The digital currency Ethereum has been making a lot of buzz lately as its value has skyrocketed. It’s now the second-biggest digital currency, with a market cap of over $35 billion. You can invest in it using your regular brokerage account.
But what exactly is Ethereum? Is it just another digital currency that you can use to buy things online, or are there other ways to invest in it besides directly buying the coins on an exchange? Let’s begin with how Ethereum came into being so you can start Ethereum investing as soon as possible.
Ethereum was developed by Vitalik Buterin – a programmer who had previously worked on Bitcoin – and his team. The idea was to create a protocol that would allow developers to build decentralised applications (apps) on top of it. People could then use these Dapps for various purposes, such as creating markets, storing registries of debts or relationships, tracking promises, and so on.
Why Invest in Ethereum?
Ethereum is a decentralised software platform that enables smart contracts and Distributed Applications (ĐApps) to be built and run without downtime, fraud, control or interference from a third party. The platform is also the basis for its own virtual currency, Ether. Currently, it has a market cap of over $34 billion, second after bitcoin.
What makes Ethereum investing even more attractive is the technology developers can use to build their own cryptocurrencies. These alternative coins, sometimes called “altcoins”, are what investors are flocking to these days in droves.
How to Invest in Ethereum?
Investing in Ethereum isn’t as easy as going to your online discount broker and plunking down a few hundred dollars for some shares of stock. However, there are other ways to get in.
If you’re interested in investing in Ethereum or other digital currencies, here’s how to get started.
Step 1: Sign Up for an Exchange Platform
The first step is to sign up for an exchange platform to buy and store your digital currency. There are multiple exchanges out there. Choose one that offers the currencies you want to buy and has low fees.
You’ll need to verify your identity before you can make any transactions on an exchange platform. It is done by uploading your passport or driver’s license; the verification process usually only takes a few hours.
Step 2: Transfer Money into Your Exchange Platform Account
Once you’ve set up an exchange account, it’s time to deposit money onto the platform so you can buy your digital currency! Use an international bank transfer or pay with your debit/credit card if the platform accepts either of these options.
Step 3: Find an Ethereum Wallet
You can’t have a digital currency exchange platform without also storing your digital currencies somewhere, so you’ll need to find a wallet. The types of wallets are listed on the exchange platform you choose, so be sure to select one that will securely store your Ethereum.
Step 4: Buy Your Ethereum
Now for the fun part. It’s time to purchase some Ethereum and other digital currencies. Assuming this is your first time purchasing digital currency, there might be a little bit of a learning curve as you figure out how to purchase your Ethereum. Don’t worry; just follow the prompts on the platform and deposit some money!
On most platforms, this is done by choosing either a market order or limit order. A market order will execute your transaction at the best price available, while a limit order allows you to set the price of your transaction.
Step 5: Transfer Your Ethereum to the Wallet
Don’t store your digital currency on an exchange platform for too long, or else you might be at risk of losing it to hackers! Storing them on an exchange is not recommended as exchanges are more susceptible to being hacked. Instead, transfer your Ethereum to your digital currency wallet, which you purchased on the exchange platform.
You now own some Ethereum. From here, you can choose to either withdraw it or deposit more digital currency onto the exchange platform for investment purposes. Start your Ethereum investing as soon as possible with this information. The sky’s the limit with digital currencies; enjoy your newfound wealth.