Pros of Ethereum
- Ethereum blockchain has exceptionally broad acceptance
- Ether fuels DeFi projects and smart contracts
- There is an uncapped supply of Ether
- It offers quick transaction times
Cons of Ethereum
- Ether is a volatile asset
- There are security concerns
History – A brief history of Ethereum trading
Entrepreneur Vitalik Buterin was serving as an assistant cryptographer at the University of Waterloo when he published a white paper outlining the concept of Ethereum. He caught the eye of billionaire Peter Thiel, who awarded him a $100,000 grant to help make his dream a reality.
Buterin began crowdfunding to help develop the Ethereum blockchain throughout 2015, and it finally went live on July 30, 2015. There were 72 million Ether tokens pre-mined at the time. That is a pretty large amount when you consider that the supply of Bitcoin is capped at 21 million.
The goal for Ethereum was to create use cases for blockchain technology that went beyond the pure financial applications of Bitcoin. Buterin worked on it with Gavin Wood, Joseph Lubin and others, but it is a decentralized operating system that allows anybody to run smart contracts and decentralized applications.
The list of use cases for Ethereum has increased steadily over the years, and that has benefited Ether (ETH). It has therefore grown increasingly popular among people that buy crypto online. Ether is technically the coin and Ethereum is the blockchain, but they are now used interchangeably, and many people say that they buy Ethereum or take part in Ethereum trading when they mean Ether.
Ether was worth US$1.25 in August 2015, and it shot up to a high of $1,386.02 by January 2018. A bear market then dragged the Ethereum price down significantly, but it was back to challenging its all-time highs again by January 2021 after a prolonged bull run.
Development – How Ethereum has evolved over time
The initial developers that helped Buterin create the Ethereum blockchain were Anthony Di Iorio, Charles Hoskinson, Mihai Alisie and Amir Chetrit. Lubin, Wood and Jeffrey Wilcke joined the project at the start of 2014. This team released several prototypes in a proof of concept series, and 25,000 ETH was offered as a reward for stress testing the limits of the blockchain during a public beta pre-release.
The Frontier prototype was in place by the time Ethereum went live for the first time in July 2015. The protocol has been upgraded regularly since then. Muir Glacier replaced Istanbul in January 2020, and the next upgrade will be to Berlin.
Open-source development is underway for a major upgrade known as Ethereum 2.0, proposed by Buterik. The main goal is to increase transaction throughput from the current rate of around 15 transactions per second to tens of thousands per second.
Phase 0 of Ethereum 2.0 was unveiled to high praise in December 2020. This created the Beacon Chain, a proof of stake blockchain that will serve as the central coordination and consensus hub. Phase 1 will create shard chains and Phase 2 will implement state execution within these shard chains.
Statistics – Read these quick facts before you buy Ethereum
Ethereum operates on an x86-64, ARM platform, with more than 10,000 active hosts. The Muir Glacier network upgrade was activated at block number 9,200,000. Its block time is 13 seconds, as opposed to 10 minutes for Bitcoin.
Mining of Ether generates new coins at a consistent rate. There were 72 million tokens pre-mined in 2015, and Ethereum trading has soared in popularity since then. It is now a lot more expensive to buy Ethereum, but there are now more than 114 million coins in circulation.
Ether is the second largest cryptocurrency by market cap, behind only Bitcoin. Many people that buy Bitcoin also buy Ethereum and take part in Litecoin trading and XRP trading to have a diverse portfolio. The market cap for Ether went past $115 billion in 2021, meaning it is larger than Tether, Polkadot, XRP, Cardano, Chainlink, Litecoin, Bitcoin Cash, Binance Coin, Stellar and many more cryptocurrencies put together.
Security, Features and Uses – What can Ethereum be used for?
You can buy Ethereum and use it at several online merchants. Ether can be used to purchase anything from a pizza to a private jet, and the list of real world uses grows increasingly long as the number of Ether wallets continues to rise.
Ether is the native cryptocurrency on the Ethereum blockchain, which gives it a privileged position due to Ethereum’s broad adoption. Buterin and his fellow developers created Ethereum to allow anyone to codify, decentralize, secure, and trade pretty much anything imaginable. It is used for voting, domain names, contracts, transactions, crowdfunding, company governance and much more.
However, many see decentralized finance (DeFi) as the best use case to date for Ethereum. This allows users to lend money to anyone with an internet connection, trade with them or borrow from them. The DeFi market surpassed $22 billion in total locked value towards the end of 2020.
DeFi applications generally have their own tokens based on Ether, and Ether is used broadly across the Ethereum blockchain. That has inspired many Australians to buy Ethereum and start Ethereum trading, and its value has soared since 2015. Thousands of tokens run on Ethereum’s blockchain, including Tether, the world’s most popular stablecoin.
There are some significant security concerns regarding the Ethereum network. A hacker seized upon a flaw in a third-party project named The DAO in 2016 and stole US$50 million worth of Ether. That sparked significant fear among the community, which ultimately voted to hard fork the blockchain in order to reverse the theft, with Ether going one way and Ethereum Class (ETC) forked off.
