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Spreadsheet Ranger

How to buy Ethereum

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What is Ethereum for beginners?

At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.

 

Is Ethereum similar to Bitcoin? Well, sort of, but not really.

 

Like Bitcoin, Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capability. Bitcoin offers one particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments. While the bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application.

 

In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn Ether, a type of crypto token that fuels the network. Beyond a tradeable cryptocurrency, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network.

 

What is a smart contract?

 

Smart contract is just a phrase used to describe computer code that can facilitate the exchange of money, content, property, shares, or anything of value. When run on the blockchain a smart contract becomes like a self-operating computer program that automatically executes when specific conditions are met. Because smart contracts run on the blockchain, they run exactly as programmed without any possibility of censorship, downtime, fraud or third party interference.

 

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While all blockchains have the ability to process code, most are severely limited. Ethereum is different. Rather than giving a set of limited operations, Ethereum allows developers to create whatever operations they want. This means developers can build thousands of different applications that go way beyond anything we have seen before.

 

How to buy Ethereum.

 

In this guide I will demonstrate how I do it, this is not to be taken as advice you will still need to do your own research and I am certain there are other ways to do this so of course feel free to add your thoughts.

 

My process flow for buying ethereum is as follows:

 

I deposit money into Luno (bitx)

I then buy bitcoin

I then go to the Bitcoin Ethereum exchange

I then trade bitcoins for Ethereum 

I then store the ethereum in my wallet

 

Step One: Get A Luno Account

Get your free Luno account and send them some verification documents

 

Step Two: Buy Some Bitcoin

After you've made an online banking transfer to Luno (BitX), you'll be able to buy Bitcoin in seconds

 

Step Three: Trade Your Bitcoin For Ether

CoinMarketCap has an extensive list of exchanges that allow you to buy and sell Ether.

 

What Ethereum wallet do I use?

 

This is where stuff becomes a tad bit tricky since there really isn’t a lot of wallets available as with Bitcoin. This is mainly due to Ethereum still being very new (Initial release: ‎30 July 2015). 

 

In my search I have come across four ways to store ethereum, I will continue to discuss them below: 

 

Option One and certainly the most secure way is to use a hardware wallet my favorite is the ledger wallet, but for this guide I will not be going into too much detail on hardware wallets. You can read more about them here - https://ethereum.stackexchange.com/questions/1707/is-there-any-hardware-wallet-available-for-ethereum

 

Option two is to use Geth which is a command line interface for using, sending, receiving, and creating contracts with Ethereum. Geth is a good option for programmers, but not a good option for users in search of an easy-to-use wallet.

 

Option three is to use “the” Ethereum Wallet and MIST available from the official repository here https://github.com/ethereum/mist/releases installing this wallet takes forever, it is certainly a good option, but you will need some patience and a fast internet connection because it downloads the entire ethereum blockchain to your computer. 

 

I will get into more information and steps how to install this later on in the guide.

 

Option four is the one we are going to use in order to start out and get you going. There is a online wallet called Ethereum-wallet, open an account here http://ethereum-wallet.net/ please note this is an online wallet and security is not as good as an offline one like option three, but we need to get some ether in order to get started on the wallet in option three and this online wallet certainly is the most straightforward and trustworthy of the lot. That said if you already own bitcoin which you do since you bought it on luno (bitx) you can deposit bitcoin straight into your Ethereum/Mist account. For this guide however we will buy Ethereum on the Changelly exchange and then send that to your mist wallet.

 

 

What Ethereum exchange do I use?

 

I use https://changelly.com for when I want to convert bitcoin to ether the User Interface of Changelly is very intuitive and simple to use as demonstrated below.

 

Then I also use https://www.bitfinex.com when I actually trade the currency pairs similar to what you would trade USD/ZAR USD/EUR and other forex securities.

