Ethereum has become one of the more notable cryptocurrencies in recent years, with a very high market cap and a ranking within the top three crypto types worldwide. While its value can be very high per coin, it also fluctuates rapidly, turning high profits each time.
But how do you buy it? What tools do you need to get started if you are new to crypto?
What is Ethereum?
Ethereum is a cryptocurrency that uses an open-source blockchain platform built around decentralized applications (DApps). In simpler terms, it is a digital currency that acts independently from large banks and government control, as well as offering more security for your money.
Launched back in 2015, Ethereum (ETH) has become one of the most used digital currencies in the world, taking the second spot in the top three with ease. Most of the unique DApps only exist on the Ethereum blockchain, and the system itself is unique to ETH.
What is Ethereum For?
As a cryptocurrency, Ethereum is designed for a multitude of uses. Many people use it as an actual currency, buying and selling goods and services without needing to exchange their own details or send actual money from their bank account.
However, a far more popular use is to treat ETH coins like stocks – buying low, selling high, and trying to turn a profit where possible. The high value of ETH means that a single coin could jump by $400 or more in only a couple of days, allowing for some very quick but very risky moves.
For example, if you were to buy $3000 of Ethereum and sell it for $3500, that $500 profit is yours (at least once any relevant taxes are applied). This could happen over a matter of days or even hours, depending on how many coins you have and the total profit you want to make.
How Do I Get Ethereum?
Ethereum can be earned in three ways: mining it, buying it, or trading for it.
Etherum is mined using computer power, which helps solve equations related to transactions and account balances. Proof-of-Work is the current system, which uses all computers on the network to help process and approve transactions.
Mining involves leaving your computer to ‘do work’ and process other users’ transactions, checking that all of the data lines up as expected. This not only increases security in general but awards you with a coin every so often.
Buying and Trading
You can use cryptocurrency exchanges, like the one at this link, to buy or trade for Ethereum and other cryptocurrencies directly. Buying them is as simple as using real-world money to purchase as many coins as you want, which get added to your own personal digital wallet.
Trading requires you to already own some cryptocurrency. Since all crypto types have a value, you can often trade them for other types of crypto based on their relative values to one another. If you wanted to use $300 coins to buy $3000 worth of ETH, then 10 of those coins could be traded for it.