With so much buzz surrounding Ethereum, investors are now wondering if it’s a good investment.
Ethereum is the second-largest crypto after Bitcoin and the first to have the volume to compete with such a massive name in the crypto world. But Ethereum differs from Bitcoin in several ways, as it’s a software platform serving myriad purposes. It was also designed for long-term organizations on the blockchain, making it one of the top preferences among investors and developers worldwide.
Ethereum has big aspirations: it’s a platform that supports digital currencies (having its own coin – ether), but it also supports various decentralized applications without involving a third party, thus helping individuals master their data.
Without further ado, here is a comprehensive guide about Ethereum and how did this crypto manage to be one of the most sought cryptocurrencies:
Table of Contents
What is Ethereum?
Ethereum’s creator Vitalik Buterin once said that its invention is aimed to do far more than Bitcoin. And it does. You can use it to store cryptocurrencies or build tools and applications, which other traders or developers can use to borrow or lend. As stated by Buterin, Ethereum is a programmable cryptocurrency serving various purposes, but it cannot do everything simultaneously. Ethereum uses blockchain technology, which allows for secure data transfers and financial agreements, and Ethereum’s database is cryptographically chained to record and verify transactions effectively. Individuals participating in the Ethereum network can use its native token (ether) to purchase and sell services and goods and see all past transactions. Besides this classic use, people can use the platform to create applications (dApps), including marketplaces for virtual art, games, and DeFi (decentralized finance) applications. With such a large spectrum of functions, it’s no wonder Ethereum has gained ground in this crypto environment. We cannot forecast what is next regarding this currency but only assume it will touch the skies.
Ether vs. Ethereum: what’s the difference?
People tend to mistake these two – Ethereum and ether are, beyond any doubt, interconnected, but they’re not the same. The simplest explanation comes from Allan Farrington, who says that Ethereum is the technology, while ether is the actual digital currency fueling Ethereum. Ether can be used in financial transactions and can be held or exchanged. If you’re interested in Ethereum, you can invest it by purchasing ether on currency exchange. Ether has, in essence, a variety of purposes, but one of its most recognized functions is that it’s used to pay a fee for the Ethereum platform. Developers pay this fee for building new decentralized tools and apps or tokens. Gas fees (as these fees are also called) are paid in ether, so any developer looking to create things on Ethereum must purchase ether to pay these fees. Remember that gas prices vary depending on the kind of apps created so that they can get higher or lower accordingly. It’s like you pay your subway fare – the more you want to ride the train, the more you pay.
How to buy ETH
Since Ethereum is the network itself, you practically don’t buy Ethereum but ether, the network’s currency. We wanted to clarify this from the beginning because users have common misconceptions. Some people say that they buy Ethereum, which would be impossible. Thus, you purchase ether to invest in Ethereum.
Now that everything is clear, we can move to the long-awaited topic: how do you buy ether? Following these steps:
- Choose a cryptocurrency exchange. Without crypto exchanges, buying and selling a virtual coin wouldn’t have been possible. Binance is the largest exchange, so if you’re interested in purchasing ether, go and check the live Ethereum price and create an account with the provider. You must confirm details like identity and residence and then connect to your bank account to purchase the digital coins. It would be helpful to know that there will be some fees you have to pay based on factors like the deposited amount or transactions you want to perform.
- Deposit cash. It’s essential to deposit fiat money like USD in your trading network so that you can start your crypto exchange. You can also connect your debit card or bank account to fund purchases of the currency.
- Purchase ether. Now that you’ve funded your account, you can buy ether. Depending on your intentions, you can hold the currency for the long term, trade it, or sell it. You may want to use the mining or buy-the-dip tactic to make the most of your trading adventure, but make sure you research each method.
- Use an electronic wallet. In this case, you can store the digital coins in your trading network’s electronic wallet or transfer them to another digital or cold wallet. The latter is more recommended because it ensures double protection in case you’re hacked.
What are the benefits of purchasing into Ethereum?
Ethereum is one of the most well-established crypto platforms, and it promises faster transactions than other networks, which is why it’s one of the most preferred platforms in this regard. Not to mention that it has the largest ecosystem in cryptocurrency and blockchain.
Another significant benefit is given by its wide range of functions. We’ve already mentioned them, but just as a quick reminder: Ethereum can process various financial transactions, store data for different applications, execute contracts, and more. The platform is also constantly developed thanks to the contributions of developers building dApps.
Ethereum doesn’t involve third-party intermediaries like banks and lawyers, so transactions are completed at once.
Why is Ethereum a no-brainer currency to invest in right now?
Is investing in Ethereum an intelligent financial decision? Specialists believe so. With Ethereum 2.0 on the horizon, the platform is supposed to turn into proof of stake. So, this could be profitable but think seriously about investing in Ethereum as soon as possible and benefit from its current price because it’s not known how long it will remain like this. ETH price could rise even higher and is expected to dent Bitcoin’s market in the near future. With such news, the answer to the question mentioned above is pretty clear.