What Is Ethereum?
Ethereum is a cryptocurrency that is often seen as a competitor to Bitcoin. Investor interest in Ethereum is often spawned initially from Ethereum’s presence in the Coinbase exchange as well as its lower price point when compared to Bitcoin. Before we get started, I want to note that I have a how to buy Bitcoin beginner’s guide, as well as a how to buy Litecoin beginner’s guide you can read as well. Being truthful, this Etherum beginner guide is going to be extremely similar to those two other guides, however, it is worth noting that Ethereum has a lot of unique qualities that new cryptocurrency investors should consider. Coinbase is the most trusted cryptocurrency exchange and it is the easiest one to use.
Due to Bitcoin’s ascent into one of the greatest investments in modern history, Ethereum has largely been overlooked for being another notable profitable investment. And that overshadowing has left a lot of new investors with an opportunity to get in closer to the ground floor with a digital currency which has historically trended upwards. Since 2016, it’s price has increased by over 1000%. And it isn’t showing any signs of declining. Those who have chosen to buy Ethereum have profited, at least up to the publishing of this article. Many investor pundits expect Ethereum to break $500 by year’s end. For someone investing today, that’s a solid upside. Further out, there is no reason to think that Ethereum won’t follow in Bitcoin’s financial footsteps.
While Bitcoin has the reputation of being the cryptocurrency mothership, Ethereum has the reputation of being a more robust and intelligent version of the blockchain. And this matters huge. For a potential investor, this is a key component contributing to digital currency value.
Should I Buy Ethereum or Bitcoin?
I am going to start here because this is one of the web’s most popular questions. Should I buy Ethereum or Bitcoin? I hear it daily, I read it daily, I sometimes even dream of reading and hearing it so darn much. First, allow me to clear the air: You aren’t wrong to do either. As it stands today, both are amazing investment opportunities.
However, I think too many people simply look at the Ethereum and Bitcoin price disparity and make a decision. The price disparity, actually, can serve Ethereum investors well, but potentially not for the reason, many may think.
Bitcoin’s rising price makes some people turn their eyes to Ethereum. The fresh optics tend to suggest that investing in a lower priced cryptocurrency would potentially offer larger returns down the road. And it could, BUT, only if that cryptocurrency rose in a similar scale to the one it is being compared against based on the overall currency value. The concept works like this: Since Ethereum is a lower price, if it doubles, you may end up making more than if Bitcoin simply rises by 10%. Ok, that’s fair. But here’s where the math gets fuzzy. Bitcoin remains the cryptocurrency that trends up by the largest percentage.
Don’t panic, potential Ethereum buyer, at least not yet. You have to do the math based on the value trend and relate that to the currency’s overall value at the time you buy in. Ethereum is currently a great buy.
Here’s the case for buying Ethereum over Bitcoin.
Ethereum is effectively riding the coattails of Bitcoin. Being that Ethereum is one of three options in Coinbase, many people are going to invest into Ethereum without thinking twice. If you can invest in both Bitcoin and Ethereum, that’s your best move. And for many people, they know this. They are investing into Ethereum just to hedge their investing bets. Now, here’s why this matters. If you own stake in Ethereum and people keep investing into Ethereum, even just because they see it as a Coinbase option, you benefit.
Secondly, Ethereum has a wealth of applications that Bitcoin does not. Yes, Etherum is better than Bitcoin in this way. And savvy, well-read cryptocurrency investors are going invest in Ethereum based on this information. Bitcoin was the first blockchain currency, but Etherum’s blockchain is a more complex beast with more robust capabilities. Ethereum uses what is known as Turing-complete coding. I’ll spare you technical details that may serve to confuse us all, however, this means that Ethereum is more capable to accept more applications than Bitcoin. Etherum is more usuable, more applicable, than Bitcoin. Why would this matter? Well, the second level of cryptocurrency success will derive from actual real-life usability. Businesses will adopt cryptocurrency payment options which are easier to install and more secure to process payments. That’s Ethereum.
Third, Ethereum is considered second to come along to Bitcoin, but history has shown that innovations which come first often just pave the way for more evolved versions to take over. AOL and Yahoo! were first, but Google is the beast. Facebook is the monster we know, but Myspace and Friendster paved the path for them. Ethereum, with more advanced blockchain structure, could be in the exact place it needs to be in.
How To Buy Ethereum
Sign up for a Coinbase account here (you will get $10 free Bitcoin if you invest $100 into Ethereum today). When you log in, you will see options for Bitcoin, Ethereum, and Litecoin. Clearly, in this case, you’d click on Ethereum and then BUY. If you choose to use your bank card, you will see the Ethereum you purchased settle into the account immediately. If you choose the bank option, it will take up to a week. Don’t panic, you got the Ethereum for the price you bought in at, it just takes more time for Coinbase to reflect such. This rattles a lot of people initially, but it is no big deal and common. You got the cryptocurrency for exactly what you paid in at.
How To Secure Ethereum
The biggest concern you need to be aware of with cryptocurrency investing is security. Here’s the thing, all cryptocurrency transactions are final. There are no refunds. The aspect of cryptocurrency which makes it more secure for transactions also leaves it exposed to theft. How could you get your Ethereum stolen? Well, if someone hacks your Coinbase account, you are screwed. Due to this, make sure you put on two-step authentication on your account. That’s just common sense.
Second, read my article on transferring Ethereum from Coinbase to Trezor. Even if you are starting with an initial small investment, you should educate yourself on what best cryptocurrency security practices are. It may not be worth owning a Trezor if you only have $100 invested. But what if $100 becomes $1000 like it has for so many others? Then, well, you’d need to begin considering enhanced digital currency security measures.
If you can, invest a little into Bitcoin and Ethereum. That’s probably the best available play. However, if you are on a strict budget and only plan to expose yourself to one cryptocurrency investment, Ethereum is a great choice. In the end, don’t beat yourself up over the matter. Cryptocurrency remains a speculative investment venture, so there is an atmosphere of gambling present in any decision you make. You just have to live with it. However, Ethereum has yet to let any of its investors down. It has always trended up. It’s a great investment and a little now count turn into a whole lot later.
Author: Jim Satney
PrepForThat’s Editor and lead writer for political, survival, and weather categories.
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