IMPORTANT

If you already have some Ethereum in a Coinbase (or other centralized exchange) account, you can proceed to Day 2. If you are unable to access a centralized exchange because you don’t have a bank account or there aren’t any options in your part of the world, send me a direct message on Twitter and I’ll try to help.

What are centralized exchanges?

Centralized exchanges are online platforms for buying and selling cryptocurrencies. They are the most popular way for normal people to exchange fiat currency (eg, Dollars, Euros) for cryptocurrency.

Centralized exchanges look and feel like online brokerages. They have lists of assets, price charts, and news blurbs. They allow users to link a bank account and easily make deposits and withdrawals.

There are a number of centralized exchanges, though not all are available in all regions of the world. Coinbase and Gemini are two of the most popular exchanges in the US. (Other options include FTX, Binance, Kraken, etc. I’ve included links to several exchange directories at the bottom of this article.)

What is a custodial wallet?

A critical function of centralized exchanges is to hold the keys to your digital assets in a custodial wallet. This means you’re entrusting a service provider to protect your assets instead of holding them yourself.

Using a custodial wallet typically means you have to go through a KYC (Know Your Customer) process and submit various documents to complete onboarding. It also means you don’t have to worry about losing your keys.

Buy some Ethereum

Here are five steps to follow. My example uses Coinbase, but the process should be similar for other exchanges.

(If you run into trouble, Coinbase has a step-by-step guide you can consult here. If you are unable to access a centralized exchange because you don’t have a bank account or there aren’t any options in your part of the world, send me a direct message on Twitter and I’ll try to help.)

1. If you already have a Coinbase account, you can go straight to Step 2. Visit the Coinbase website and create your account. Provide the required information, add a payment method, and verify your account.
2. Once you’re verified, click buy and choose Ethereum (ETH) from the list of available cryptocurrencies. Pro tip: don’t buy Ethereum Classic (ETC) by accident!
3. Input how much Ethereum you want to buy. For the activities over the next two weeks, I’d recommend purchasing 0.1 ETH (equiv. to $300 at April 2022 prices). You can click the arrows to toggle between ETH / USD to see the latest exchange rates.
4. Once you’ve selected an amount, click "preview" to see the amount of Ethereum you’ll be buying, the current price, the payment method, and the Coinbase transaction fee.
5. If everything looks OK, click “buy now” and, voila, you have purchased your first cryptocurrency!

Many people stop here. If you were simply looking for exposure to cryptocurrencies as an investment, then you could stop here too.

But that’s not why you’re here. You’re here because you want to explore the new frontier that is web3.

You’ve bought your ticket - this is your last chance to get off the train. See you tomorrow!

Further reading