The first smart contract was the vending machine

Ethereum is a network protocol that allows users to create and run smart contracts over a decentralized network. Smart contracts are agreements written in code that dictates the terms and execution of their contractual clauses. These computer programs are self-contained, self-performed, and self-enforced, therefore they eliminate the need for intermediators such as government, banks, or judges. The first smart contract ever invented is the vending machine that operates under a simple statement:

money + snack selection = snack dispensed

Ethereum’s value proposition is unique. Whereas Bitcoin was only born to facilitate cross-border cash payments, on Ethereum developers can build decentralized applications (dapps) that fully expand the use of blockchain technology.

In the realm of finance applications, a new paradigm is born: Decentralized Finance or DeFi. DeFi enables its users to access traditional financial services such as savings accounts, loans, trading, insurance, and more from a smartphone or laptop connected to the Internet and without the need to go through painful KYC processes. For instance, you can get a loan using your Bitcoin as collateral. As you can see, much more than a digital payment system.

In order to run the network and compensate the network nodes (miners) for validating the transaction data stored in the blockchain, Ethereum has its own native currency, Ether. Ether also fuels the computational power required to run dapps. In essence, if a user wants to make use of these new financial services he/she will need to pay a fee in a form of ether. These fees are conveniently named “gas fees”.

So here we have a Bitcoin challenger with special properties and far more utility. Yet, it has failed to attract as much capital as the first crypto. It seems that in the Crypto Space, like in everything else, being first is more important than being the best.

How I buy Ether with Sing dollar

Ok, now we determined this new finance is the future and we want to be part of it. Learning how to use DeFi to obtain a steady income has a rather steep learning curve. I highly recommend this YouTube channel if you are interested. But fret not, you can also bet on it by buying ether: the blood of the animal.

Singaporeans can buy ether with another cryptocurrency or with fiat money (regular money). Someone can use his/her bitcoins to buy ether by creating a buy order in an exchange under ETH/BTC pair. Another way is by using their local currency: the almighty Singapore dollar. The reason why I love the sing dollar can be summarized on the following chart:

US Dollar – Singapore Exchange Rate – Historical Chart

The USD has been relentlessly depreciating against the SGD for the past two decades and counting. I wouldn’t rule out the possibility of seeing the SGD overtaking the USD in value within the next decade.

Cool, but how do I buy ether?

My personal preference to buy bitcoin or ether with SGD is Coinut. Coinut is a Singapore exchange that allows users to fund their account in SGD from their Singaporean bank with a local transfer. There are more exchanges out there that allow funding in SGD but most of them require an Xfers account or the fees are too high. Xfers is a fiat/crypto wallet that basically adds an extra step in order to fund your exchange account.

The volume on ETH/SGD is healthy enough to be able to buy ether at a fair price. Another good thing is that Coinut’s CEO is always ready to answer your questions on the official Telegram group. Can you think of better customer service?

Steps

1. Open an account at Coinut
2. Pass their KYC
3. Transfer SGD into your Coinut account
4. Create a buy limit order

KYC or “know you own customer” is pretty straightforward and the turnaround quite fast.

Remember to always create a limit order if you don’t want to buy ether at an unwanted price. Limit orders allow you to set the price you are willing to buy the asset at.

The exchange does not charge any fee on limit orders however if you decide to withdraw the asset you will get charged a withdrawal fee. All these fees are public and available in their FAQs. I highly recommend you withdraw your crypto from any exchange and sent it to your hardware wallet unless you want to trade with them in the short term.

Since this blog mainly caters to value investors and hodlers I won’t go about how you can perform day trading with the tool. As hodlers, we want to send our newly acquired crypto to our cryptowallet as soon as possible. Another option is to send it to an earning account such as the likes of Celsius or Blockfi or even provide liquidity or lending your crypto on various DeFi protocols. I will talk more about this in the coming posts.

Thank you for reading!