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The price of Ethereum has skyrocketed since it’s creation and launch in 2014.
This has led many investors to look into how to buy Ethereum, as they have been watching others get rich on their Ethereum investments and/or because they truly believe in the power of the Ethereum platform and its ether currency (symbol: ETH).
What is Ethereum?
Because the technology behind Ethereum is truly cutting-edge, most explanations of it are very technical and difficult to comprehend. For this reason, we wrote a guide to understanding it: Ethereum 101.
What is Ether (ETH) and How do I Buy It?
Ether is the name of the currency that is used on the Ethereum network. It is how someone pays to use the Ethereum network or to build on it. In a way, you can think of it as what powers the network.
Confusingly, ether is more commonly referred to as Ethereum. Because this has become the accepted parlance, we will refer here to both the network and currency as Ethereum.
Ethereum is bought and sold on cryptocurrency exchanges. And because Ethereum is such a dominant cryptocurrency, there is no shortage of ways to buy it.
Sadly, not all cryptocurrency exchanges are reputable and secure.
This is why anyone new to cryptocurrency, would be wise to buy Ethereum at Coinbase, especially when dealing with high-value coins like Ethereum.
Why Buy Ethereum on Coinbase
- Coinbase is one of the largest Ethereum exchanges online, with more than 10 million users who have traded over $50 billion in digital currency since 2012
- High-trust, solid security, terrific reputation and user-friendliness make Coinbase the easiest and safest Etheruem exchange for people who are new to buying cryptocurrencies
- The Ethereum that you keep on Coinbase is insured against hacking and, in the US, is also FDIC insured as well
- Coinbase is currently attempting to reach even more cryptocurrency investors by applying for a full brokerage firm license
For people who are new to the space, Coinbase is by far the best and safest choice on which to keep your Ethereum. It is very user and newbie-friendly, has competitive transaction fees and multiple payment options.
And unlike most exchanges you don’t need to transfer money to the exchange prior to trading. You just need to connect you bank account or credit card and purchase when ready.
Also, when buying Ethereum on Coinbase, you don’t have to create a separate wallet to store your Ethereum in because Coinbase has excellent security and even insures your Ethereum. If you want more details, we have elaborated on why Coinbase is one of the best bitcoin exchanges.
In addition, Coinbase also allows you to purchase Bitcoin, Litecoin and Bitcoin Cash.
This guide will show you step-by-step exactly how to get set up on Coinbase and to safely and securely buy and store your Ethereum.
How to Buy Ethereum on Coinbase Safely & Easily
Ok, let’s get down to business and get you your Ethereum!
1) Gather Items – What New Coinbase Users Need to Buy Ethereum
In order to buy Ethereum at Coinbase, you will need:
- A copy of your government issued photo ID
- Bank account information (or login credentials) or a valid credit card
- Optional: An Ethereum wallet (if you are not sure what this is, don’t worry for now and this will be addressed at the end of this article)
If you verify your information you are allowed unlimited investing and if you verify your photo ID then you can also send and receive the digital currencies supported on Coinbase.
2) Opening Your Coinbase Account
If you sign up with the link below you’ll get a Coinbase promo code, then you and I will both get free $10 worth of Bitcoin!
Important: What new users do need to remember when signing up to Coinbase, is that names on ID documents and bank or credit card details need to match exactly. So be sure to enter your details here as they appear on your ID.
For non-business users, signing up to Coinbase is very easy and straightforward. Users simply fill in the fields that are required to open an account and verify their identity by uploading a copy of their ID documents.
After signing up you will need to verify your email address, which you can do within the email that Coinbase will send you after you click “sign up”.
3) Verifying Your Identity
You will be prompted to upload a photo or use your webcam to take a photo of your ID or passport and a picture of yourself. Then, your identity will be confirmed within a couple minutes.
4) Connecting & Verifying Your Bank Details or Credit Card
After successfully opening a Coinbase account, users will need to verify their payment details. Coinbase will automatically prompt you to do this.
