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Since 2014, Ethereum’s Ether has become the third largest cryptocurrency by market capitalization at $13 billion, behind Ripple (XRP) at $13.8 billion and Bitcoin (BTC) at $65 billion.
In 2016, a flaw appeared in Ethereum’s decentralized autonomous organization (DAO), its small project software was hacked and $50 million worth of Ether was stolen. The cryptocurrency was thereafter split into two separate blockchains known as the Ether Classic (ETC) and Ether (ETH) cryptocurrencies.
Overview: How to Buy Ethereum in the U.K.
Ethereum’s ETH can be widely sourced in the U.K., although you will need to buy ETH through a bitcoin ATM, a cryptocurrency exchange or a peer-to-peer cryptocurrency group that offers ETH.
You can choose between investing in ETH, which means you register at an exchange and acquire a crypto wallet, or you can trade it when you buy and sell contracts for difference (CFDs) on ETH without actually taking possession of the cryptocurrency.
Going the CFD route means you can up with an online cryptocurrency CFD broker such as XTB, for example, and does not require you to obtain a wallet or register with an exchange. Keep in mind that a CFD broker does not provide you with the currency, so you cannot use it to make purchases or hold in a wallet.
Bitcoin currently continues to reign as the best cryptocurrency due to its market recognition and high liquidity. Nevertheless, interest in the Ethereum blockchain and the ETH and ETC cryptocurrencies continues to grow, which makes it a great alternative to bitcoin for U.K. residents.
Step 1: Open an Account at a Cryptocurrency Exchange
Before you begin trading, be fully aware of the financial risks involved and develop some knowledge on how to trade cryptocurrency. It could spell disaster if you’re unprepared to trade this highly volatile market once you’re faced with the cryptocurrency markets’ inherent price swings.
The first thing to consider before opening an account at an exchange involves how to finance your cryptocurrency purchase. To open an account with a cryptocurrency exchange in the U.K., you will need to have liquid funds (in GBP) in a bank account or another cryptocurrency like bitcoins in a wallet or stored on an exchange.
Many U.K. exchanges that support the Ethereum blockchain accept bank transfers or SEPA credit transfers. You can also buy ETH at a bitcoin ATM with cash, but this may not work for buying ETC.
Once you have secured a source of funding, you can open an account with a cryptocurrency exchange, a peer-to-peer group, an online broker or a spread betting firm, with the latter two the best options for speculators.
U.K. exchanges and peer-to-peer groups that support Ethereum’s Ether (ETH) and Ether Classic (ETC)
This membership-only cryptocurrency exchange accepts clients from 174 countries. The exchange supports nine cryptocurrencies, including Ethereum’s ETH and ETC, and accepts deposits in GBP via bank transfer, as well as deposits in bitcoins and other cryptocurrencies.
Memberships are offered free of charge, and the company offers both an iOS and an Android app for smartphones and tablets. Uphold also supports Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Bitcoin Gold (BTG), Ripple (XRP), Dash (DASH) and Voxels (VOX). A screenshot of Uphold’s home page appears below.
This U.K. based exchange focuses on providing fast deposits and withdrawals, as well as excellent customer service. Supported cryptocurrencies include Bitcoin (BTC), Ethereum (ETH and ETC), Litecoin (LTC), Ripple (XRP), Monero (XRM) and many others.
A minimum deposit of £500 is required and can be made through a SEPA credit or bank transfer. In addition, you must pay a deposit fee of $10, €10 or £10, depending on the currency used to open the account at BC Bitcoin.
This exchange consists of an international peer-to-peer marketplace similar to localbitcoins.com. Coindirect publishes an online real-time list of buyers and sellers of ETH and some other cryptocurrencies. The exchange determines your IP address and locates buyers and sellers in your immediate area.
Along with the name of the buyer or seller, the exchange publishes the price and the payment method, which generally consists of bank transfers. Coindirect supports Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), EOS.io (EOS), Stellar Lumens (XLM) and Tether (USDT). A screenshot of Coindirect’s ETH page appears below.