This fiasco dented Ethereum’s reputation, and at one point very few people wanted to buy Ethereum. The following year, in November 2017, a bug in Parity, a popular wallet for the cryptocurrency and decentralized application platform Ethereum, saw more than US$160 million worth of Ethereum put on ice. These issues dented faith in Ethereum’s security, but nothing on that scale has occurred since then.
How to Trade – A short guide to Ethereum trading
Ethereum trading is available at every site that allows you to buy crypto currency online, as Ether is a very popular cryptocurrency. The best sites for Ethereum trading include Binance, Coinbase, CoinMama, Huobi, Kraken and Bitpanda.
Binance is the world’s largest crypto exchange, and it has garnered many positive Ethereum trading reviews from users. It offers attractive trading fees, particularly if you buy Binance Coin and use it to pay the fees, and the analytical tools are impressive, so it is popular among traders.
Australian investors that want to buy Ethereum can visit Binance.com and click “Sign Up Now”. Follow the simple registration steps – enter your name and email address, choose a password, accept the terms and conditions, and move a jigsaw piece across the screen to prove you are not a robot – and you can start to buy Ethereum.
Click “Buy Crypto” and you will find that the trading box is automatically set to Bitcoin. Click the downward facing arrow and change it to the second option, ETH. Ensure that the buy box is set to AUD, and enter the amount in dollars that you wish to spend. Add your card details or an alternative payment method, and then click on the “Buy ETH” button.
You will be informed of the trading fee. Confirm the transaction and the ETH will arrive in your exchange wallet rapidly. Unless you plan on trading it soon, you should move it to an external wallet to protect yourself from hackers and bugs, like those mentioned above.
Many people that buy Ethereum prefer to store it in a hard wallet in the medium-term or long-term. Ledger and Trezor are the leading suppliers. It requires an initial investment, and you have to pay withdrawal fees for moving ETH off your exchange account, but it is much safer and gives you peace of mind.
The Ethereum trading process is pretty similar at all the best Ethereum trading sites. You can switch from “Buy” to “Sell” in the trading box, enter the amount you wish to sell and follow a couple of simple steps to confirm the transaction. You can also exchange Ether for another cryptocurrency, or set up a regular purchase. In each case, you will have to verify the transaction by entering a code sent to your email and/or phone.
Sites like eToro also allow you to buy Ethereum alongside various other instruments, such as funds and commodities. Operators including Plus500 allow Ethereum CFDs, which presents you with the opportunity to speculate on Ether’s price movements.
Future Outlook – The future of Ethereum trading
Ether has a significantly better chance than most other altcoins of thriving long into the future. The Ethereum blockchain is a lot more versatile than the Bitcoin blockchain. Stablecoin transactions take place regularly on the chain, and the DeFi sector has been growing in popularity, which has given the Ethereum network a significant boost.
Many investors liken Bitcoin to gold, and they are starting to see Ethereum as a form of digital oil. It essentially provides the fuel for online transactions, and it has a strong chance of enjoying greater adoption as the global economy becomes increasingly digitized.
Ether’s price was depressed during bearish conditions in 2018 and 2019, but it roared back to life towards the end of 2020 and continued growing in 2021. The Ethereum 2.0 upgrade makes it a lot quicker and more scalable, while using far less computational power, and investors believe it will be the underlying technology for the future of decentralized apps.
The next step would be to establish Ether as a store of value as well as a digital currency. The advent of staking incentivises users to hold ETH in a node, which can then be used by the network to verify transactions, and it has the potential to make Ether a lot more attractive for investors.
There have been numerous so-called Ethereum killers in the past, but they have all underwhelmed, while Ethereum continues to go from strength to strength. A short-term Ethereum price prediction is tricky, as it is a volatile asset, but its long-term chances are strong and millions of Ethereum trading veterans are bullish.
Reputation and Customer Feedback – Ethereum has a strong reputation
Ethereum has a very strong reputation within the crypto community. Investing in Ether is certainly risky, but potentially very lucrative. It has far more of an intrinsic value than the likes of Bitcoin, Litecoin and Bitcoin Cash. Many companies are using Ethereum as a building block, and it also has an industrial value, so Ethereum trading is far more popular than Bitcoin Cash trading and Litecoin trading.
Developers that use the decentralized Ethereum blockchain are extremely positive about it. Developers appreciate the friendly language that can be used to write smart contracts, and in general the Ethereum community is very friendly and welcoming. The DAO hack and Parity bug obviously damaged Ethereum’s reputation, but it overcame those challenges and it continues to flourish.
Conclusion – One of the most popular cryptocurrency choices
Many Australians are understandably very keen to buy Ether. They have read exciting Ethereum prediction articles, and learned of the surging popularity of the Ethereum blockchain. However, this is a new and largely unregulated space, so you should always beware Ethereum trading scams and stick to established, reputable cryptocurrency exchanges like those mentioned on this page.
Each Ethereum trading platform has different strengths and weaknesses. Binance is a very good all-rounder, but some beginners might prefer the sort of user-friendly experience offered at Coinbase. Others prefer to use a decentralized exchange. Just make sure you stick to large, popular sites that have strong trading volume, high liquidity and a long history of facilitating reliable transactions and taking security seriously.