So here I am as a mid 40-year old searching online for how to buy ethereum. But wait, how do I even spell it? It is “etherium” or “ethereum”. (Apparently it’s the latter, after another quick search. And the abbreviation is ETH).
And yes, I am a little behind the times and unsure of how these things work. So let’s get started on my journey to discover how to buy Ethereum in South Africa.
If you’re wondering whether I (as a level headed personal finance blogger) advocate for investing in crypto currencies, the answer is yes… and no… LOL. I am still a little skeptical of the long-term value of this asset class, but to be honest, it’s only grown since it started. I do also believe that one should have a small amount of investment in something a little more risky and which could potentially grow. It’s part of a well diversified portfolio. I currently have around 1% of my overall investment portfolio in cryptocurrencies. Here’s a post on whether I think its a good investment.
And if you’re interested you can download a copy of the spreadsheet I use to track my overall investment diversification. It’s free – no strings attached.
The hard way or the easy way?
If you speak to a tech-head who firmly believes that every government is out to get them and that no-one is safe anywhere, you’ll probably be advised to do some hardcore stuff. Like create your own wallet that somehow syncs up to the Ethereum motherboard deep down in the dark corners of the web. They’ll use lingo such as full nodes, blockchains, wallets, keys and backups. And yes, it is all very confusing to us normal folk and clearly not an avenue that I really wish to pursue.
Here are two posts that I found on creating your own wallets and “stuff”.
Ethereum for beginners (apparently)
A guide to setting up your own Bitcoin wallet (which I presume is a similar process for ethereum)
Now that is clearly the hard way!
Whether it is ultimately better or not is up for debate, but there are far simpler ways to enter the world of cryptocurrencies without needing any technical background or experience.
I use Luno
Luno is an international company with over 8 million customers across 40 countries (I found that on their site). I like them as they’ve made investing in crypto currencies so easy and accessible. I’m not working for them, but this is an affiliate linking. Why? Well, I use them myself and really like the app. So why not share what works for me?
Go to their site and sign up. I’d say do it now as you don’t need to commit to anything and you don’t need to spend a cent. You can just take a look at what it’s about and how it works.
Your Luno Ethereum wallet
Once you have signed up, you can use the app which looks like this. This is just the general graph showing how the ETH is performing. You can flick through a few of the different cryptos to see what each is doing. You don’t have to buy anything at this point, right now we’re just looking. lol
In order to buy Ethereum though, one needs to create an ETH wallet on the app. You may need to first fund your account with “normal money” although I don’t actually know if that is required.
Once you have an ETH wallet though, you can buy and sell Ethereum. It’s literally that easy. You will obviously need to fund your account before actually doing any transactions.
But, buying and selling all happens in the app with just a few clicks here or there. It’s all safely stored and handled by one of the worlds largest “exchange companies”.
How to buy Ethereum
There are two ways to buy ethereum using the Luno app. Firstly, just click “buy” on the main screen. That’s the easy option which will purchase your desired amount at the current going rate. You do however pay a very small fee for the convenience of the immediate transaction.
The second method of buying ETH will circumvent the fee, but you may need to wait for your order to be fulfilled. You can make an offer to purchase some ethereum at a price less than the current going price. This means that you can decide what you’re willing to pay for the ethereum. Great in theory but you can only fulfil your offer when others are willing to sell at that price. You could wait an hour, a day or even a year, depending on what your offer was.
So if the current rate is R42,908 ETH/ZAR, you may decide to purchase only when the rate drops below R40,000. You can make an offer for that and then simply wait for it to happen. But, you can obviously not predict what will happen, nor when.
Also note that you don’t have to buy whole units as that would be pretty pricy. You can make offers on fractions such as 0.0005 ETH.
I don’t like to overcomplicate things so I just use the “Limit” function, enter a price that’s a little less than the going rate, and wait. You can read up on what other types f trades mean and how they work.
Personally I’m not trading to try make millions. I do sometimes sell at a higher price and wait for the price to drop again. But, that is speculation (aka gambling) and not something I’d recommend you do unless you are truly able to survive should you lose your money.
No quicks bucks to be made
Crypto currencies are NOT a “get rich quick” scheme, even though many companies and scammers are touting it as such. Think of it almost like a share price of a company. It goes up and down based on emotions, world events, politics, etc. The major difference though is that this is very volatile. As in, the ups and downs are large and frequent, and no one can predict it. Not even AI.
And just on that note about politics. I know that Ethereum and cryptos are apolitical and people say that they are unaffected by events. But they are. When a country is experiencing political tension, heightened tax regulations, unstable governments, then investors sentiments change and they change what they’re investing in. They may buy more cryptos or they may try sell quickly based on an event. When Elon Musk sends out a tweet about purchasing a Tesla with Bitcoin, he price shot up. And when he tweets about other crypto’s, the price either jumps up or down. This shows how emotions, fear and greed, on a large scale, play out.
But back to the point on how to buy Ethereum; you simply do it on the app.
Basic security for your ETH wallet
You can rest assured that Luno has some serious security in place and that they spend a huge amount of effort maintaining and securing their systems. They have an excellent track record (and no, this is not an ad lol). But, it’s up to you to keep your side safe.
I created a new email address that I use for my cryptocurrency. The reason is simply that I use it only for this one purpose and I delete any and all emails that come in from anywhere. I won’t be falling for a scam as no-one knows this email address and it is not registered with any company, anywhere. I might be a little extreme, but do keep a very watchful eye over emails that you receive pretending to be about your cryptocurrency investment.
Keep your password super secure and don’t show fiends and family how much you have in your crypto wallets. Treat this as you would your bank account.
A good idea though is to share the details of your investment as an annexure in your Will, or simply via a letter to your loved ones. If no one knows that you own cryptos, then they will be lost forever. Like literally, no-one will ever be able to access them. This is super important as your family could lose your entire investment if they don’t know how to access it, that’s if they even know you have it.
Final thoughts on how to buy Ethereum
So as a quick recap, you will need some sort of ETH wallet in order to purchase and hold Ethereum. You can can go about the hard way to create and manage your own set up, or you can use an Exchange with an app, which makes it all the more accessible.
I’m not representing Luno but rather just sharing from my own experience. It works well for me and I think it will work well for you too.
I’d say, SIGN UP and check it out for yourself.