Next to Bitcoin, Ethereum is the most sought-for cryptocurrency on the market right now. Not only is it a profitable digital asset for investors, but a network fuel for a range of developing software as well.
To purchase Ethereum, you have to register with one of the many cryptocurrency exchanges available online. These are platforms that let you buy or sell digital assets. Some of them accept fiat currencies, others support crypto to crypto exchanges only.
This guide will explain in great detail how and where to purchase Ethereum in the UK. First, let’s briefly talk about our recommended platform for trading cryptocurrencies, the London-based CEX.io.
Where to Buy Ethereum?
What makes CEX.io a reliable platform?
First and foremost, the platform was registered with the Financial Conduct Authority (FCA) in the UK shortly after its launch in 2013. This means that CEX.io complies with their rules, AML policies, and user verification checks like the Know Your Customer check (KYC).
CEX.io supports over 10 different cryptocurrencies including the top five: Ethereum, Bitcoin, Bitcoin Cash, Ripple, and Litecoin, plus developing coins like Bitcoin Cash, Tron, Stellar, Dash, BitTorrent, MetaHash, and ZCash.
If you’re a beginner to crypto trading, you’ll be thrilled to know that you can purchase your first ETH with GBP, once you deposit them into your account. You can do this by linking a bank account and paying via bank transfer or credit/debit card. However, we must mention the additional 7% fee that CEX.io charges for its services.
The platform is praised for the great level of security users can enjoy, the efficient support team, and the range of trading tools aimed at advanced traders that include cross-platform and margin trading with up to 10x leverage among other options.
What is Ethereum?
The reason why we didn’t have digital coins prior to Bitcoin was the lack of proper technology to support them. All that changed once Satoshi Nakamoto developed the blockchain technology and designed a digital ledger that could safely store online transactions.
In fact, blockchain can store any kind of data permanently and irreversibly. This means that we can leverage the technology for so much more than just money payments via the Internet. One of the first software engineers to have such ambitions was Ethereum’s founder, Vitalik Buterin.
Both Bitcoin and Ethereum blockchains are built on the basis of a peer to peer network where users are able to “mine” coins using the proof of work consensus mechanism. This consists of solving a complex mathematical puzzle. Once they find the solution, they can verify the upcoming transactions. Ethereum’s native token is called Ether (ETH) and is both a store of value and collateral.
In addition to this, Vitalik wanted to use the technology to transform all sorts of data into computer code and keep them on the Ethereum blockchain. This way, users would have the option to create e-contracts and applications that would be completely decentralized.
Let’s take the decentralized applications (dApps), for example. On traditional applications such as Facebook or Instagram, there’s a central authority that controls all the data and could easily leak and misuse the information for profit. DApps, on the other hand, rely on cryptographic proof instead of trust in intermediaries, proving a much safer and private alternative.
You won’t be able to build your dApp if you don’t know what smart contracts are and how to include them in your application.
To put it in simple terms, smart contracts are regular contracts translated into computer code and attached online. Instead of hiring an intermediary such as a lawyer or a notary, the two or more parties that want to come up with some kind of an agreement, let the blockchain process their contract instead.
The smart contract is self-executing but holds onto the exchanged value until all the predetermined conditions have been met by the parties involved in the contract. Now let’s see how smart contracts work using a real-life example.
Alice wants to buy Bob’s house so they create a smart contract on Ethereum with their agreement that includes the price Alice has to pay for the house. Therefore, the smart contract will look something like this: “When Alice pays Bob 1,000 ETH, then Alice will receive the ownership of the house”, written in Ethereum’s programming language.
Now, why would someone prefer smart contracts over regular ones?
First of all, because you save money by cutting off the service costs for intermediaries, and some extra time too by skipping all the paperwork. Next, you don’t have to worry about the other party not sticking to the agreement because the smart contract will send constant reminders and prevent them from changing the original data.
There’s no doubt that the adoption of smart contracts will lead to greater automatization and precision in industries like health care, business management, insurance, housing, property, supply chains, etc.
Who Created Ethereum?
Vitalik Buterin, a Russian-Canadian computer programmer, is the brains behind the Ethereum platform. He’s originally from Moscow but emigrated to Canada when he was six.
Vitalik’s father was a computer scientist himself and was the one who introduced his son to Bitcoin. At first, Vitalik rejected the idea but after coming across the Bitcoin concept again on the Internet, he started reading more about the technology and how it works.
He started writing for Bitcoin magazines that paid in bitcoins in order to earn these coins as he didn’t have suitable mining hardware to do it by himself. He enrolled in university and studied computer science for a while, before dropping out to travel across North America and Europe in search for Bitcoin projects to work on.
In 2013, he started working on the white-paper for Ethereum, proposing formulas and extra features that could be added to blockchain technology to make the platform work. The following year, he was awarded $100,000 from the Peter Theil fellowship. Using the money, he continued working on Ethereum and launched the platform in 2015 when he was only 21 years old!
Cons of Ethereum
It seems like Ethereum with its blockchain-based applications can revolutionize a range of industries and reduce unnecessary costs, delays, and frauds. However, we shouldn’t accept this technology at face value without looking into its potential shortcomings.
Although one of the purposes of technology is to speed up human work and reduce human errors, when it comes to smart contracts or dApps, the code is still written by humans who might make mistakes in the input data. The irreversible nature of the blockchain can turn these naive mistakes into major errors.
Another potential problem lies in the upcoming shift from the proof of work method to the more advanced proof of stake method. Hopefully, this will be done smoothly so as not to overwhelm and slow down the whole network.
Ride The Wave
We believe the future looks promising for both Ethereum and the applications built on its network.
The team is dedicated to finding inventive solutions to increase the speed and processing power of the network. At the moment, Ethereum’s blockchain can only process 15 transactions per second. For comparison, NEO, another popular blockchain, can process up to 10,000 transactions per second!
Apart from the announced adoption of the proof of stake method to increase energy efficiency, other short-term plans include the implementation of “sharding”, a way of assigning roles and grouping the nodes when validating transactions.
There’s also the Plasma project, a protocol that will solve Ethereum’s scalability problem by creating another layer on top of the main blockchain to process unnecessary data and save more memory.
In the long run, the use of blockchain technology on Ethereum can turn whole organizations into Decentralized Autonomous Organizations (DAOs) regulated with smart contracts.
We’re excited to see these projects coming to life soon!