The Ethereum platform is decentralized for developers to build apps on.
You can use Ethereum to codify, decentralize, secure and trade domain names, financial exchanges, crowdfunding, contracts, agreements, and intellectual property. Amongst Crypto-Currencies, Ethereum has the second largest market capitalization after Bitcoin. You cannot buy items with Ether online but you can speculatively trade with it.
Getting Started With Ethereum
There’re two groups of Ether owners – the miners and purchasers. The purchasers could have bought Ether at its launch as part of a crowdfunding campaign or bought it from other owners. Miners use computers to process Ether transactions, and their reward is fragments of the currency.
- Buy Ether with fiat currency: You can use fiat exchanges to buy Ether with local fiat currency such as dollars, euros or yuan
- Buy Ether with Bitcoin: Bitcoin is the best alternative if the right currency is unavailable, bid-ask spread is high or liquidity is low. You can buy it from exchanges such as Coinbase
- Mine Ether: You can either mine Ether or buy a cloud mining contract from Hashflare or Genesis Mining
Differences between Ethereum and Bitcoin
- Not created to replace currencies: While Bitcoin was created as a form of alternative payment, Ether currency was designed to serve users of the platform, as an Ethereum wallet.
- Ether supply is infinite: Bitcoin supply is scheduled to end in 2140, but Ether has no top limit. Its creators and miners influence currency supply.
- Bitcoin is slower: Bitcoin transactions can take 10 minutes to process while Ether’s take less than 30 seconds. This has contributed to Ether’s liquidity and volatility.
- Ownership: Early adopters mined a big chunk of all Bitcoins’ while Ether’s launch was crowdfunded. As a result, buyers own most of the currency.
Trading Ether with CFDs
When trading Ether using CFDs, you enlist in a contract with a platform for example eToro. You will not own the currency but instead, enter an agreement with a broker with whom you will settle the difference. If the price rises between your open and closed position, you gain profits. If it decreases the margin is deducted from your account.
Benefits of Ethereum CFD Trading
- Liquidity: Ether is more difficult to sell since it’s not a commonly traded currency. A CFD allows you to open and close positions promptly since you don’t own the actual currency
- Wide range of trading options: Like most assets, when trading Ethereum you can open a “sell” (short) position which generates a profit if the price of Ether decreases. Setting a Stop Loss and Take Profit orders will close the position if a profit or loss threshold is achieved
- Security: Despite its encryption, the Ethereum platform is vulnerable to hackers. A regulated CFD broker with a regulated platform can keep your money safe.
Avoid unregulated brokers. Choose online brokerages that are licensed and regulated by a popular regulatory authority such as CySEC.
Trading Ether with Binary Options
Binary options are popular with cryptocurrency traders due to its stability and forecasted income. Investing in Ether can generate high-profit margins if traders take advantage of the volatility and fluctuation of the Ether.
Benefits of Binary Options
- Lower risk of loss: Rather than risk large sums of Ether to a high probability of loss, binary options allow the traders to foresee the predicted profit or loss
- Martingale system: In this investment strategy, the initial stake and position are first established. If the binary options trading succeeds, the stake remains unchanged. The next position is doubled if it remains unchanged. Eventually, you will make a successful binary options trade and you can offset past losses with the prospective gain in profit
- D’Alembert system: Similar to the Martingale system, the main difference is it increases the investment after a loss and decreases it after gaining.
Binary Options Brokers
Instead of exchanges, individual brokers with a fixed risk and payout offer binary options. The brokers earn revenue from the percentage difference between the amount they pay out for winning trades and the amount they collect from losing trades. Always research the broker before doing business with them to avoid scams.
Ethereum Forex Trading
Forex is a more stable market to invest in because of the slow pace of currency exchange rates movement. Forex investors make money from market fluctuations. The more volatile the price for an investment, the higher the opportunities to make a profit or loss.
Ethereum Forex trading is gaining popularity as the level of speculation and regulatory concerns have made Ether prices highly volatile. As a result, Ethereum investment is more like stocks and commodities – enabling it to gain larger profits or losses.
Ethereum Forex Brokers
Many forex brokers offer access to Ethereum based pairs such as ETH/USD and ETH/BTC for live and demo accounts clients. Most of these brokers have experience in cryptocurrency trading.
- Fraud: Unlike credit cards, Ethereum is digital and cannot be counterfeited or reversed by the sender.
- Immediate settlement: Ethereum contracts can be customized to eliminate or add third party approvals, reference external entities, and be concluded immediately or at a future date
- Easily accessible: Individuals with access to the internet can access Ethereum with ease
- No identity theft: Cryptocurrency uses a “push” mechanism that allows you to send exactly what you want the recipient to receive without revealing your identity
- Lower transaction fees: The network compensates miners while users engage third party services such as Coinbase.
- Many people are still unaware of digital currency
- You cannot shop online with Ethereum
There is no correct answer whether you should invest in Ethereum or not. The market price of Ether is unpredictable as it changes on short notice giving you huge profits or losses. It’s a highly volatile asset as it changes prices daily. Traders who can accurately predict the direction the price will make a profit.
Minimum Spread, Pips