto in the wallet, making it essential to keep it safe.
While a crypto wallet will be created for you when you sign up in Binance, you still want to get another one. The reason is that Binance doesn’t use private keys in the same way other wallets do. This, in addition to being extremely attractive to hackers, makes it a good idea to move your crypto to a different wallet.
Some of the most popular Ethereum wallets I can recommend you are the following:
|Wallet Name||Type of Wallet||URL|
|Trust Wallet||Software Wallet||https://trustwallet.com/|
Let’s talk about the differences between Hardware and Software wallets. Hardware wallets are physical devices reminiscent of USB pen drives.
They require you to have access to the device to interact with your crypto. As they are never connected to the internet, they offer a higher degree of security. However, they have a higher cost than software wallets as well as being less flexible and user-friendly.
Software wallets on the other hand are completely digital. They can be an app on your phone, or a program on your computer. They have slightly less security than hardware wallets because they are on your device that can be connected to the internet. This makes it possible for hackers to get into your computer than access your crypto. They are still very secure however you should keep this in mind when holding large amounts of crypto.
Once you have selected your preferred wallet, download/buy it and follow the instructions to set it up. At some point during the setup, you will be given a passphrase. Make sure to keep it somewhere safe and private! Whoever has access to it, can gain access to your Ethereum.
Step 2: Create a Binance Account
Now that you have where to store your Crypto, it is time to create an account to buy Ethereum. While there are many popular exchanges like Coinbase, Gemini, and Kraken, I will be talking about Binance. This is one of the most popular and secure crypto exchanges out there.
If you want to use another exchange, chances are it has a guide on how to create it. However, make sure to do your research to ensure it is trustworthy!
To create your exchange account, head to Binance, fill the fields with the information requested, and click the “Create Account” button. The instructions will be pretty straightforward and simple, follow them.
Step 3: Verify Your Identity
With crypto becoming more regulated, crypto exchanges are required to ask you for more information. If you don’t provide all the information required, you will have certain limitations on your account. To operate freely, you will need to verify your identity completely.
You can do this by clicking on the profile icon in the main menu bar. You will see an “Identity Verification” option, which will allow you to choose between 3 levels of verification. I recommend you do the advanced verification to remove all limitations.
Step 4: Buy Ethereum Using Debit/Credit Card
Now that you have a fully verified Binance account, you can use a Debit/Credit card to buy Ethereum. To do this, just open the Binance app or website and locate the “Buy crypto” button.
After clicking on it choose the “Credit/Debit Card” option. Now, it is just a matter of deciding how much Ethereum (or its equivalent in dollars) you want to buy. Click continue, click on “Add new card”, add your card information by filling the form, and then click on “Next”.
You will be asked to provide your billing information, which you should do before clicking on “Add card”.
It is now time to review the amount of Ethereum you want to buy and click on “Continue”. The money will be taken from your credit/debit card and the Ethereum added to your Binance wallet. You are now officially an Ethereum holder.
Finally, click on “Continue”. The payment will be processed and your Ethereum will be added to your crypto wallet. You are now the owner of some Ethereum!
Step 5: Transfer Your Ethereum To Your Wallet
While you already own Ethereum, you might remember I recommended holding it on a different crypto wallet. This will make the process a bit longer and complicated at first but is entirely worth it to protect your coins.
Go to your preferred wallet and look for the “receive”/”deposit” option. You will be given a string of characters resembling “0x89205A3A3b2A69De6Dbf7f01ED13B2108B2c43e7DA”. This is your crypto wallet’s address, which will be used for you to receive crypto.
You should now go back to Binance’s app or website, locate and click on the “Wallet” button, and then on the “withdraw” option next to “ETH” (which stands for Ether).
Paste your crypto address on the next form under “Wallet Address”, followed by filling in the form with the amount of Ethereum you want to transfer. The network should be selected automatically.
After clicking “Withdraw” you will need to click on the two “Send Code” options. Check your phone and email address for the verification codes, paste them into the form and confirm the withdrawal.
Your Ethereum will now be transferred to your wallet, a process that should take some minutes at most. Once you receive it, you are done!
Congratulations on buying Ethereum for the first time. While this process might seem overly complicated, it certainly will get easier with time. The fact you don’t have to create another account or get a wallet in the future will help!
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