There is an influx of new cryptocurrencies today as more and more are brought into existence almost every day. However, most of these cryptocurrencies will not stand the test of time and do not have any current real use cases. Ethereum on the other hand is one cryptocurrency that has proven itself as a viable cryptocurrency that is changing the cryptocurrency/blockchain development space. So, what is Ethereum anyway?
In the simplest terms, Ethereum is an open sourced blockchain technology that gives developers the tools and technology to develop and deploy decentralized blockchain applications (new “cryptocurrencies”). One important thing to note, is that Ethereum is not intended to be a currency like Bitcoin, but rather a development platform for blockchain technologies. However, the Ethereum network does contain its own cryptocurrency known as Ether. Ether is a cryptocurrency token that is used to fuel the Ethereum network and is also used by developers to pay for transaction fees and other services. Now that we know what Ethereum is, how does it work?
Ethereum utilizes a set of software code known as “smart contracts” that allows new developments on the Ethereum blockchain to be self operating without the possibility for any censorship, centralization or fraud. The smart contracts facilitate the exchange of new blockchain developments, (cryptocurrencies). Through Ethereum, there have been thousands of smart contracts developed, and they are known as ERC20 tokens. All of these tokens/cryptocurrencies can be bought and sold on various cryptocurrency exchanges with Ether. For this reason, Ether/Ethereum has gained tremendous value in price and is traded by many in the cryptocurrency space.
The current live price of ETH/USD:
How to Trade Ethereum
Trading cryptocurrencies is gaining a lot of popularity these days, and it’s only going to become more popular as it generates mainstream attention from people all around the world. As cryptocurrency trading becomes more popular, the trading of Ethereum grows immensely because the Ethereum cryptocurrency is used to purchase a very large variety of other cryptocurrencies. While Bitcoin holds the number one spot for being used to buy cryptocurrencies, Ethereum is gaining ground as being the number one cryptocurrency used to trade for others. This is largely due to Ethereum’s much faster and cheaper transactions.
Ethereum is a very popular and widely used cryptocurrency, therefore it can be bought and sold / traded by most if not all cryptocurrency exchanges. There are two ways of purchasing Ethereum from an online exchange, the first being with fiat currency and the second being with Bitcoin. If you wish to purchase Ethereum with fiat currency, you must first ensure that the exchange you will be using, accepts your type of fiat currency, let alone fiat currency at all. Some cryptocurrency exchanges will not accept any deposits or withdrawals of fiat currencies, only cryptocurrencies. Once you have obtained some Ethereum, you can trade it in various ways. Ethereum can be transferred to many different cryptocurrency exchanges where it can be exchanged for other cryptocurrencies. Or, you can trade it back for fiat currency when the price goes up, on the exchange you bought it form.
CFD Trading with Ethereum
Another method of trading which some people prefer is to trade Ethereum through CFDs (Contact for Difference). This method is only available on certain cryptocurrency exchanges/brokerages and allows investors to trade Ethereum without actually purchasing any. The way it works is, a trader puts down a certain amount and uses leverage to speculate on which direction and by how much the price of Ethereum will move. CFD trading of Ethereum and other cryptocurrencies is relatively new and becoming increasingly popular.