Ethereum is one of the world’s most popular cryptocurrencies. After its emergence in 2015, its current market capitalization is estimated to be nearly 20% of the global crypto market. Its incredible popularity has been steadily growing since its release, but it hasn’t all been due to the crypto. Ethereum’s recognition comes from the fact that it is so much more than an exchange medium or a store of value. More than digital money, it is a computing network powered by a decentralized system.
Let’s examine some of the reasons why Ethereum has been gaining so much traction in the trading world and why experts recommend it as one of the best virtual currencies to try purchasing whether you’re a new trader or are already an experienced investor.
What is Ethereum?
In order to understand Ethereum’s appeal, it’s important to have a good grasp on what it means exactly. In simple terms, it is a network used for digital money as well as applications and financial services. In this sense, the blockchain used is a place that hosts thousands of games and banking apps. The decentralized platform employs its own currency known as Ether. However, the blockchain is so trustworthy that several other digital currencies run on its network.
But what is the blockchain? It’s a decentralized public ledger where everything is verified and recorded. The information is arranged in blocks of data that are linked to one another. After one block is completed, a new one starts and is added to the chain, hence the name. Once information has been added to the blockchain it can’t be modified or altered in any way. This means that if you ever happen to make an incorrect transaction there’s no way to modify it. If you send the wrong person money, the only way to get it back is if they start a new transaction and return the amount to you.
Everyone participating in the blockchain can access an identical copy of the ledger, and the network isn’t operated or managed by any third-party individual or entity. Instead, the management is under the supervision of the ledger holders. Every transaction that takes place uses cryptography to keep everything safe and secure.
Users also have the opportunity to create applications that run on the blockchain and use Ether. Much like software runs on a device’s software, these apps can store data and handle complex transactions and processes. When you keep all these aspects in mind it becomes clear that Ethereum’s success comes from its multilateral, far-reaching and innovative uses which go much further than buying and selling crypto. However, that doesn’t make it any less of an important aspect, so let’s delve a little into that.
Ether
Although the terms Ether and Ethereum are often used interchangeably, they don’t designate the same thing. While the latter refers to the entire blockchain connection, Ether is the crypto itself. If you’re looking to gain insight into how to buy Ethereum, you may feel like it’s a bit tricky in the beginning. However, it’s simpler than you think if you follow a few easy steps. As one of the most popular digital currencies out there, getting Ethereum is not very difficult.
The first thing is to create an account on an exchange app, such as Binance. You’ll need to verify your account so be ready to provide the necessary documentation that can attest your identity upon request. The next thing you want to do is establish how you’re going to purchase your coin. You can do this via credit or debit card, bank deposit or through P2P trading. After you’ve decided which option works best for you and are aware of the additional fees that come with some of the options, you can commence with your first purchase.
One of the most important things to keep in mind is to find an adequate way to store your virtual money. You can choose to keep it in the blockchain for a small fee, but you can also acquire wallets. They don’t work like traditional wallets in that your crypto isn’t actually stored in them. It remains on the blockchain, and what you’re actually storing are the passwords and passcodes you use to access your money in the system. It’s crucial that you keep them as safe as possible and take all the necessary precautions. Anything else could cause you to lose entry to your own funds. And when that happens, it’s usually forever.
There are two types of wallets, either software or hardware based. While the first ones are more susceptible to hacking, as their internet connectivity means that hackers can potentially attack the program and gain access to your Ethereum, the hardware version must be protected as well. Usually resembling a USB drive, these devices can similarly cause you to lose entrance to your account if they become damaged. As such, taking good care of your wallet should be one of your top priorities when you begin trading.
The benefits
Ethereum wouldn’t be as sought after as it is if it didn’t offer some additional benefits compared to other crypto. The main one is the sheer size of the network. Ethereum has persisted in business over the course of a few years, during which time it has amassed a loyal global community and created the largest blockchain ecosystem.
The wide range of functions is similarly important, as apart from the currency there are many other processes that can be done within the blockchain, ranging from decentralized finances to purchasing the highly sought after non-fungible tokens. Ethereum is also constantly changing and innovating. This has put it at the forefront of network discoveries and made it a favorite among developers and those simply interested in tech. Given the popularity, it has also meant that Ethereum has become the go-to place to find all the new and exciting developments in gaming and applications.
If you want to trade in crypto and test out some of the latest technological developments, the Ethereum blockchain is the spot to choose.