Guide on Acquiring Ethereum (ETH) and Essential Information
This guide is all about Ethereum, the leading smart-contract platform and the second-largest cryptocurrency by market cap. We'll cover everything you need to understand if dipping your toes into Ethereum investment is right for you.
Key Takeaways
- Ethereum is a versatile blockchain that supports smart contracts, DApps (decentralized applications), and more
- Pick from centralized (CEX) or decentralized exchanges (DEX) such as Kraken, Binance, or Uniswap to buy ETH
- ETH's proof-of-stake mechanism and robust ecosystem keeps it at the top of the game
- Earn passive income with staking, yield farming, and liquidity providing
How to Get Your ETH
To acquire ETH, start by choosing an exchange—for this tutorial, let's use Kraken.
Buying and holding ETH
- Navigate to your device's app store and search for Kraken. Install the app.
- Launch the Kraken app, find ETH, and tap "Buy."
- Choose the amount of ETH you want to buy.
- Confirm your purchase by sliding the button to the right.
Things to know:
- You can buy ETH on CEXs and DEXs like Binance, OKX, and Uniswap
- Funding your exchange wallet is required on CEXs through various payment methods, while P2P trades on these platforms accept USDT or other compatible cryptos
- On DEXs, connect your wallet and move funds to swap for ETH
- Once you have ETH, you can store it in a hardware, software, or mobile wallet
Selling ETH
Although some may wish to HODL their ETH, others may want to sell quickly. Here's how you can offload your ETH.
- Open the Kraken app, head to the portfolio, select Ethereum, and tap "Sell."
- Set the amount of ETH you want to sell.
- Slide the button to the right to confirm the transaction
Top Platforms to Buy Ethereum
- Coinbase: Features a rewards program incorporating educational elements, making it appealing for traders looking to grow their knowledge base
- Binance: Offers competitive fee structures, futures, options trading desks, as well as recently launched NFT marketplace
- OKX: Boasting diverse trading options including peer-to-peer trading and automated trading bots, OKX stands out for its user-friendly interface and efficiency
- Kraken: Offers futures trading with advanced insights, making it perfect for experienced traders
If you prefer to keep your Ethereum purchases anonymous, decentralized exchanges like Uniswap and dYdX are excellent options.
Unpacking the Ethereum Network
What is Ethereum?
Founded in 2014 by Vitalik Buterin, Gavin Wood, and Charles Hoskinson, Ethereum is an open-source network utilizing distributed ledger technology. It serves as a stage for smart contracts and DApps, making it an operating system for the all-encompassing web3 vision.
Smart Contracts
Ethereum's defining feature is support for smart contracts—blocks of code for autonomous deployment. These self-executing agreements form the foundation for DeFi, NFTs, blockchain games, and more.
Revolutionizing the Way You Store ETH
Choosing the right Ethereum wallet plays a critical role in your ETH security. Select from hardware, software, or mobile wallets, not forgetting to prioritize a wallet with strong security features and a solid reputation for asset recovery.
Exploring the Best Ethereum Wallets
- Ledger Nano X or Trezor One: While not as user-friendly as other wallets, these secure hardware solutions earn top marks
- MetaMask, Exodus: These desktop and mobile wallets offer user-friendly interfaces with multi-signature and two-factor authentication options
- MyEtherWallet: A reliable choice for those in search of a web wallet
Is Ethereum a Sound Investment?
With a thorough understanding of the Ethereum ecosystem, it's time to examine whether it's a smart move to invest in ETH. Here's a snapshot of Ethereum's price history and potential future value:
While Ethereum's price chart shows significant fluctuations, the late-2021 peak suggests investors aggressively accumulated ETH, increasing its value. Following a decline in prices, a revival towards 2023 may indicate renewed investor confidence or favorable market conditions, demonstrated by the steep increase observed in that time period.
One of the factors that propels Ethereum's price is the integration of layer-2 solutions, which enhance its efficiency and affordability, contributing to the positive price movement seen in the chart.
Compared to its competitors like Litecoin and Solana, Ethereum retains its dominance, making it a sound investment suited for both short and long-term opportunities.
Earn Money with Ethereum
Investing in ETH doesn't have to stop at simple buying and holding. Explore passive income opportunities through staking, yield farming, and liquidity providing.
Ethereum Staking
Staking ETH is a popular strategy for earning passive income. With staking, you lock up ETH for network security in exchange for rewards.
