Guide on Acquiring Ethereum (ETH) and Essential Information
Toxic, Unbiased, Uncensored Guide to Ethereum: A No-Holds-Barred Deep Dive
Read before you invest in Ethereum! This guide covers everything you need to know about the second-largest cryptocurrency by market cap, helping you decide whether buying ETH is right for you. Buckle up as we delve into the murky depths of the Ethereum ecosystem, dissecting its strengths and weaknesses, and exposing the hidden conflicts lurking beneath.
KEY TAKEAWAYS:- Ethereum is a general-purpose blockchain that supports smart contracts, decentralized applications (DApps), and more.- You can buy Ethereum through centralized exchanges (CEX) like Kraken, Binance, or decentralized exchanges (DEX) like Uniswap.- Ethereum's competitors offer varying transaction upgrades, but Ethereum's proof-of-stake (PoS) mechanism and ecosystem make it a dominant force.- Earning with Ethereum is possible through staking, yield farming, and liquidity providing, which offer passive income opportunities.
- How to buy Ethereum
- Where to buy Ethereum: Top platforms
- The Dirty Truth About Ethereum 's Network
- Picking an Ethereum Wallet: Locking Down Your Ether
- Is Ethereum a Sound Investment?
- Ethereum vs. Contenders
- Making Bank with Ethereum
- Ethereum: A Missile for Your Crypto Portfolio?
- Frequently Asked Questions
How to Buy Ethereum—Get Your Hands on Some Ether
If you want to purchase Ethereum, you'll first need to select an exchange. For our demonstration, we'll use the Kraken exchange, but many other platforms offer similar processes.
Laying Your Hands on Ether—Buy and Hold
- Fire up your mobile—head to the app store. Search for Kraken and tap 'install'.
- Open the Kraken app, find Ethereum, and tap "Buy."
- Next, decide on the amount of ETH you want to purchase.
- Lastly, slide the button to the right to confirm the transaction.
You can buy Ethereum (ETH) on a centralized (CEX) or decentralized exchange (DEX). Purchasing ETH on a CEX requires creating an account, verifying your credentials, and funding the exchange wallet. Want to explore other payment methods? Exchanges like Binance, OKX, and more allow buying ETH via P2P trades, provided you hold USDT or another compatible crypto.
For DEX-based purchases, connect your wallet, move funds, and swap to acquire ETH. Once you've bought Ethereum, secure it in the right wallet—hardware, software, or mobile—to store the asset.
Dumping Your Ether—Swiftly Offloading Your Holdings
Maybe you've bought or earned ETH, and now you're itching to sell. While some may choose to HODL long-term, others will be eager to unload.
Just like buying ETH, selling the same can be initiated via CEXs and DEXs. You can even swap your ETH for exchange tokens to quickly unload the currency for fiat. You can also rely on P2P cryptocurrency trading to sell your holdings for BTC, USDT, or other compatible crypto.
- First, open the Kraken app, go to the portfolio, select Ethereum, and tap "Sell."
- Decide on the amount of ETH you want to sell.
- Lastly, slide the button to the right to confirm the sell order.
Where to Buy Ethereum: Top Platforms to Feed Your Ether Addiction
- Coinbase: Pro version provides advanced analytics and tools, and a unique approach to incorporating educational elements into the rewards program.
- Binance: Transparent and competitive fee structure, homegrown NFT marketplace, futures and options trading desks, and diverse trading options.
- OKX: Offers peer-to-peer trading, automated trading bots, and consistent user-friendliness.
- Kraken: Advanced interface for futures trading, supporting a nuanced trading approach.
Other reputable platforms, like decentralized exchanges Uniswap and dYdX, allow you to buy Ethereum anonymously.
The Dirty Truth About Ethereum's Network—Shedding Light on the Dark Underbelly
While Ethereum's ambitious roadmap and technology-focused community have earned it a solid reputation, understanding the ecosystem is crucial before buying ETH.
Ethereum Demystified—More Than a Cryptocurrency
Ethereum was conceived in 2014 by Vitalik Buterin and other influential figures, including Gavin Wood and Charles Hoskinson. It is best viewed as an open-source network leveraging distributed ledger technology.
Ethereum acts as a platform for smart contracts—blocks of code for autonomous deployment—allowing individuals to build apps on top of Ethereum, known as DApps. This makes Ethereum more like an operating system than a basic digital currency.
