During the pandemic, a lot was happening in the investment market. For example, more people were investing in blue chips such as Tesla, and the bulls were running all over.
A good portion of the investors discovered bitcoin and other cryptocurrencies. The investment space has not been the same since then. The options in the investment world grew significantly.
While ethereum is not as popular as bitcoin in the crypto market, it is making long strides to catch up. If you are thinking of making forays into the world of ethereum, the following guide may be handy.
What is Ethereum?
Ethereum is the brainchild of Vitalik Buterin, a former tech blogger and student in Canada. Vitalik dropped out of college after coming across Satoshi’s conceptualization of bitcoin and realizing its massive potential.
He contacted Dr. Gavin Wood, and together, they worked on developing ethereum, which grew to be the second-best crypto after bitcoin. By January 2014, ethereum was conceived, and the rest is history. Ethereum would go on to revolutionize distributed ledger technology.
But what is ethereum?
Typically, ethereum is the source of all open source applications. The applications of blockchain technology are not alterable, thanks to blockchain innovation. The asset is as good as bitcoin, and therefore an excellent investment for people looking for options apart from bitcoin.
The ethereum network has its currency called ether or ETH and draws several similarities to bitcoin. Among them is that both ethereum and bitcoin are decentralized. But there are differences between the two.
Differences Between Ethereum and Bitcoin
The purpose for creating ethereum is quite different from that of creating bitcoin.
Created in 2009, bitcoin was to be an alternative to government-issued currencies. On the other hand, ethereum was created as a network for decentralized contracts. Ethereum is to the contracts while bitcoin is to fiat. Based on this, you can see that ethereum and bitcoin are not in competition. They are complements of each other.
The ethereum dream is to develop and secure the network, and this is where the dynamic ethereum community comes in. But who is in this community?
The Ethereum community has an able team of core developers led by Vitalik Buterin, who make sure stakeholders’ wishes are taken care of. These developers use hard coding to ensure the integrity of blockchain technology.
On the other hand, miners run the nodes responsible for confirming the transactions in the network. They update the ledger and ensure the network is secure.
The community also has researchers that provide the necessary technical capability into the various complex ideas conceptualized by the community. They breathe possibilities into their dreams.
On the other end are Independent developers that create the Apps and smart contracts and are responsible for breathing life into the blockchain. But we also have clients, an essential part of the community. Without them, there would be no need for blockchain.
Lastly, some organizations fund and facilitate the blockchain and also use the decentralized applications.
How You Pick a Platform for Trading
There are several platforms that you can use to trade ETH. The most popular and respected among them include Gemini, Binance, Kraken, Coinbase, and Bisq.
- Gemini is the only platform at the moment that protects customers against data breaches. It has insured wallets. Other benefits include earning interest on cryptos.
- More advanced traders will find Binance a great platform. The platform is less simplistic, offers lower fees, and is a great place to trade ETH and other altcoins. Some traders swear that Binance is the best platform for ETH buying.
- Kraken stands out for its fantastic customer service and superfast bank withdrawals. If you are the kind of trader that needs a bit more holding of hands, this platform is the one to use.
- Coinbase has one of the most straightforward interfaces and is easy to navigate. As a result, it is an excellent place for beginners. Some of its shortcomings include higher fees than some of the other platforms.
- Bisq’s strength is decentralization, with servers spread all around the world. That means the platform is more resistant to breaches than most of its peers. But accessibility is a little less given that you can only use wire transfer to make purchases.
How You Purchase Ethereum
There are several ways to acquire ETH. For this demonstration, we are going to use the most effortless and the safest.
How You Use or Spend Ether
Someone may ask, ‘why do you need to purchase ether?’ The simple answer to that is that ether is a sort of doorway into the ethereum blockchain.
Ether may never transition into a mainstream currency, but it is excellent for cryptocurrency speculators. The majority of the ERC20 tokens use ether as the main gateway.
That means demand for ether is going to rise as the decentralization of applications grows in popularity. In other words, owning ETH may prove a wise investment decision.
Ethereum is only after bitcoin as the most popular crypto asset. The crypto’s growth curve is elaborate and well-structured, and that means it has the potential to be an excellent investment. No doubt there are good prospects for growth, but that does not mean you should throw all caution into the air. Always be careful when dealing with crypto investments. A rule of thumb, don’t invest more than you are ready to lose, even for promising assets such as ETH.