Ethereum is one of the best-performing assets in 2021. There is a possibility that Ether will outperform Bitcoin by the end of the year, given the current price movements. Ethereum, by all intents and purposes, remains the top blockchain for development despite the rise of its competitors. Because of how active it is.
That activity is not only on the side of Dapp development. The network had a full upgrade in April of this year with the Berlin hard fork. Also, it has approved the EIP-1559 for burning some of the fees paid to miners, meaning that the supply of Ether will decrease in the future. All of these factors will positively impact the price of ETH.
Ether will remain a top crypto asset in the future. In this article, we’ll explore how and where to buy in South Africa.
Ways to buy Ethereum
There are two parts to buying Ether in any part of the world, choosing a platform, and choosing a payment method. Both have their importance when buying any Ethereum, and each has to be considered when doing a purchase. Additionally, it is also good to consider that not all payment methods work with all platforms.
So, first, we will look at the different payment methods alone. Then, when we talk about the different platforms to buy Ethereum, we’ll reference which payment solutions work for what individual platforms. That way, the combinations will be clear in this guide.
Payment methods to buy Ethereum
The payment method is the way you will transfer the cash to the platform to buy Ethereum. The options are:
Credit or debit cards. One of the most widely used is transferring money by using a credit or debit card into the platform. Platforms work with different payment processors to allow these types of transactions. They are generally very easy to do, but since these payments work through centralized systems, they are very easy to stop or track.
Wire or bank transfer. A method that is mostly used for transactions of large sums of money, bank transfers are done directly by the bank using its own system. Banks have relations with international banks that allow them to move money to other countries. Now, these relations are not straightforward; to move money from country A to country B, the transfer goes on average by nine other financial institutions. That is why these transfers are so expensive and take so much time. But they are also very safe, as the bank ensures the total amount of the transaction.
Crypto payment. Perhaps the most simple way to buy Ethereum is when the user already holds another crypto coin. Of course, the platform has to be able to exchange that type of coin or token for Ether.
Cash. Finally, in a person-to-person transaction, it is possible to simply use physical money as a payment method.
Broadly speaking, those are all the payment methods to buy Ether. Now it is time to look at each of the platform types to buy Ethereum.
Centralized Exchanges
A common way to buy Ethereum is using a centralized exchange. A centralized exchange is a platform that works by using a clearinghouse and order books. Every time a person buys or sells an asset, they do it with the exchange. They are not interacting directly with the other users of the platform.
The reason behind this model is to eliminate counterparty risk. This prevents any of the sides of the transaction from canceling the operation or changing the terms of the deal. That is how a centralized exchange manages to keep all actors honest in that system.
Centralized exchanges work best with centralized payment solutions. Credit and debit cards, bank wire transfers are the easiest ways to buy from them. Additionally, they will accept crypto deposits that can be used to exchange one type of crypto coin for another.
The drawback is that all of these centralized systems are easy to censor and monitor. Many exchanges claim to operate in a particular country, but when users try to use a credit card or do a bank transfer, they find those services are blocked by either their bank or their government. The exchanges are also easy to monitor by agencies, and these try to look at transaction volume and other information.
Peer-to-peer exchanges
Another type of exchange is those belonging to the p2p model. Here the users are intersecting with each other, and the platform acts as an escrow account. It locks the funds of one of the parties until the other confirms the reception of the money. Once this has been done, the exchange releases the agreed amount to the other side.
That is the model Remitano uses for the core of the exchange. P2p exchanges have the same ability to accept centralized payments from credit card companies or bank wire transfers. But since you interact with a physical person, the transactions are local and are treated as regular money transfers between two individuals, not as crypto exchanges.
It is very easy to buy Ethereum in a p2p exchange. But because the transactions are not registered as crypto exchanges, they cannot be censored by a central authority or a bank. Of course, Remiotano and other p2p exchanges have web crypto wallets integrated into their sites. They can accept crypto transfers from other sources and easily exchange one type of crypto asset for another.
Finally, Remitano also offers instant swaps. These operations work in the same way as with a regular exchange, so converting one type of crypto for another fast can also be done on the site. P2p exchanges are the easiest and safest way to buy Ethereum.
Decentralized Exchanges
Another way to buy Ethereum is to use a decentralized exchange (DEX). These types of exchanges work on top of the blockchain network. In them, trading is controlled by a combination of smart contracts that exchange one type of crypto asset for another. They have become popular in recent years because they require no KYC/AML protocols.
Many of the most popular DEXs on the planet are on Ethereum, such as UniSwap, Curve Finance, 1inch Exchange, etc.
They are a great way to buy Ether, but you are not buying Ether from a DEX. In a DEX, you buy what is know as Wrapped Ether (WETH). The crypto coin Ether existed before ERC-20 tokens, so pure Ether is not compatible with smart contracts and cannot be traded in a DEX.
WETH was created to solve this issue. To mint some of it, a person sends Ether to the Wrapped Ether smart contract. The smart contract locks the ETH and gives back to the user an equivalent amount of WETH. And it is this wrapped Ether what a person gets from a DEX.
Now, if WETH is just Ether turned into an ERC-20 token, what is the problem? Well, because the Wrapped Ether contract charges a fee to do so, and because pure Ether is used to pay gas fees, WETH and ETH are not worth the same. WETH tends to be less valuable than ETH in most markets, but not by a huge amount. But it is important to know that buying from a DEX won’t give you Ether in the same way as buying from other sources.
Finally, a DEX is completely decentralized. So, DEXs don’t accept credit card payments nor wire transfers from a bank. The only way to buy from a DEX is by using another cryptocurrency. Also, a DEX can only support tokens from the blockchain they are using. You cannot buy TRX from a DEX hosted on Ethereum.
Crypto Wallets
Another way to buy Ethereum is directly from a crypto wallet. Most wallet companies in the world allow users to buy cryptocurrencies directly from the platform. The amount bought gets deposited directly into the wallet you are using, and so they are very convenient.
Of course, a crypto wallet provider is working from a centralized server. They are not an exchange, so the wallet provider chooses the crypto coin price with no market. That is why, most of the time, buying from a web crypto wallet is more expensive than buying from a live exchange. But it is also one of the most direct ways.
Crypto wallets don’t have the same financial licenses as exchanges, so they cannot accept bank wire transfers. But they do take payments from credit or debit cards, and also, some can swap crypto coins of one type for another.
Direct personal sells
The final method is to use cash to buy directly from another person. It is easy to buy this way because a person's only needs are a mobile wallet on their phone and a willing seller. Both parties meet in a public space, agree on a price, and exchange directly on site. It is how crypto was sold in the very early days of Bitcoin.
Of course, it is rather dangerous and can be complicated to negotiate the price. But it is important to know that it is always an option, and that is one of the powers the blockchain gives to people.
Conclusion
On April 22nd, 2021, Ethereum reached a new all-time high at 2,640.37 US dollars. It is one of the best-performing assets in the world, and it will only grow from here. Ethereum will soon transition to Proof of Stake, and many other updates are close in the future. It is a great time to look deeply into investing more in the future of Ethereum.
Now, if Bitcoin is more your type of asset, read 20 Best BTC Exchanges to Sell and Buy Bitcoin in South Africa (2021). The crypto economy is growing, and now is the time to jump into
it.