A deeper dive into the Ethereum network reveals its original vision. The founders aimed for something more than a payment system, eventually raising $1 billion in funds. However, like any successful crypto, despite the underlying innovation, the Ethereum price soon became important to traders and investors.
"Did you know? Ethereum's first public release, Frontier, came into existence in July 2015."
Smart Contracts—The Lifeblood of Ethereum
If you plan to buy Ethereum (ETH), it's essential to be aware of its capabilities. Most of these—like hosting DApps and building new tools and resources for an all-encompassing web3 outlook—hinge on the network's support for smart contracts.
"For the uninitiated, smart contracts are self-executing code blocks that identify as condition-based, trustless agreements. These smart contracts underpin decentralized finance, NFTs, blockchain games, and much more, all hosted on Ethereum."
Picking an Ethereum Wallet—Storing Your Ether Securely
Before you start using an Ethereum wallet, remember that it can be either a hardware or a software wallet to store ETH or even ERC-20 tokens. Wallets are like keys, which you can use directly to interact with DApps, DEXs, and other relevant resources. As for the types of wallet, consider mobile, web, cold, and hot wallets, and choose one that suits your needs best.
Remember that security is paramount when it comes to crypto wallets. Ensure you can secure your seed phrase, and ensure you don't share your private key with anyone.
Wallets Worth Your Attention—Our Top Picks
- Ledger Nano X or Trezor One: Leading hardware wallet options
- MetaMask, Exodus, MyEtherWallet: Decent desktop and mobile solutions
- Consider the security offerings—two-factor authentication, multi-signature capability, and ease of asset recovery.
Is Ethereum a Sound Investment—A Crypto Roller Coaster Ride
Now that we've covered some of the elements associated with the Ethereum ecosystem, it's time to assess whether buying ETH is a good idea based on its investment potential.
The chart above shows the day-to-day price fluctuations of Ethereum (ETH) from July 1, 2021, to September 20, 2024. The data reveals a period of significant fluctuation, marked by a pronounced surge in late 2021, followed by a dip and a steady rise towards the end of 2023.
"Medium-term $8000-$10,000."
Key Observations:
- The surge in late 2021 suggests investors aggressively accumulated ETH, boosting its value.
- The subsequent price drop may have resulted from market sell-offs, evolving investor perspectives, or economic trends impacting the cryptocurrency.
- The steep increase in late 2023 points to a renewed market rally, possibly driven by the adoption of Ethereum and its technical improvements.
- Innovations in layer-2 solutions likely enhance Ethereum's efficiency and affordability, contributing to the positive price movement observed in the chart.
"I am optimistic about the long-term future of Ethereum and @VitalikButerin have played a key role in crypto and the community."
Ethereum vs. Contenders—Which Crypto Rulessupreme?
Before you go out to buy Ethereum, ensure you compare it to its competitors. This gives valuable insights regarding network adoption and how other native tokens are performing.
Litecoin vs. Ethereum: What's the Difference?
The Litecoin vs. Ethereum debate holds little weight today, given Ethereum's PoS transition. However, when Ethereum was PoW, the Litecoin network was one of its closest competitors. As for the differences post-merge, Litecoin still boasts lower transaction fees compared to the Ethereum network.
Solana vs. Ethereum: An Ultimate Battle
The Solana vs. Ethereum matchup makes more sense, as both chains can host applications, NFTs, and smart contracts. While Solana relies on PoH (proof-of-history), Ethereum is purely PoS. Despite the instances of outages plaguing Solana, it still offers lower transaction fees and faster transaction finality than Ethereum.
Solana-Based Meme Coins vs. Ethereum-Based Meme Coins
Solana and Ethereum have emerged as hotbeds for meme coin innovations, each with its unique blend of humor, community engagement, and potential for growth.
On Solana, Dogkwifhat, BOME, and Bonk are leading the charge, capturing user attention with their meme appeal. On the Ethereum network, Shiba Inu and Pepe, buoyed by their viral success, have a dedicated following among investors and meme enthusiasts alike.
Ethereum Classic vs. Ethereum: Where the Chains Differ
Ethereum Classic vs. Ethereum is a comparison that makes the most sense, as both blockchains originate from the same codebase. The former is a fork of Ethereum, following the much-publicized DAO hack in 2016. It's worth noting that while Ethereum has transitioned to PoS, Ethereum Classic still sticks with PoW.
