3a – How do I buy ether?
If you are looking to buy ether using the money in your bank account, the best and easiest option is to use a brokerage.
An ether brokerage is essentially an online bureau de change for ether. Brokerage platforms sell ether at a fixed price, depending on the time and date of the transaction. Just like when exchanging pounds for euros at the airport, the price at which you can buy ether from a brokerage will be set by the current exchange rate, plus whatever commission the broker charges for exchanging your money.
Because of their commission rates, brokerages are the most straightforward way to purchase ether but not necessarily the cheapest. To find the best price, trading ether on an exchange is your best option. This will be explained in section 4c, but first you’ll need to know how to store any ether that you buy.
3b – How do I store my ether in a wallet?
In order to store ether, you’ll need a ether wallet. In section 2a we learned what ether wallets are, how they work, and their importance in the movement of ether, so now let’s run through the different types of wallet that you can get.
There are 5 different types of wallets: online wallets, desktop wallets, mobile wallets, paper wallets, and hardware wallets. Each wallet type functions as an account to store your ether, and enables you both to send ether to, and receive it from, other wallets. The difference between the different types of wallet is in the way they secure your private keys (essentially your password that allows you to transfer ether out of your wallet).
There are pros and cons to each wallet type, which you can learn about in our ‘Wallets’ section. If you’re getting your first ether wallet, then it’s easiest to get an online wallet, for which you’ll simply need to register with an email address and create a password. These wallets are commonly attached to exchanges (see 4c) or brokerages (see 4a) through which you can also buy ether.
Once you have a wallet, you’re ready to buy or trade ether on an exchange. Also, if you want to trade ether without needing a wallet then that’s also possible with CFD platforms. Keep reading and we’ll explain your ether trading options.
3c – How do I trade ether?
If you want to trade ether, then your two main options are exchanges and CFD platforms. These platforms are more complicated than brokerages, but provide more options for making profit out of ether. The only difference between the two is that exchanges require you to own and store the ether you’re trading in a wallet, whereas CFDs do this for you.
Trading ether with the above platforms is similar to regular day-trading. Users can try to profit through making trades around the price fluctuations of ether, just like with any other store of value like gold or regular fiat currency (pounds, euros, dollars).
On exchanges you’ll be trading your ether directly for other cryptocurrencies, and on CFD platforms you’re basically making bets with the trading platform about whether the price of ether will rise or fall. For this reason, you will need a wallet to use an exchange, but not to trade on a CFD platform.
As mentioned, these platforms are more complicated to use than brokerages, so it’s recommended to read our pages detailing how CFD platforms and exchanges work, which will guide you through the process and help you start trading for profit – if that’s how you want to use ether.
By now you’re probably wondering if ether has any uses other than trading for profit. The answer is a definite yes, and so the final stage of our ether tour will take you through the different ways you can use ether.