With the upcoming launch of the Rooshocks NFT project, I wanted to put together a quick article on the process of purchasing Ethereum. Ethereum (ETH) is the currency that Rooshocks is priced in and it is the currency you will need to mint one of the NFTs. You will therefore need to know how to buy Ethereum. This article will be based on the process here in Australia, but the steps will be very similar for most people across the world. You can also apply most of these same steps across other crypto currencies.
Choosing the Right Structure
The first thing you need to do before purchasing ETH is to have an idea of what the best tax structure for the purchase will be. This will differ depending on your own personal situation. There are many things you need to consider in making this decision such as what your plans are with the ETH and what other income you have. You should seek professional advice from a tax agent or accountant in this area.
In Australia, the main options you have are;
- Individual Name
- Joint Names
It’s important to get this right as once an entity owns an asset, it can be costly to move that ownership. In a lot of situations, it will trigger a capital gains tax event here in Australia.
Choosing an Exchange
Once you’ve made a decision on which structure you will be making the purchase under, you then need to select an exchange. The exchange is how you will make the purchase of your ETH. You will also be able to use the exchange to purchase a range of other crypto currencies. Each exchange has a different set of crypto currencies. They will nearly all have the big currencies (such as Bitcoin and Ethereum) but will likely differ in what smaller currencies they have available. Each exchange also has different features and fee structures.
One key decision will be whether you use an Australian based exchange or an international exchange. While there is no correct answer, it is important that you do your research on which exchange you use. There have been some horror stories in the past of exchanges going bust and people losing all their funds. If you do go with an Australian exchange, you will likely need to do a KYC (Know Your Customer) which will verify your details. This is one of the ways how the ATO (Australian Tax Office) will know you may be investing in Crypto.
Signing up for an exchange will be different for each exchange. If you are investing through a trust or company, you will need to make sure the exchange you select supports this structure type. It is more likely that an Australian exchange would support an Australian based entity. If you are using a trust or company, you will need to provide more details compared to if you are investing as an individual.
Funding Your Exchange Account with AUD (Australian Dollars)
Once you’ve signed up for your exchange account, you will then need to fund it with AUD. This will allow you to then purchase ETH or other crypto currencies. Most exchanges will allow multiple options to fund your account. These may include;
- Pay ID
- Bank Transfer
- Credit Card
I always suggest looking for an option that carries no fees. Most exchanges will offer a situation where you will get an instant deposit and pay no fees.
As always, make sure you are only depositing money you can afford to lose. Investing in crypto is a risky investment and therefore you need to do your own research before investing. If you are unsure whether investing is right for you, you should seek professional advice.
Now you have purchased ETH, you need to have a brief understanding of crypto wallets. Your ETH will be sitting in a wallet that is on the exchange you have purchased. This does potentially put your funds at risk, as if the exchange goes bust, you could lose your funds. There are other options such as online wallets (such as Metamask), hardware wallets (such as Ledger), or even paper wallets. I highly recommend doing further research on how crypto wallets work and the security functions they each have.
To purchase a Rooshocks NFT, you will need to hold your ETH in a Metamask wallet. Keep an eye out for a future article on how to setup a Metamask Wallet. If you are transferring to any other wallet, please make sure you copy and paste the wallet address. If you send your funds to the wrong address, your funds will be lost.
I hope that article has helped guide you through the process of buying Ethereum. If you have any questions or any questions about the Rooshocks NFT project, please don’t hesitate to contact me.
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