Making Bank with Ethereum—Passive Income Opportunities
Another compelling reason to buy Ethereum (ETH) is to hold and earn passive income. This section will outline various strategies for generating passive earnings with ETH.
Staking Ethereum—A Passive Income Generator
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Exorcising Your Ethereum—Staking Demystified
Staking is a way of locking up ETH—"staking"—primarily to secure the network—while earning passive income on it. While staking Ethereum has many benefits, there are also drawbacks. These include the high staking limit to become a validator and the chances of getting your funds slashed.
If you're unsure where to stake Ethereum (ETH), consider platforms like Lido and Rocketpool. These are liquid staking platforms, allowing you to redeem your staked ETH per your requirements. Other platforms, such as Binance, Stakewise, and more, exist for Ethereum staking.
Ethereum Interest Rates—Exploring lucrative options
While staking is one way to generate passive earnings with ETH, other strategies exist, like lending, liquidity provisioning, and more, with high Ethereum interest rate options to explore. However, if you don't want to manually hunt for passive earning opportunities, platforms like Nexo, BlockFi, Liquid, and more can offer rewarding interest rates on ETH deposits and handle the heavy lifting for you.
High-Yield Options for Earning Interest with Yield Farming
If you're new to the Ethereum ecosystem, yield farming is a process where ETH holders stake their tokens on select liquidity pools. This supports compounding and serves as a lead generation strategy for new token launches.
The top yield farms on Ethereum include Curve, Aave, Uniswap, Yearn Finance, and SushiSwap. To check and verify new options, examine the total value locked, liquidity pools, quality of smart contracts, and other factors before proceeding.
Ethereum: The Fuel for Your Crypto Portfolio—A Long-Term Play?
The Ethereum blockchain is versatile, extending beyond the transaction capabilities of Bitcoin. Some who want to buy Ethereum (ETH) and hold the asset long-term are optimistic about the likelihood of flippening—a possible future event where the Ethereum market cap surpasses that of Bitcoin.
"With the Ethereum network welcoming smart contracts, DeFi, NFTs, and even institutional ethereum adoption, flippening could become a reality in the years to come."
Frequently Asked Questions
Yes, Ethereum is an altcoin. Altcoins are any cryptocurrencies other than Bitcoin, and Ethereum falls into this category. It is one of the most popular and widely used altcoins in the cryptocurrency market.
Various factors, including supply and demand dynamics, market sentiment, technological advancements, network upgrades, regulatory news, and the overall health of the cryptocurrency market, influence Ethereum's price. Major developments within the Ethereum platform and upgrades to improve scalability, security, and functionality can significantly impact its price.
If you're a beginner, buying Ethereum on a centralized exchange (CEX) makes the most sense. To purchase ETH on a CEX, create an account, verify your KYC credentials, and then buy ETH via P2P trading.
Yes, you can invest $100 in Ethereum, provided you onboard a platform that has a minimum buying limit of less than $100. Some exchanges have a fiat deposit and crypto buying limit of $1, making it easy to purchase $100 worth of ETH. Also, if you follow Ethereum's price action, with it moving from under $1 to $4800, even a $100 investment makes sense.
Yes, Ethereum is available on Coinbase. You can buy, sell, and trade Ethereum (ETH) on the platform, which supports various Ethereum-related features and other cryptocurrencies, making it highly accessible to users.
Buying Ethereum (ETH) is relatively safe, as it is one of the less volatile cryptocurrencies. It is the second-largest crypto player by market cap, earning a reputation that lends it credibility. And even though it's trading at a significant discount compared to its all-time high of almost $4900, its price crash to sub-2016 levels is not an immediate threat.
While both Bitcoin and Ethereum are blockchain-based cryptocurrencies, they have distinct purposes and capabilities. Bitcoin was created primarily as a digital currency for peer-to-peer transactions. Ethereum, on the other hand, extends beyond a basic digital currency by providing a platform for building decentralized applications (DApps) and smart contracts, which automatically execute transactions when certain conditions are met. Ethereum's native token, Ether (ETH), is used to power transactions on its network.
