Ethereum: it sounds like a mineral in a sci-fi film. Fortunately, it isn’t. It’s a cryptocurrency you can trade. In fact, it is one of the three most successful cryptocurrencies in the world. So powerful that some analysts have it taking over Bitcoin in the next couple of years.
So what makes this currency so desirable, and how can you get some? This article will answer both these questions in a way that would make Ethereum accessible to any level of trader.
How to invest in Ethereum
This article starts from the very beginning because everyone – beginners to veteran traders – should be able to know how it’s done. So that when you reach the end of this article, there will be no questions left about how to do it.
Step one: The platform
First, you need to get yourself a trading platform. You might already have one you’re comfortable with, but as technology changes and different companies present their innovations, no harm in looking around on occasion. If you don’t have a preferred platform yet – this would be your first step for any kind of trading.
Of the platforms that offer Ethereum, EverFX is a great regulated platform that offers Ethereum fiat exchanges. Don’t know what fiat exchanges are? Keep reading!
You should pay attention to which type of exchange the platform offers. With cryptocurrency, there can be 2 types of exchange:
- Fiat Exchange is what happens when you exchange cryptocurrency for local currency (for example, when you exchange ETH for USD or EUR).
- C2C happens when you exchange one brand of cryptocurrency for another (for example, when you exchange ETH for bitcoin).
Ethereum is in the top three list of global cryptocurrencies, which makes it a great candidate for fiat exchanges. Many investors also keep separate accounts for both fiat currency and C2C exchanges.
As an investor, you have to be aware that the cryptocurrency field is very dynamic, as it is based on constant technological innovation. This also means it’s not regulated. Legal systems don’t move as quickly as technology. That makes cryptocurrency an incredible opportunity for huge gains. But it’s also a significant risk, as there is not much protection from fraud.
To minimise risk when choosing your trading platform, take these steps:
- Find out where the company is based.
- Check if the company has a valid license.
- Test the security of the website.
- Check how secure your money is with this company.
- Look up the company’s managing executives.
Step two: The account
Congratulations, you have done your research and found your platform! Now you need to set up your account with this platform. If you’ve ever set up an account with a broker, this should be easy for you. Although each platform is different, this stage is pretty much the same in all of them, as this is the required bureaucracy of trading. You will be asked for pretty much the same details – name, address, ID or social security number, and other such information. Even if you have no experience whatsoever, this should still take no more than a few short moments. Following this process, you will be asked to verify your identity. Platforms use up to 3 stages of verification. If this is not a part of your setup stage, you should try a different platform, as any regulatory body requires this verification.
This might take a bit of time – between 2 hours and 2 days.
Step three: The deposit
The fiat exchange platforms can easily allow you to add money to your account on the platform via a bank account or a debit card. While most cryptocurrency exchange platforms will accept sums as small as 5$, it’s recommended to invest more substantial amounts, as each deposit incurs a fee.
The deposit in C2C exchanges can add a level of complication to the transaction. A user might need to transfer cryptocurrency from one point to another by code. This type of transfer can take up to an hour.
Step four: The trade!
Have you completed all the steps? You’re ready! You can start buying Ethereum. This step is pretty self-explanatory. Moving right along.
Step five: The withdrawal
If – after conducting one or more transactions – you have ETH stored up, you can withdraw your ETH into your bank account or into a thing called the ETH Wallet. The ETH wallet is – in simple terms – a digital wallet that stores your digital currency, passwords, and payment information. All platforms should be equipped with a cryptocurrency Wallet option.
If you chose a fiat exchange platform, your bank account should already be on file with your platform so you can send your ETH directly there.
If you are using a C2C platform, you’ll have to transfer your ETH to a fiat exchange by code, then sell your ETH there to get the cash to transfer to your account.
Now that you know how to get your hands on some Ethereum, you are probably wondering why it’s so appealing. ETH’s mass appeal has many reasons, but three of them stand out.
Reason One: The chain
Cryptocurrency uses blockchain technology – among other things – to remain “inflation-proof.” As a decentralised asset, it is not under the influence of banks or governments. For context, here’s a description of blockchain in simple terms: each transaction is saved on a “block,” and each block is attached to a chain. Anyone who has a connection to this chain can see all the blocks. In effect, members of the chain see all the transactions. That is how Bitcoin uses this technology.
Ethereum is based on this technology, but it went a step further. Ethereum is written in the Turing-Complete code language. A computer must have the capability to run any algorithm in order to be Turing-complete. Thanks to this code language, any script can run on Ethereum. Subsequently, Ethereum’s chain records transactions much faster than bitcoin’s blockchain. Bitcoin takes 20 minutes to process a transaction, while Ethereum only takes 12 seconds. On its own, this technological development is enough to give Bitcoin a run for its money.
Reason two: The love
In life, how do you choose a new item to buy when you can’t tell which brand or type is the best until you get it? If it’s costly, you might spend some time researching the matter – checking online reviews, asking friends and family who tried the product, and checking the specs. These are good ways to find out more about a product, but the best way is to check what heavy users have. Look at people who use the product daily and intensively for work or constant communication. When choosing new technology products, the heaviest users are often CEOs and managers.
In our ETH case, multiple Fortune 500 companies are making it pretty clear that Ethereum is a wise investment with excellent long-term prospects. These companies started a collaboration back in 2017 designed to further Ethereum technology and subsequently incorporate it into their businesses. The group was called the Enterprise Ethereum Alliance (EEA), and it included companies like Intel, Microsoft, JPMorgan, BP, and Thomson Reuters. In 2018 the EEA reached over 200 companies. Today, the EEA has over 3000 contributing members.
These members benefit not only from the speed and efficient system but also from EVM (Ethereum Virtual Machine). EVM is a unique development giving the network the ability to process smart contracts with any type of trigger (payment, transaction, demand, and more).
NB: smart contracts are pieces of code that process triggers and administer an immediate automatic response accordingly. The smart contract facilitates much faster and more efficient actions. In a world where time is money, this kind of technology can be invaluable.
Ethereum’s creator – formerly a Bitcoin technology developer – felt early on that smart contracts would be a vast improvement on bitcoin technology. So smart contracts were already a part of the plan right at the start of the Ethereum Network.
Reason three: The banks
Blockchain technology is a growing threat to the traditional financial institution: the bank. Banks are not fans of cryptocurrency as it is likely to take over the financial world and eventually may even make banks obsolete.
But of all blockchain-based currency, Ethereum is accepted by banks, as it allows banks to flourish in a technologically advanced society. The first financial institution to join the network is Bank of America, which provided its customers with an Ethereum-based app to increase the privacy of users. The app was developed with the help of Microsoft, which intends to do more than just secure transactions. The larger goal is to gradually increase the use of Ethereum technology until it is firmly incorporated in daily life. Microsoft will then be able to develop more Ethereum-based products, which can enter the market with greater ease thanks to the initial adoption of the app.
The main takeaway is that Ethereum is an improvement on blockchain technology, which speeds up the trading process and enables users to use smart contracts. It is adopted and backed by thousands of users, including large financial institutions and Fortune 500 companies.
The minor takeaway is that it’s quite easy and straightforward to trade ETH. Go forth and get yourselves some ETH!
EverFX is a trade name of ICC Intercertus Capital Ltd., authorised and regulated by Cyprus Securities and Exchange Commission (CySEC) with license number 301/16. ICC Intercertus Capital Ltd. operates in accordance with the Markets in Financial Instruments Directive (MiFID) of the European Union.
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