Top Ethereum Staking Platforms
- Lido
- Rocketpool
- Binance, Stakewise, and more
Ethereum Interest Rates
Besides staking, invest in ETH via platforms like Nexo, BlockFi, Liquid, and more, allowing them to handle the heavy lifting of finding these earning opportunities.
High-Yield Opportunities with Yield Farming
For those new to the Ethereum ecosystem, yield farming is the process of staking ETH in various liquidity pools to earn interest and compound returns. Explore popular Ethereum yield farms like:
- Curve, Aave, Uniswap
- Yearn Finance, SushiSwap
Is Ethereum the Boost Your Crypto Portfolio Needs?
With Ethereum opening arms to smart contracts, DeFi, NFTs, and even institutional adoption, the possibility of a future flippening where Ethereum's market cap surpasses Bitcoin is not out of the question in the years to come.
FAQs
- Can you buy altcoins like Ethereum? Yes, Ethereum is a popular altcoin available on various centralized and decentralized exchanges.
- What factors impact Ethereum's price? Several factors, including supply and demand dynamics, market sentiment, technological advancements, network upgrades, regulatory news, and the overall health of the cryptocurrency market plays a part in influencing Ethereum's price.
- What is the minimum amount required to buy Ethereum on a Centralized Exchange? You can purchase Ethereum on US-compatible centralized exchanges like Binance U.S., Coinbase, and Paxful, with each platform offering varying minimum deposit limits.
- Can I invest $100 in Ethereum? It depends on the minimum deposit limits of the centralized exchange you choose. However, even with a $100 investment, Ethereum's price fluctuations may prove worthwhile, having moved from a price under $1 to almost $4900.
- Where can I buy Bitcoin (BTC) or Ethereum (ETH)? To buy BTC and ETH, look for US-compatible cryptocurrency exchanges such as Binance U.S., Coinbase, and Paxful. Make sure to check the regulations posted by the platform before proceeding.
- Are Bitcoin and Ethereum owners? As Ethereum is a decentralized network, there are no owners. However, the highest individual ETH holder (after Vitalik Buterin) is Ethereum founder, VB 3, ranking 25th and holding 0.20% of the total supply.
- Is Ethereum trading legal in the US? Yes, Ethereum is legal in the US, per the N.Y. Court, classified as a commodity rather than a security. As such, specific regulations that apply to bonds and stocks do not impact trading in Ethereum.
- Ethereum's versatile blockchain supports smart contracts, DApps (decentralized applications), and more, making it an operating system for the all-encompassing web3 vision.
- To acquire ETH, you can choose centralized (CEX) or decentralized exchanges (DEX) like Kraken, Binance, or Uniswap.
- ETH's proof-of-stake mechanism and robust ecosystem keep it at the top of the game in the crypto market.
- Earn passive income with staking, yield farming, and liquidity providing on Ethereum.
- Lido, Rocketpool, Binance, Stakewise, and more are top Ethereum staking platforms.
- Nexo, BlockFi, Liquid, and similar platforms offer investing in ETH for earnings.
- Yield farming in Ethereum involves staking ETH in various liquidity pools to earn interest and compound returns.
- Popular Ethereum yield farms include Curve, Aave, Uniswap, Yearn Finance, and SushiSwap.
- Ethereum's integration of layer-2 solutions can enhance its efficiency and affordability, contributing to positive price movement.
- Compared to its competitors like Litecoin and Solana, Ethereum's dominance makes it a sound investment for both short and long-term opportunities in the cryptocurrency market.
- Coinbase features a rewards program incorporating educational elements, making it appealing for traders looking to grow their knowledge base.
- Binance offers competitive fee structures, futures, options trading desks, and a recently launched NFT marketplace.
- OKX boasts diverse trading options including peer-to-peer trading and automated trading bots, giving it a user-friendly interface and efficiency.
- Kraken offers futures trading with advanced insights, making it perfect for experienced traders.
- If you prefer to keep your Ethereum purchases anonymous, decentralized exchanges like Uniswap and dYdX are excellent options.
- Choosing the right Ethereum wallet plays a critical role in your ETH security. Prioritize wallets with strong security features and a solid reputation for asset recovery.
- The possibility of a future in which Ethereum's market cap surpasses Bitcoin's is not out of the question in the years to come, especially with Ethereum's openness to smart contracts, DeFi, NFTs, and even institutional adoption.