If you prefer PoW cryptocurrencies, Bitcoin makes more sense. However, Ethereum's PoS transition reduces its energy consumption by around 99% compared to Bitcoin's original energy consumption. Also, Ethereum is priced lower per unit than Bitcoin.
Ethereum is a decentralized entity and, therefore, has no individual owners. However, it has co-founders, with Vitalik Buterin being the most well-known. Other key figures associated with the founding team are Charles Hoskinson, Anthony Di Lorio, Joseph Lubin, Mihai Alisie, and Gavin Wood.
If you're looking for an ETH holding pattern, Binance 7 and Binance 8—two hot wallets associated with the Binance ecosystem—hold over 2.3% of the total supply.
To buy ETH in the U.S., rely on compatible centralized exchanges like Binance U.S., Coinbase, and others. You can also buy ETH via U.S.-based P2P exchanges like Paxful and LocalBitcoins, but ensure you observe the platform's regulations.
Yes, Ethereum is legal in the U.S. According to a ruling by the N.Y. Court, ETH is classified as a commodity, not a security, as initially argued by the SEC. Therefore, trading in Ethereum isn't subject to the regulations imposed on bonds and stocks.
Sources:[1] Ethereum 2.0 Phase 0 Beacon Chain - Consensus Algorithm Overview [2] Quantstamp (July 11, 2022). "Cosmos Butterfly Effect: How Validator Regions Influence the Security and Decentralization of PoS Networks." Medium [3] Glassnode (August 8, 2022). "How Ethereum's EIP-4488 Is On Course to Significantly Reduce Gas Costs." Medium [4] Ethereum.org (July 28, 2022). "Proof of Stake (PoS)." Ethereum.org [5] Bankless (July 25, 2022). "Can Ethereum Really Flippen Bitcoin?" Medium.
- To buy Ethereum, select an exchange like Kraken, Binance, or Uniswap.
- Buying ETH on a centralized exchange requires account creation, verification, and funding the exchange wallet.
- Purchasing ETH on a decentralized exchange requires connecting your wallet, moving funds, and swapping to acquire ETH.
- Store purchased Ethereum in a secure wallet—hardware, software, or mobile.
- To sell Ethereum, use centralized or decentralized exchanges, or swap ETH for exchange tokens for quick fiat offloading.
- Top platforms to buy Ethereum include Coinbase, Binance, OKX, and Kraken.
- Ethereum network problems and conflicts are crucial to understand before buying ETH.
- Ethereum, conceived in 2014, is an open-source network that supports smart contracts and DApps.
- Smart contracts, the lifeblood of Ethereum, are self-executing code blocks for trustless agreements.
- Pick an Ethereum wallet carefully, considering hardware, software, mobile, security features, and asset recovery capability.
- Ledger Nano X, Trezor One, MetaMask, Exodus, and MyEtherWallet are notable wallet options.
- Ethereum is a sound investment with potential medium-term price increases between $8000 and $10,000.
- Compare Ethereum to its competitors such as Litecoin, Solana, meme coins, and Ethereum Classic.
- Staking ETH offers passive income opportunities, while liquid staking platforms like Lido and Rocketpool enable redeemable staked ETH.
- Other passive income strategies include lending, liquidity provisioning, and high-yield yield farming.
- Ethereum's versatility and expansion beyond transaction capabilities make it valuable for long-term holding.
- Ethereum's price is influenced by various factors, such as market sentiment, technological advancements, upgrades, and regulation.
- If you're a beginner, buying Ethereum on a centralized exchange is recommended, with platforms like Coinbase offering accessibility.
- A $100 Ethereum investment is reasonable, as Ethereum is one of the less volatile cryptocurrencies.
- Bitcoin and Ethereum serve different purposes, with Ethereum providing a platform for building DApps and smart contracts.
- Investing in Ethereum is relatively safe, as it is credible and less volatile compared to Bitcoin.
- Ethereum-related features and other cryptocurrencies are supported on popular platforms like Coinbase.
- Ethereum is classified as a commodity in the U.S., making it legal to trade.
- Binance 7 and Binance 8 hold 2.3% of the total Ethereum supply in two hot wallets associated with the Binance ecosystem.
- In the U.S., buy Ethereum through compatible centralized exchanges like Binance U.S., Coinbase, and P2P exchanges like Paxful andLocalBitcoins.
