Do you want to make money investing in Ethereum cryptocurrency without risk? If Yes, here is a complete guide plus strategies and tactics for investing in Ethereum profitably.
Ethereum have come a long way and have surprisingly established a foothold for themselves in the world money market today. Yes, there are not real hard currencies, but these software currencies have started working their way into becoming recognized legal tenders for online transactions; in fact bitcoin has long been used for online financial transactions while other cryptocurrencies are itching to follow suit.
The goal of cryptocurrencies is to make financial transactions more transparent and accessible world over regardless of location and geographical divide. These soft monies are currently achieving this goal as bitcoin is accepted as a form of payment in some online stores.
Just like bitcoin, Ether is equally a cryptocurrency that is organized through a network called Ethereum using a blockchain. The blockchain is basically an online ledger that keeps a secure record of every transaction made in the world under the Ethereum platform.
What is Etereum Cryptocurrency?
Coming after bitcion, Ether is the next most valued form of digital currency. Ethereum is a software platform that uses blockchain technology to enable developers build and easily write decentralized applications (DAPPS).
In the Ethereum blockchain, miners mine out a currency called Ether, just like in the bitcion database where miners are rewarded with bitcoin. This currency is used to pay for transactions, fees and services in the Ethereum network. 5 Ethers are created from every block every 15-17 seconds and given to the miner of the block, and bonus coins can sometimes be shared to third parties who had previously done some work on the block.
Because Ethereum is a decentralized platform that runs on smart contracts, it is a bit different from other blockchain platforms that operate very limited set of operations. It was in a bid to widen the base of the bitcoin currency that 19 year old Vitalik Buterin stumbled on Ethereum.
You have to note that Ether is not really a virtual currency. According to its inventors, Ether is a ‘crypto-fuel’ that is solely used as payment in the Ethereum platform and as such, you may not be able to buy and sell with it. However, you can still trade and invest with it.
This currency which was discovered in 2013, but was released in 2015 after a crowdsale, operates through smart contracts, and this enables people all across the globe to transact business or exchange anything of value in a trusted secured fashion, even if they don’t use the same currency or speak the same language. These records of transactions are created and preserved as a computer code.
The inventors of ethereum intended it for various uses which are not limited to;
- Smart contract developing
- Company governance
- Investing in crowdsales
- Smart voting
- It provides security from hackers
- It provides privacy from third parties
5 Risks You Are Exposed to When You Invest in Ethereum Without Knowledge
In every business, there is a certain amount of risk and drawbacks to be encountered. Investing in cryptocurrency is risky, and as such there is also a level of risk to be encountered while investing in Ether because of the unpredictable nature of cyrptocurrencies. Here are some of the risks you can be exposed to as an investor;
- Theft: the Ethereum network just like any online network is prone to attacks. This has already been encountered in the DOA theft of last June which made the price of ether to crash from $21.50 to $15 within hours.
- It is extremely volatile: though volatility creates great profit making avenues for virtual currency traders, but you can as well lose everything at the drop of a hat. This is one of the most dangerous aspects of investing in cryptocurrency.
- The supply of ether is not fixed and its availability in future is still uncertain.
- Ether is not a currency per say so it cannot be used to buy goods and services just like bitcoin.
- Just like Ethereum emerged and is making a lot of ripples and waves now being the second most popular cryptocurrency, there is a possibility that another superior blockchain technology can emerge and overshadow the Ethereum network thus causing it to be relegated to the background, and causing the value of ether to crash tremendously.
These risks, though there are enough to raise a red flag, but if you are a seasoned investor as well as one who is familiar with the mannerisms of cryptocurrencies, these risks shouldn’t be enough to put you off your goal as there is much dividends to reap if one invests on time and trades wisely; in fact, you can make more than $13,000 in a month depending on your harsh power, scale and equipment.
5 Ways to Acquire Ether for Investment Purposes
These are the various ways you can have access to Ether and they include;
- Mining: Mining Ether is a very complicated process that is also tricky. You can mine Ether on your windows PC or you can buy a mining contract, but this would cost you more. You need to be familiar with complex mathematical computations before you are able to go this route. You equally have to buy some equipment for it which may not come cheap.