There are two ways to confirm a bank account and you will be given option A first.
Option A – Immediate Confirmation: Depending on which bank you use, you may have the option to confirm it immediately by providing Coinbase with temporary access to your online banking platform.
Option B – Small Deposits Into Your Account: If your bank is not supported for immediate verification or you wish to use a credit card instead, Coinbase will initiate two small transactions which will appear on your credit card or bank account statements.
Once this transaction has taken place, then go back to Coinbase and Select “Linked Accounts”. Here you can enter the amounts that they deposited into your account. After doing so your bank account will be confirmed
5) Enable Two Factor Authentication
This is not required but we recommend it as an added layer of protection for your bitcoin. Go to Settings >> Security and follow the prompts to enable this security.
We recommend using the Google Authenticator app (available in both Android and iOS) as the most secure option.
6) Buy Ethereum (or another Cryptocurrency) on Coinbase
Now for the fun part, it’s time to buy Ethereum (or Bitcoin, Litecoin or Bitcoin cash)!
Once your new Coinbase account has been fully verified, you can buy Ethereum by clicking the “Buy/Sell” tab the top of your main account page. Then, follow the steps below.
1) Select from Bitcoin, Litecoin, Bitcoin Cash, or Ethereum
2) Choose your payment method
3) Enter the amount you wish to purchased
4) Optionally, you can select to automatically repeat this purchase daily, weekly, every other week or monthly. This approach is called dollar cost averaging and, since the bitcoin price fluctuates, helps to average out over time the bitcoin price you pay.
7) Confirming Your First Ethereum Purchase
After filling out these details, a buy order will appear showing you the total transaction cost inclusive of Coinbase fees.
Once you click the buy button, the sale will take place and Ethereum (or whatever cryptocurrency you are purchasing) will immediately be credited to into your Coinbase wallet.
You are now the proud owner of Ethereum! Congratulations!
8) Trading & Storing Coins Safely
Ethereum tokens are kept in something called a wallet, which is essentially just a place that stores the private and public keys to your bitcoin, in other words, a couple strings of letters and numbers that represent and give you access to your Ethereum.
Because Coinbase allows users to store digital currency on its own platform, you don’t necessarily need your own Ethereum wallet.
People will often recommend that you do not keep your cryptocurrency on an exchange due to the fact that some exchanges have gotten hacked. However, Coinbase is often considered an exception because of the excessive security measures it takes.
Coinbase insures your cryptocurrency holdings that you keep on their exchange and, for US investors, your account is even FDIC insured up to $250,000. Coinbase is currently the only exchange to currently offer this level of protection.
However, there are pros and cons to storing your Ethereum on an exchange. The safest way to store cryptocurrency is usually considered to be hardware wallets such as the Ledger Nano S or Keepkey.
Be careful when setting up an Ethereum wallet as many are not secure. If you are looking to store your coins off of Coinbase, we recommend you use one of the best Ethereum wallets available.
Also, it is useful to be aware that Coinbase also runs a platform called GDAX.com, which is basically the same thing as Coinbase but for more advanced users. However, learning to use this platform can help you save significantly on transaction and transfer fees.
If at some point you decide you want to invest in other altcoins that are not supported on Coinbase, you will need to either transfer bitcoin from your Coinbase account, or set up a new account at exchanges like Binance or Gate.io.
If so, you can read how best to do this securely with our guide on how to buy altcoins.
If you just used this guide or have bought before on Coinbase, comment below as your experience will greatly help others to buy their first Ethereum on Coinbase and the more people that buy, the more valuable your own coins become! Share your experience below!
Richard has developed and ran multiple online websites and communities with tens of millions of monthly visitors. He first discovered bitcoin and blockchain in 2012 and has been helping to educate others on its potential since then. Richard is very passionate about the crypto community. Read his inspiring story into cryptocurrency here.