Things to Consider Before Buying Ethereum

Things to Consider Before Buying Ethereum

Ethereum is an open-source blockchain-based computing platform featuring smart contract functionality, which facilitates online contractual agreements. If you own Bitcoin and want to dip a toe into the waters of Ethereum, you’ll need to exchange it for ETH. Once converted, you can use your Ethereum to purchase goods and services, or even gold and silver, via digital currency exchanges.

Ethereum is a form of cryptocurrency, boasting one of the largest after Bitcoin. It’s distributed across more than 6,500 nodes, which means it’s significantly more decentralised than other major cryptos. Amidst the rush for crypto space, most Ethereum owners have also used it as an investment vehicle over the years.

How to Buy Ethereum

It’s important to make a distinction between an exchange that will actually sell you Ether and other platforms that only let you speculate on its price. Buying Ethereum is a simple process by using one of the more popular Ethereum exchanges.

It’s important to note that an exchange is used only for selling/buying Ether and does not provide a platform for trading.

Step 1 –Get a Wallet

Buy or install a wallet from trusted exchanges. Ether is a digital token that can be used both as a cryptocurrency and as the fuel for operating smart contracts and decentralised applications on the Ethereum blockchain. As such, it needs to be stored securely.

Step 2 –Buy Ether from The Best Exchanges

You can buy Ether from inside the wallet using any cryptocurrency supported by the wallet. However, if you want to use fiat currency (USD/EUR) to buy ETH or trade altcoins for ETH, you will need a cryptocurrency exchange account and wallets for each altcoin.

Step 3 – Withdraw Your Ether into Your Wallet

After buying Ether from the exchange, you will have to send the coins back to your wallet before using them. You may skip this step if you are trading on an exchange that allows you to trade into ETH directly.

Ethereum Investment Potential

Ethereum has a fixed supply, making it a deflationary asset. Bitcoin and Ethereum have a fixed supply of 21 million and 110 million respectively. To date, there are roughly 18 million Bitcoins in circulation and over 120 million in Ethereum.

Ethereum’s blockchain is scalable and sustainable to future technological innovations. The introduction of staking and sharding will allow the network to process transactions faster than Bitcoin. Unlike Bitcoin, Ethereum’s blockchain is not only proof-of-work but also proof-of-stake. This means that transactions can be processed faster than Bitcoin, which is only using proof-of-work as its consensus mechanism.

Ethereum has an active developer community and is being used by many companies for their blockchain needs. For example, Microsoft Azure offers Ethereum Blockchain as a Service to customers who want to develop their own smart contracts or decentralized applications on top of the Ethereum platform.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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