What is Ethereum?
Ethereum is considered one of the pioneers of blockchain technology behind Bitcoin. It is an open source blockchain system that features smart contract functions. This means contracts can be facilitated, verified and enforced without 3rd party interference.
Ethereum has become more and more popular as both an investment and also a useful blockchain to build other systems from such as payment, sales management, etc…
Who is behind Ethereum?
Vitalik Buterin proposed Ethereum in 2013 and the DAO Project was put together to start a crowdsale to fund Ethereum and the project.
Vitalik is a cryptocurrency researcher and foresaw where Ethereum could enhance the world of blockchain technology.
Once the project was running, there were “hack” attacks against the DAO Project, and it collapsed in 2016, but Ethereum didn’t go down too. Actually Ethereum split into 2 separate blockchains with one being Ethereum and the original staying Ethereum Classic.
How does Ethereum Work?
Ethereum works in a similar fashion to Bitcoin.
As Ethereum transactions occur, records must be logged into the digital system called the Blockchain. But these logs must be done by sophisticated computer systems. Those who own these systems can allow their computer to log these records into the Blockchain and as a reward for their time and service, they receive Ethereum.
And Ethereum can be divided down to small units.
So essentially, the Ethereum system via Blockchain is not controlled by any 1 entity but by many through Blockchain logs that cannot be altered after entered. It is all done using cryptography, hence cryptocurrency.
How can I buy Ethereum?
Buying Ethereum is simple.
You will first want to attain a “wallet.” The wallet is your own personal digital storage place for your cryptocurrency.
Each wallet has a private key and a public key. The private key is for you alone to manage your Ethereum while the public key is used to send and receive Ethereum or other digital currencies.
There are various types of wallets with different features. You can discover more on crypto wallets here on Investing Online.
At that point, you can purchase Ethereum from other people on marketplaces and they will send it to your wallet via the public key. Or, you can join any number of exchanges where you can purchase Ethereum and transfer to your wallet.
How can I trade Ethereum?
Trading Ethereum works the same way as buying Ethereum. You can trade 1 cryptocurrency for another via exchanges or you can trade peer-to-peer via many marketplaces.
As trades are made, miners use their systems to log the records and they are sealed to any changes.
So any buys or trades are dependent on the time it takes for a miner to log that record. It could take 1 minute or ½ hour.
Naturally, miners are looking for the higher paying logs first.
How to choose a Ethereum Exchange?
Choosing a Ethereum exchange can be nerve racking for many who are just starting their Ethereum investment strategy.
Keep abreast of all our reviews here which can help you choose. But there are 3 properties you should consider when choosing a Ethereum exchange:
- Where you are – Regulations on cryptocurrency exchanges are still being developed. But some exchanges will not accept investors from certain areas.
- Payment method and fees – Some exchanges may accept pay systems like Paypal, Neteller and others. And others may only accept credit or debit cards. Plus, you want to look at fees incurred such as miner fees and conversion fees.
- The currency you want to purchase – Most exchanges carry Ethereum but if you are seeking another cryptocurrency, the exchange may not carry it.
Overall, Ethereum is not as difficult to buy and trade as it may seem.
If you have any questions, feel free to contact us and we can help you proceed. And research Investing Online as your questions may have an answer on our pages.