A beginner’s guide to Ethereum
Ethereum is often described as the second most popular cryptocurrency in the world after Bitcoin but it’s much more than that. Ethereum is probably best described as a decentralised, open-source, blockchain platform.
Ether is the native cryptocurrency of the platform, and it is generally Ether tokens that traders are buying and selling when they talk about trading Ethereum. Ether is traded under the symbol ETH at cryptocurrency exchanges and brokers and the currency can be referred to as Ether, ETH or Ethereum.
To complicate matters a little, other digital assets and even other cryptocurrencies can be built on the Ethereum platform. The software allows for the creation of smart contracts and digital applications (dApps) that can be used in a variety of ways. The Ethereum platform was founded by a group of programmers, the most prominent of whom were Vitalik Buterin and Gavin Wood. The founders certainly benefitted from launching the platform; it was recently reported that Buterin is now the world’s youngest crypto billionaire. However, the Ethereum network is not owned by its founders or anyone else. It is truly decentralised, meaning no one individual or entity has ownership or control of Ethereum.
How do I purchase Ethereum?
If you are thinking of investing in Ethereum, your best bet is to open an account at a broker or centralised crypto exchange that allows easy trading of cryptocurrencies. You can also buy ETH through decentralised exchanges (DEXs). As already mentioned, you are looking for the symbol ETH when checking out which brokers and exchanges offer these digital coins. Finding somewhere to buy and sell Ether shouldn’t be too hard, as it is such a popular and commonly traded altcoin. When choosing a broker to buy Ethereum there are a few things you might want to consider, such as:
- What is the minimum amount you can deposit to start trading?
- Which other cryptocurrencies can you trade?
- Can you trade other assets, such as forex and stocks?
- Does the broker offer trading via CFDs?
- Is automated trading or copy trading available?
- What deposit methods are available?
- How easy is the platform to navigate?
The last question is easier to answer if you pick a platform that offers a demo account. Using a demo account, you will be able to practice trading on the platform, explore the tools and features available and get a feel for how things work, before actually investing real money in crypto trading.
Once you have picked a broker, and maybe tested out their platform using a demo account, it’s time to sign up for a live account and start trading. Signing up at a cryptocurrency brokerage is usually quite quick and easy. You will simply need to register online, provide any requested documentation, and fund your account.
Brokers and exchanges will have a range of ways to deposit money to trade Ethereum. You can use fiat currencies, other cryptocurrencies, or other payment methods such as credit cards to deposit into your trading account. Once your trading account is funded you can buy, sell, and trade ETH and other cryptocurrencies 24 hours a day, 7 days a week. The crypto markets never sleep. You can also buy Ether fractionally, as you can Bitcoin. This means you do not have to buy a whole coin and can get started with a small investment.
Do I need an Ethereum wallet?
You will need a virtual application known as an Ethereum wallet to manage your ETH tokens and transactions. A wallet is simply a tool you use for interacting with your Ethereum account, much like a banking app. It allows you to see your current balance and transaction history, send and receive digital coins, and connect to other applications.
Advantages of buying Ethereum
Many people are investing in Ethereum in the hope that the currency will appreciate and they will be one of the next crypto millionaires. However, this digital currency has some very practical day-to-day applications as well. ETH can be easily exchanged for other cryptocurrencies and digital assets and is also accepted at a growing number of online stores and even real-life retail outlets. Investing in Ethereum also gives you access to smart contract facilities and dApps.
If you are thinking of investing in Ethereum, you are about to enter a volatile, and complex decentralised market. But if you do your homework and find the right platform to trade on, the opportunities ahead are exciting.