 

How to trade bitcoin to Ethereum

 

Create an account on http://ethereum-wallet.net/ then create yourself an Ethereum Address this is what will be used in the next phase on changelly.

 

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Create an account on Changelly then follow the screenshot below basically you select the amount of bitcoin that you want to "convert/trade" for Ethereum and then after you have entered the amount proceed with the trade and you will be asked what you ethereum address is and then you will be given a bitcoin address to pay the bitcoins into. Once that is done you will notice ethereum in your account. That is it, you now own Ethereum.

 

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Now for the final step download the latest version of Mist from here https://github.com/ethereum/mist/releases it will be a zip file so create a folder on your computer and extract the contents of the zip then open the .exe file. Now you need patience and a hell of a lot of it, this will now download the entire blockchain to your computer and it takes 10s of hours.

 

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Now you wait for hours, best get a cup-o-coffee for this part

 

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I use this website to get a quick glance at what the market is doing https://ethstats.net/ but those stats does not represent the whole network since the listed nodes are done on a voluntary basis therefor if you want accurate information and the latest block number https://etherscan.io/

 

Once mist has completed downloading it will open up a UI which you can then create new accounts each with their own account address and then you can send your Ethereum from the online wallet accross to your new wallet.

 

EDIT

I now use JAXX exclusively to store my Ether, I still use changelly, but I decided against the online wallet (http://ethereum-wallet.net/) I advise people use https://jaxx.io/

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According to this article, there is something even better than Bitcoin or Etherium:

 

FOR THE CRYPTOCURRENCY community, 2016 was a very good year. Bitcoin doubled in price. The far-out Bitcoin alternative Ethereum shot up by a factor of 10. But another, once-obscure cryptocurrency called Monero outpaced all of them, multiplying its value around 27-fold. That’s a windfall not just for cryptocurrency speculators, but for financial privacy advocates everywhere—including a few suddenly wealthy dark web drug dealers.

 

Over the last year, the value of the hyper-anonymous cryptocurrency Monero grew 2,760 percent, making it almost certainly the best-performing cryptocurrency of 2016. Today each Monero is worth around $12, compared with just 50 cents at the beginning of last year, and the collective value of all Monero has grown to close to $165 million. The source of that explosive growth seems to be Monero’s unique privacy properties that go well beyond the decentralization that makes Bitcoin so resistant to control by governments and banks. It’s instead designed to be far more private: fully anonymous, and virtually untraceable.

 

Source: https://www.wired.com/2017/01/monero-drug-dealers-cryptocurrency-choice-fire/

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According to this article, there is something even better than Bitcoin or Etherium:

 

FOR THE CRYPTOCURRENCY community, 2016 was a very good year. Bitcoin doubled in price. The far-out Bitcoin alternative Ethereum shot up by a factor of 10. But another, once-obscure cryptocurrency called Monero outpaced all of them, multiplying its value around 27-fold. That’s a windfall not just for cryptocurrency speculators, but for financial privacy advocates everywhere—including a few suddenly wealthy dark web drug dealers.

 

Over the last year, the value of the hyper-anonymous cryptocurrency Monero grew 2,760 percent, making it almost certainly the best-performing cryptocurrency of 2016. Today each Monero is worth around $12, compared with just 50 cents at the beginning of last year, and the collective value of all Monero has grown to close to $165 million. The source of that explosive growth seems to be Monero’s unique privacy properties that go well beyond the decentralization that makes Bitcoin so resistant to control by governments and banks. It’s instead designed to be far more private: fully anonymous, and virtually untraceable.

 

Source: https://www.wired.com/2017/01/monero-drug-dealers-cryptocurrency-choice-fire/

 

How do you store it?

 

Looking at this Ethereum guide, it seems a lot more complex than bitcoin.

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You have no idea! My only regret, I should have bought more.

