If you’ve thought about investing in cryptocurrency, you’re likely thinking of the other coins apart from Bitcoin.
With so many options available, you’re probably confused about which coins are a wise investment.
One altcoin that’s caught many investor’s eyes is Ethereum. It’s one of the most popular cryptocurrencies available and is one of the preferred choices for investors.
So should you go about investing in Ethereum? What are the advantages of Ethereum?
Here’s our Ethereum 101 guide for potential investors:
What Is Ethereum?
Ethereum is a cryptocurrency that was started for the software industry. It was meant to be a token of exchange within Ethereum’s network. It helps to run applications within the network and lets creators monetize their work.
But it can also get used as a general cryptocurrency for buying and exchanging goods. Within the Ethereum network, the cryptocurrency is referred to as ‘Ether’ or ETH.
In recent years, Ether has been used for buying valuable assets such as NFTs. As of this publication, the most expensive digital artwork got sold for just above 40,000 ETH.
At the time of sale, the amount of ETH was worth $69 Million! Clearly, there’s a lot of value in the ETH token. It’s a formidable opponent to Bitcoin and, so far, it looks like a great option for investors.
Make sure you always keep an eye on the dollar value of ETH. You can read more here on Ethereum price.
Ethereum vs Bitcoin
So why has ETH become a popular alternative to Bitcoin?
Bitcoin was started for the sole purpose of being an alternative form of currency. It’s considered to be a contender to traditional fiat currencies.
What made ETH stand out is that it has a purpose other than working as a digital currency. The Ethereum network has served as a way for software developers to create applications.
This additional feature has given Ethereum a leg up over Bitcoin and other cryptocurrencies. Within the crypto community, there’s even skepticism toward Bitcoin and other popular cryptocurrencies.
As such, investors look at cryptocurrencies such as ETH as a safe alternative in case Bitcoin fails. It isn’t that one cryptocurrency is better than the other; rather, it’s about protecting your wealth by having your eggs in different baskets.
Why Invest in Ethereum?
So now the question is, why invest in Ethereum? The irony is that ETH isn’t made to invest in as Bitcoin or Bitcoin Cash is.
However, that’s one of the reasons why investors find Ethereum to have so much value. Because it helps execute tasks within its own custom network, it opens possibilities for digital creators.
For example, the Ethereum network allows smart contracts to get created between multiple parties. If you wish to hire a software developer, you can use the Ethereum network as your communications protocol. The ETH token in the form of payment to buy their services.
Ethereum is still in its infancy, as are cryptocurrencies as a whole. However, they’ve already helped create an alternative method for exchanging goods and services online.
As one of the earliest cryptocurrencies, one can expect ETH to continue to rise in popularity. When looking at crypto investments, you want to look at the practical use of the currency.
Many altcoins are “joke” tokens that don’t have any practical value. Altcoins such as Dogecoin fit into this category. ETH is arguably the most valuable cryptocurrency because of the usefulness of Ethereum.
Why Ethereum Matters
Many investors might wonder why Ethereum matters for the digital world. It’s clear that Bitcoin has its place as an alternative to traditional currencies.
But Ethereum matters for moving toward a decentralized internet. If you need to send an email, you can use a service such as Gmail. For sending payments, you’ve got PayPal, Stripe, or Venmo to help you out.
But these services are the “middlemen” between you and another user. As such, these middlemen have your data on file. This brings major concerns for privacy and data-sharing.
It also brings major issues concerning internet censorship. This has become one of the biggest hot-button issues during our time.
These issues have built a desire for a decentralized internet. This is an internet where there aren’t middlemen companies that can control your activity on the internet.
This means that you can transact and interact with other internet users without the interference of a third party. It gives more freedom to internet users. Ethereum is part of this transition toward a decentralized network.
If freedom on the internet is a cause you care about, you might want to consider supporting Ethereum.
How to Invest in Ethereum
So what’s the best way to enjoy the value that ETH brings?
The first step is to accumulate as much ETH as possible. You can use a cryptocurrency exchange to buy ETH tokens. You can buy ETH tokens using a fiat currency or another cryptocurrency.
You can also opt to earn ETH tokens for your goods and services. The artist Beeple earned ETH by selling his digital art. A freelancer might choose to get paid in ETH for their services.
You can then choose to hold onto ETH for as long as you want. You can then sell it when the price goes up in fiat value. Or, you can choose to continue accumulating ETH if you want to use it as your preferred currency.
You want to make sure you research the best exchanges to receive ETH from. Make sure you also research the best options for storing ETH on a crypto wallet.
That’s a Wrap on Ethereum 101
Now you’ve read the Ethereum 101 guide, you can decide whether you should accumulate ETH for investing.
Make sure that you always speak to a financial advisor on whether investing in ETH is ideal for your situation.
You can decide to trade ETH, hold it in the long term, or use it to buy valuable assets. Make sure you research where to buy it from and the best ways to keep your cryptocurrency secure.
Please share this guide with anyone else interested in investing in Ethereum. You can find more great articles on cryptocurrency on our website!