The global crypto market is booming (of course, with some sine wave trend).
Bitcoin(BTC) and Ether(ETH) are the top two performers among all the cryptocurrencies. While Bitcoin is far ahead in market size, Ether is fast gaining ground.
Some crypto analysts even forecast Ether can outperform Bitcoin in the future. It is no wonder that the interested buyer base for Ether is increasing day by day.
The Ethereum blockchain is undoubtedly the most powerful smart contract platform. Of the 100 tokens with the highest market capitalization, 96% are based on Ethereum. Of the 1,000 best tokens, 89% are on Ethereum.
Vitalik Buterin conceived the Ethereum blockchain in 2013. Other founders of Ethereum include Gavin Wood, Charles Hoskinson, Joseph Lubin and Anthony Di Iorio. In 2014, development started with crowdfunding, and the network went live on the 30th of July 2015.
Two major developments could take the process of Ether to new heights. Firstly, the introduction of a new algorithm called Proof of Stake. The second is the development of DeFi.
First, investors are very fond of Ethereum 2.0, which has reached TOP30 in terms of capitalization. On November 4, crypto investors had set aside 1.7 million ETH in deposit contracts opened byVitalik Buterin. By 2022, when Ethereum moves from the current proof-of-work protocol to the Proof-of-Stake protocol, its scalability, security, and sustainability will be greatly improved. According to the Coin Price Forecast, the value of Ethereum will rise in the first half of 2022, and the cost of ETH will almost reach $9,000. The average price of crypto currencies might reach $11,850 by the end of 2023 based on a number of public analyst targets.
Second, the development of DeFi, which stands for decentralized finance. DeFi is a service provider that provides loan services on Ethereum. For example, export only requires smart contracts. People can make high profits from similar services. When DeFi grows into an independent industry, not only the industry itself, but also the companies that hold ETHas collateral will grow. Its value could rise for the foreseeable future.
This article will give you a comprehensive guide to buying and storing Ether.
Guide to buying Ethereum
First thing first, you can’t buy Ethereum. You can buy Ether. Those who don’t quite get it must know that both are different.
While Ethereum is the blockchain network, Ether is its native token. It facilitates all the functioning on the Ethereum blockchain network.
Now coming to the buying part, buying Ethereum or any cryptocurrency can be a potential risk because they are all unregulated digital assets.
If you are ready to take the risk, then let’s straight away dive into the Ethereum buying guide.
- Choose the right crypto exchange
A cryptocurrency exchange or crypto exchange is one of the best places to buy ETH or Ether.
A crypto exchange is just like any trading broker. It provides you with the necessary tools for buying and selling cryptocurrencies. In that sense, the best exchange will be the one that provides all the features to buy and sell cryptos at low service fees and robust security assurance.
Before choosing the best crypto exchange to buy Ether, there is also much more to know.
Here is how you can choose the right crypto exchange for buying Ether.
#1. What are the licensed crypto exchanges in your region?
First, you need to determine which crypto exchanges are permitted to operate in your country or jurisdiction.
After thorough research, make a list of the few popular exchanges that operate in your region. Afterwards, check the validity of each exchange and whether it has the necessary regulatory permits and licenses or not. Also, check whether it supports the local currency you will trade.
#2. How transparent is the platform?
Transparency is essential to choosing the right crypto exchange, and physical address is a big part. The physical address is a way to ensure you can approach the exchange in case something goes wrong. So, if the physical address is not readily available, do not go ahead with that exchange.
#3. What is the registration process?
Registration varies from platform to platform and region to region. But what you have to care about is the sharing of personal data.
While some crypto exchange platforms ask for less personal data during registration, others require much more. You should be careful about sharing personal data to avoid any risk of cybersecurity.
More importantly, keep in mind that some platforms may ask for additional information to access certain premium features like higher withdrawal limits. However, all the information sharing should be according to the KYC(Know Your Customer) and AML(Anti-Money Laundering) region’s policy.
#4. How secure is it?
Security is undoubtedly the most important aspect of any online activity. And trading on crypto exchanges is no exception.
You should be more concerned about security as cryptos are essentially digital assets. That means there will be no physical holdings. If anything goes wrong with the security, your entire investment can be at risk.
So, go for an exchange that needs a daunting process to open an account because a harder process is associated with high security.
You must avoid exchanges that have too easy a process to open a trading account. Such exchanges may not be trustworthy.
While choosing a platform, check if there has been any security breach in the past. If so, how does the exchange respond to such a security breach?