 

This tweet sums it up for me - https://twitter.com/NMD220/status/858023317856538624

 

Ethereum has been climbing nicely over the last few days. As Spreadsheet ranger said I am also regretting buying more. Having said that I have now taken my original deposit  out of Ether and put it back into bitcoin as that will be my long term holding. The money that is left in Ether was basically free now as I used my Bitcoin money to buy in and having now transfered my deposit back to Bitcoin it is only the profit part that is left in Ether which I will keep there for now. 

 

For those interested below is how I buy my Ether.

 

Open Luno account and transfer some rand into it. Use that to buy Bitcoin on Luno. I then transfer my bitcoins to my Jaxx wallet and once it shows there I transfer it within the JAxx wallet using the inbuild Shapeshifter App to buy Ether. It is a fairly easy process and I can swop Bitcoin for Ether fairly quickly and  back again. You can also do this for quite a few other altcoins like Litecoins, etc very easily.

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Ethereum has been climbing nicely over the last few days. As Spreadsheet ranger said I am also regretting buying more. Having said that I have now taken my original deposit  out of Ether and put it back into bitcoin as that will be my long term holding. The money that is left in Ether was basically free now as I used my Bitcoin money to buy in and having now transfered my deposit back to Bitcoin it is only the profit part that is left in Ether which I will keep there for now. 

 

For those interested below is how I buy my Ether.

 

Open Luno account and transfer some rand into it. Use that to buy Bitcoin on Luno. I then transfer my bitcoins to my Jaxx wallet and once it shows there I transfer it within the JAxx wallet using the inbuild Shapeshifter App to buy Ether. It is a fairly easy process and I can swop Bitcoin for Ether fairly quickly and  back again. You can also do this for quite a few other altcoins like Litecoins, etc very easily.

 

Does shape shift have any fees?

 

How does it compare to changelly I'm looking at buying a few other alt coins as well, currently I do it all via changelly

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Does shape shift have any fees?

 

How does it compare to changelly I'm looking at buying a few other alt coins as well, currently I do it all via changelly

 

Besides the normal mining cost there is no additional charge for using Shapeshift. Have not used changelly so cannot compare unfortunately.

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Does shape shift have any fees?

 

How does it compare to changelly I'm looking at buying a few other alt coins as well, currently I do it all via changelly

 

Besides the normal mining cost there is no additional charge for using Shapeshift. Have not used changelly so cannot compare unfortunately.

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Open Luno account and transfer some rand into it. Use that to buy Bitcoin on Luno. I then transfer my bitcoins to my Jaxx wallet and once it shows there I transfer it within the JAxx wallet using the inbuild Shapeshifter App to buy Ether. It is a fairly easy process and I can swop Bitcoin for Ether fairly quickly and  back again. You can also do this for quite a few other altcoins like Litecoins, etc very easily.

 

How long does it take when transfering Bitcoin to Ethereum within Jaxx Wallet? I bought Bitcoin on Luno, tranferred it to Jaxx wallet and used the Shapeshifter App to buy the Ethereum. In my transaction history (BTC) it shows the -x.xxxxxxBTC and shows +6 Confirmations. It still shows nothing in my ETH screen.

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How long does it take when transfering Bitcoin to Ethereum within Jaxx Wallet? I bought Bitcoin on Luno, tranferred it to Jaxx wallet and used the Shapeshifter App to buy the Ethereum.  In my transaction history (BTC) it shows the -x.xxxxxxBTC and shows +6 Confirmations. It still shows nothing in my ETH screen.

 

The longest it has taken me was about an hour and the shortest about 6min. Depends on the blockchain (is that the correct terminology?) You can adjust how much you want to pay in the settings menu on Jaxx for the change. The lower the fee the slower it goes. 

 

Also when going into your ETH wallet just refresh the screen as sometimes I have found that it does not refresh by itself. Once I had to close the Jaxx wallet and restart it to update.

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I'm not sure what I done wrong, but ETH finally showing in wallet after 11 hours.

