Ethereum is a decentralized and open-source platform. It is also a distributed computing platform that allows you to create smart contracts as well as decentralized apps, known as “dapps”.
The cryptocurrency app is referred to as the number 2 out of all the most popular cryptocurrencies, after Bitcoin though.
However, unlike Bitcoin and many other recognized currencies.
Ethereum seems to be more than just a medium of exchange or even a store of value. Instead, it says it is a decentralized computing network that is developed on blockchain technology.
How Does Ethereum Works?
Just like every other cryptocurrency, Ethereum operates on the basis of a blockchain network. And a blockchain is a decentralized and shared public ledger. Here every transaction is being verified and taken note of.
It is being shared in a way that all those taking part in the Ethereum network own an identical copy of the ledger. Thereby enabling them to see all their past transactions.
It is decentralized in such a way that the network is not operated or being managed by any centralized body or organization. Instead, it is being managed by all the administered ledger holders.
Blockchain transactions make use of cryptography to keep the network safe and to also verify transactions. People make use of computers to “mine” or to solve complicated mathematical equations.
Which verifies each transaction on the network and includes new blocks to the blockchain that is at the heart of the system.
Participants are then compensated with cryptocurrency tokens. And for the Ethereum system, the tokens are referred to as “Ether” (ETH).
Ether can be used to purchase and sell goods and services just like Bitcoin.
If you are a newbie. In order for you not to get confused, you do not buy Ethereum because that is the network. Rather you buy Ether and then make use of it on the Ethereum network.
You do not need to worry about how you can buy Ethereum as it is very easy because of how popular it is.
Below is how you can buy Ethereum:
How to Buy Ethereum
Read carefully and understand to see how you can buy and store Ethereum for security purposes:
- The very first thing you should do is to select a cryptocurrency exchange. The crypto exchanges and trading platforms are being used to buy and sell all sorts of cryptocurrencies.
- Next, is to deposit fiat money. To do this, you will have to deposit cash, just like dollars on your trading platform. Or you can choose to link your bank account or your debit card to fund the purchases of Ether.
- Once you have done that, you can now buy Ether. As soon as you fund your account, you can now make use of the money to buy Ether at the recent Ethereum price together with the rest assets.
- Once you have the coins in your account, you can choose to just hold them back, sell them out or use them to trade with other cryptocurrencies later.
- With all that being said, have it at the back of your mind that you may draw taxes anytime you sell or you trade cryptocurrencies.
- Make use of the wallet. When you keep the Ether in the default digital wallet of your trading platform, your coins might be at risk. The reason is that if anyone hacks the exchange, they could get away with your coins easily.
- Also, you can easily transfer the coins that you don’t want to sell or trade anytime soon into another digital wallet or even a cold wallet that is not connected to the internet for security.