- Buy Ether with fiat currency: you can use fiat currencies like dollar, pounds, and euros etc to acquire Ether, but you may have difficulties going this route unless you want to buy from a reseller.
- Use Kraken: this is the first exchange to start trading Ether and till date it has built a solid reputation. You need to open an account and get registered to get started. Krakan offers 6 Ether trading pairs which are; ETH/XBT, ETH/EUR, ETH/CAD, ETH/USD, ETH/JPY and ETH/GBP, and it equally offers a wide range of payment methods. This platform can be used by anyone because it is quite easy to get around.
- Buy with bitcoin: If you find it difficult to buy Ether with normal currency, your best bet would be to buy bitcoin first, and use your bitcoin to then buy Ether coins. There are exchanges that handle these BTC-ETH transactions.
- Contact an online discount broker: You can also contact discount brokers like coinbase, conhouse, etc.
How to Invest in Ethereum Profitably
With its advantage of having both intrinsic and industrial value, Ethreum has amassed great popularity leading the price of Ether to skyrocket in the space of a few months. The total value of all Ether in circulation is now $27.8billion (24.4bn pounds). The price of Ether peaked in March 2017 at $395, but has since gone through random variations.
There are about 5.3 million cryptocurrency accounts or wallets that hold Ether, and the number is still increasing. To join this ever increasing society of Ether miners and users, here is what you have to do.
- Get the knowledge: mining as well as trading on crypotocurrencies especially Ether is quite complex. Mining Ether involves unlocking several mathematical computations after which you are a rewarded with the currency. Without in-depth knowledge on how the platform works and what is involved in it, you would make no head way, so the first step to take in investing in Ethereum is to get the knowledge.
- Build a mining rig: It should be noted that not all computers are built to handle the complex computations that go on in Ethereum mining. You would need a computer that has a Graphics Processing Unit (GPU) which is a specialized hardware that gives better hashing/mining power. There are a lot of them in the market with various capabilities, and you also have to invest in graphic cards and other technicalities. The good thing about this is that once you get a suitable mining rig in place, you can modify it to mine any coins of your choice. But you need to beware of electricity costs.
- Know the dealers: if you can’t mine, then you are left with the option of buying Ether coins. You have to get to know the real dealers of the currency so that you don’t get short-changed or at worst, get defrauded. You need to, as a matter of necessity, carry out an in-depth research on the various sellers, traders, exchange and even hobbyists in case you need their services at some point (well, you would definitely require their services as a newbie).
- Get a wallet: you need to get a digital wallet to store your Ether. In the real world, the first thing to do when you get some cash is to get a means to store it, so you can either open a bank account or you can buy yourself a wallet. It is the same with Ethereum mining; you need a means to store your Ether. There are different types of wallets available. You can get a desktop wallet, web wallet, hardware wallet and paper wallet. Experts recommend using coinbase as a digital wallet because it has features that make it quite user friendly and also because it allows you to keep other different cryptocurrencies in it.
- Start trading: you can choose to buy Ether coins and hold them in your wallet for several months or years before you decide to sell so it can appreciate in value, or you can decide to trade in the coins on a regular basis, the choice is yours. There are several other things you can also do both on the Ethereum database and with the Ether coins apart from trading.
One of the major differences between Ethereum and bitcoin is that while bitcoin is designed to be a digital currency, Ethereum was designed to facilitate software processing while reaping a token called Ether. Currently Ethereum is quite cheaper than bitcoin because it is newer and it is still trying to carve a major niche in the market. Bitcoin currently trades for over $4,100 per unit, while Ether trades between a mere $296 and $310, but developers and speculators are optimistic that the Ether coin is upward bound.
Given the current lower price and the ease of access via coinbase, you can actually risk joining the world of Ether miners and traders who are currently making a fortune through this still viable platform that is fraught with potentials. Who knows, Ether might catch up with and beat bitcoin one day, so this is the right time to dive in if you are thinking of investing in this cryptocurrency.