CEX.io offers ETH and other cryptocurrencies that can be purchased with EUR, USD or GBP. CEX.io features a competitive fee structure and offers leverage of up to 3:1 on some cryptocurrencies. In addition to cryptocurrencies, you can trade nine forex currency pairs.
CEX.io accepts Crypto Capital, Visa and MasterCard credit cards, SEPA credit transfers and bank transfers for funding accounts. The company charges an instant trade fee of 7% and 3.5% + $0.25 for Visa transactions.
Bitcoin ATM Automatic Tellers
In addition to cryptocurrency exchanges and peer-to-peer groups, Ether (ETH) can be obtained for cash at a bitcoin ATM.
Currently, 214 bitcoin ATMs operate in the U.K. and 134 of them are located throughout the greater London area. Additional cryptocurrencies offered at these ATMs include Bitcoin (BTC), Bitcoin Cash (BTH), Dash (DASH), Litecoin (LTC), Zcash (ZEC), Monero (XMR) and Dogecoin (DOGE).
Step 2: Get a Cryptocurrency Wallet
Once you determine your source and open an account at a cryptocurrency exchange or peer-to-peer exchange, you need a crypto wallet to withdraw your currency from the exchange or another source where you purchased your ETH or ETC.
A crypto wallet address is similar to an email address, except that you can pay for goods and services and receive payments and gifts with your wallet address. The wallet contains two keys, a public and a private one. The public key, like an email address, can be shared with others. In contrast, the private key is like an email password and should be kept confidential, or you could lose all of your cryptocurrency if someone uses it.
Once you download it, your crypto wallet can be accessed through your desktop, laptop, tablet or smart mobile device. You can also use a web-based wallet that does not require a download.
Popular crypto wallets used in the U.K
Ledger Nano S
Ledger Nano S supports over 40 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP), to name just a few. The wallet was designed around a chip similar to those used in credit cards and passports for the highest security and it protects your assets with a PIN.
The Coinomi wallet comes in a mobile version for iOS and Android devices and a desktop version. The wallet’s single platform offers native support for 125 blockchains and 382 tokens, making a total of 507 digital assets it can store. The most important advantage to this wallet consists of its ability to exchange cryptocurrencies at no cost.
Specifically designed for merchants or anyone doing business online, the Coinpayments.net wallet lets you accept 1,165 supported coins and tokens for payment. The wallet is also used by more than 230,000 vendors in 182 countries and it supports popular shopping carts used by many e-commerce stores such as Opencart, Magento and WooCommerce.
The first hardware wallet designed for bitcoins, the Trezor One wallet consists of a small, key-sized peripheral that connects to your computer with a USB cable. The wallet stores your personal keys and can be used to sign transactions.
The wallet is fully compatible with the Ethereum protocol and supports ETH, ETC and ERC20 private contracts. Other cryptocurrencies supported by Trezor include Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin Gold (BTG), Dash (DASH) and Zcash (ZEC).
Step 3: Withdraw ETH to your Crypto Wallet
The final step involves the withdrawal of your ETH or ETC into your personal crypto wallet. After you purchase the cryptocurrency, you may withdraw it to your Ethereum-specific or multi-asset wallet by using a QR code.
Be aware that leaving your currency anywhere where you don’t have control of your private keys can mean risking your entire investment. If you leave your ETH at the exchange where it was purchased, you run the risk of the exchange getting hacked. It makes sense to store your ETH or ETC in your own wallet controlled by your private keys.
In the U.K., your options for purchasing Ethereum cryptocurrencies include bitcoin ATMs, cryptocurrency exchanges and peer-to-peer groups. Buying ETH or ETC in the U.K. seems really easy, but the exchange or broker you select is what really matters.
If you decide to just speculate on the movements of ETH or ETC, you have access to a wide array of online brokers that allow trading in cryptocurrency CFDs, as well as to many spread-betting firms that offer gambling on cryptocurrency movements.
Know how you intend to operate in the cryptocurrency market, whether as a speculator, gambler or investor, to determine if your best option involves opening a brokerage account with an online broker, placing a wager with a cryptocurrency gambling firm or buying a wallet and opening an account at a crypto exchange.