You should dig out the information before making your mind to open your crypto trading account with the platform.
#5. What about the fees?
Once you find the right exchange with a wonderful reputation, matchless history concerning security, and free from any hacks or scams, it’s time to check for platform fees.
Learn everything about the fees charged by the platform. Before deciding, consider how the changes will impact your investment on the platform.
If the charges are within your bearable bracket, you may go ahead with opening an account. Otherwise, look for something else. There is no shortage of crypto exchanges.
- Create a crypto trading account
After finding the right crypto exchange platform, it’s time to open your trading account. The account opening process is not different from opening an account with any online brokerage firm.
As far as the basic details are concerned, you need to fill in your name, address, contact details, email id, and identification numbers. This step will be followed by uploading your documents.
Based on which region you are in, the documents required for the process may vary. The exchanges generally outline all the documents required for the process.
The final step in the account opening process is verifying details and documents.
Most platforms have integrated Artificial Intelligence that can verify documents quickly. So, it should be done within an hour to a few hours.
Once the whole process is complete, you will get the acknowledgement of your account being open and ready to use.
Depending on exchanges, you start trading either instantly or have to wait for some time before your account is active for trading. But in all sense, this entire process does not take more than a day or two.
- Fund your account by depositing money
Now the account is open and active for trading. The next step is to fund it with the currency you wish to buy Ether.
Most crypto exchanges accept fiat currency (local currency of a particular region). Adding money to your account should not be too daunting. You can add money via any accepted method like bank transfers or card payments.
Remember that some crypto exchanges may be C2C type. These exchanges may not accept local fiat currency. Here you can buy Ether by exchanging with other cryptos (mostly registered by the platform).
Generally, the minimum investment in most cryptocurrency exchanges is not very high. You can buy Ether with as little investment as $5. However, they may charge fees per transaction. So minding that, it’s better to trade in large volumes at once.
- Place your order to buy Ether
Cryptocurrencies, including Ether, are decentralized currencies — a part of the Decentralized Finance or DeFi.
That means they are out of the control of any intermediary or centralized regulator. So they don’t have any limited business hours. You can buy them any time of the day.
To buy Ethereum, you have to select the ETH ticket symbol in your crypto exchange’s “BUY” field.
Most exchanges allow fractional buying. That means you can buy a fraction of an ETH by selecting the amount you want to invest.
To put it in a more simple way, let’s say the price of one Ether is $3,000, and you want to invest an amount of $300. You can place a bid for 10% of an Ether coin with $300. It’s like buying a fraction of a share in the stock market.
- Transfer your ETH to a wallet
After purchasing Ethereum, you need to store it. There are two ways to do it.
You can choose to store it with the online storage provided by the exchange. The other option is you store your Ether yourself.
You should know that most established crypto exchanges provide storage at no extra cost.
Additionally, they provide insurance for their clients’ crypto holdings. If anything goes wrong or the exchange is hacked, they reimburse for any loss.
But if you decide to store your Ether holdings by yourself, you have two options to do so. You can choose either a Hot Wallet or a Cold Wallet.
- Hot Wallets
A hot wallet is like cloud storage. It is connected to the internet and convenient to use. Even the storage provided by most crypto exchange platforms is cold storage.
Similarly, you can also choose a third-party storage option after buying Ether. But you have to bear the extra costs of storing your cryptos. Also, you have to check how secure and trustworthy it is.
- Cold Wallets
A cold wallet is an external device like a hard drive. You have to connect it to the internet every time you need to access your Ether. But the best part is it is safer than a hot wallet as no one can hack into it.
Conclusion
Ether is probably one of the best performing cryptocurrencies.
It has immense growth potential. That is why more than 116 billion ETH coins are currently under circulation in the global crypto market.
However, the only point here is it’s still an unregulated digital asset. Just the popularity of Ether may not be the right reason for you to invest in it.
Before investing in Ether, consider the pros and cons of all the related aspects and then make a purchase.
At present, even if there are individual public chains that are more prominent than Ethereum in some aspects. Such as being cheaper and faster than L2, they cannot gain an advantage. Because there are also considerations for security and Ethereum’s ecological convenience and network effects. Currently, Ethereum is in an advantageous position in the competition.
However, this does not mean that Ethereum has the privilege to sit back and relax on the throne of success. Since only when the technology of transaction speed, transaction fee, security, network effect and other aspects achieve a real breakthrough. In addition significant liquidity with a locked asset volume. Lastly, the number of transactions and users, ecological applications and other aspects truly lead the industry continuously. Let’s wait and see.