 

Sent from my SM-N910F using the Platinum Wealth app

 

Sjoe, that is a long time. I know that there is some huge time delays at the moment with bitcoin as there is alot of trading going on. Cannot remember the exact figures (read a article a few days ago)but there was some 180 000 low value transactions that is beeing put in the back of the queue  as miners are opting for doing the larger more profitable transactions first. I normally pick the highest fee on Jaxx when I want the transaction fast otherwise I just wait.

 

Out of interest how many did you swop for Ether?

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Only R200. I wanted to check to see if everything works. I'll add another R300 soon.

 

Sent from my SM-N910F using the Platinum Wealth app

 

Ok, may be why it was so slow. Was going to change some BTC for Eth as well, but bitcoin has gone up almost $15 in the last hour. Kind of hope its the break it needed to get to over $1500. :-)

 

MMM, ok while typing this its $15,57 in the last hour

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I am using Jaxx wallet for now. It allows you to ShapeShift between certain currencies. Therefore skipping the "transferring to another wallet" step.

 

I will investigate some other wallet options over the next few days.

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Does shape shift have any fees?

 

How does it compare to changelly I'm looking at buying a few other alt coins as well, currently I do it all via changelly

 

@Spreadsheet Ranger Have you tried both options and could you advise proffered option between coincapmarket-> changelly

Or

Shapeshift?

 

Sent from my SM-G920F using the Platinum Wealth app

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@Spreadsheet Ranger Have you tried both options and could you advise proffered option between coincapmarket-> changelly

Or

Shapeshift?

 

Sent from my SM-G920F using the Platinum Wealth app

 

Hey Johnny, I have tested Shapeshift afterwards when it was mentioned here and I must be honest I like both, both are backed by credible people. Shapeshift is Erik Voorhees who is quite a known name in the crypto space. Then Changelly is backed by MinerGate also a very known and trusted pool.

 

After testing the Jaxx wallet I am a little more biased towards Shapeshift now, simply because it is built in.

 

For these reading this and have no idea what we are talking about: ShapeShift is a web and API platform formed in August of 2014 to provide instant Bitcoin and altcoin conversion with the maximum level of consumer protection and efficiency.

 

Users do not have to create accounts, deposit funds, or provide private personal information. This keeps the users safe from identity or financial theft – a critical improvement in exchange technology.

 

The company has a strict “No Fiat” policy, meaning it does not use banks or political currencies anywhere in its operations.

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Thanks all for the insightful thread. Spreadsheet Ranger I see you make a comparison between Jaxx and ShapeShift/Changelly. Isn't Jaxx a wallet where one can store their ETH and the others just exchanges for doing conversions? Can you store your Ethereum and other altcoins on Shapeshift/Changelly?

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Thanks all for the insightful thread. Spreadsheet Ranger I see you make a comparison between Jaxx and ShapeShift/Changelly. Isn't Jaxx a wallet where one can store their ETH and the others just exchanges for doing conversions? Can you store your Ethereum and other altcoins on Shapeshift/Changelly?

 

100% correct this thread is a tutorial where I try to show people how to buy ethereum, at least demonstrate how I managed to buy it. At the time I was only aware of Changelly soon after I used the Jaxx wallet and that is where I learned about shapeshift. So in another a thread here I compared all the wallets.

 

But the other guy asked in this thread between Changelly and shapeshift so I mentioned after using Jaxx I switched to shapeshift, but I realise now it might be a bit confusing what I meant was unrelated, ie I stared testing Jaxx and at the same time learned about shapeshift and from then started using shapeshift becuase when I installed the Jaxx wallet I saw that shapeshift was built in already.

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Ok, understood. So we can agree Jaxx is a wallet and Shapeshift/Changelly exchanges? You have given good reviews of those platforms. Do you have experience with other Ethereum/altcoin wallets besides Jaxx?

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Where is Jaxx's data stored? Distributed amongst your devices or is it on a jaxx.io server?

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