Let’s start at the beginning. Ethereum is the name of a digital platform that adopts blockchain technology and expands its use to a wide variety of applications. The name of the native cryptocurrency of this ecosystem is Ether, which, as we already mentioned, is the second largest in the market.
Ethereum was made in 2015 by the software engineer Vitalik Buterin, with the viewpoint of making an instrument for decentralize and cooperative applications. Ether is a token that can be use in transactions using this software. Like bitcoin and other cryptos, ether exists as part of an autonomous peer-to-peer financial system, free from government intervention. Like bitcoin, its value has proven to be highly volatile, with large fluctuations even in intraday values.
In January 2016, ether was trading around $1, and in January 2018, the cryptocurrency hit its highest level ever, $1,391. However, in October 2020 ether was trading well below that picopar, falling below $390. From that moment on, a bullish rally began that led it to be currently in the historical peak area, fluctuating between 4,000 and 4,300 dollars.
How to invest in Ether?
There are different ways, but the three main ones are the following:
- Via Exchange
- through mining
- and through brokers
Currently, investing in Ether or any other crypto asset is very easy. There are innumerable exchanges dedicated to the purchase and sale of cryptocurrencies, in many cases even being able to invest anonymously, without the need to fill out the intermediary’s KYC. Using these exchange platforms is the fastest and most used way to invest in Ether. In Spain there are many, and just to give examples, we find Binance, CoinBase, eToro, Kraken and more.
But that is not the only way to invest in Ether. As with other cryptocurrencies, ethers can be obtained through mining them. This process is not usually within everyone’s reach. Since not everyone knows how or has the necessary means to invest in the equipment to do it. The procedure of obtaining ether by mining does not differ from other mining. Those who carry out the process are nodes (users), which through the Proof of Work (PoW) consensus, will verify and validate the transactions, thus releasing new crypto units. By performing this task, they will receive in compensation, certain amounts of ETH as a means of payment.
Like other financial assets, it is possible to buy or sell Ether with trading platforms, through specialized brokers, proposing financial derivatives exchange agreements. Within this group, CFDs, futures contracts, options stand out, among many others of greater or lesser complexity. Commissions of buying ethereum on Coinbase Most of the investors are undoubtedly interest in the commission rates for investing in cryptocurrencies. This is also determine by the payment method chose. So let’s see what fees Coinbase charges to invest in the second largest coin in the market: 1.49% for normal purchase or sale 3.99% for purchase with card.
Pros and cons of investing in ETH
Advantages of investing in Ether
There are several advantages to investing in Ether, and they are as follows:
- Ether has an electronic wallet system that allows the security of the tokens due to its operation through an account number and a personal access code.
- When moving the ethers from one wallet to another wallet. The transaction is carry out using a share key between the two participants.
- The blockchain system allows the realization of smart contracts. Which are drawn up between the participating parties within the system that. Once programmed, are executed automatically for mandatory compliance.
- Like other cryptocurrencies, Ether is not controlled by any government. So it is understood to be a decentralized currency. So its value is determined only by aspects such as market supply and demand.
- Your -20 token is the most important and solid.
Disadvantages of investing in Ether
Nothing is 100% bad or 100% good, so investing in Ether also has its downsides:
- The operations carried out within the system or the blockchain are not reversible, that is, they are definitive. In the event that the transfer of Ethereum is make to the wrong person or the security of the currency is violate. It is impossible to recover it since it is not back by any entity.
- Like any electronic system, it can be prone to scams. The unnameability of the accounts means that it can favor the money laundering of crimes around the world.
- The volatility when investing in Ethereum has been very evident, having a highly variable behavior, even in intraday values, so its use as a conventional payment method can be question. This volatility is favor by the existence of “waves”, which are nothing more than large investors with a high percentage of the market and who can modify the price to their liking and pleasure if they so wish.
- Although it is estimate that a maximum of 18 million coins are create annually, one aspect to consider regarding Ether is that there is no limit of coins to circulate in the market, unlike Bitcoin. However, recently a periodic token burning system began that makes the supply control.