The second-largest cryptocurrency, Ethereum, can be found across all major Canadian trading sites, and over 400 exchanges worldwide. The platform has been designed to allow developers to build applications on the blockchain, inside the Ethereum hub.
Founded by Vitalik Buterin, co-founder of Bitcoin magazine, Ethereum is a fully decentralised, open-source blockchain system that has its own cryptocurrency, Ether (ETH).
Security – The second most decentralised cryptocurrency in the world, behind Bitcoin.
Immutability – A third-party cannot make any changes to data.
Community – Ethereum boasts the largest developer community in the world.
Availability – You can buy Ethereum from over 400 exchanges
Speed – Ethereum has a speed of 15 TPS (transactions per second) compared to Litecoin’s 56 TPS
Ethereum was first described in a 2013 whitepaper by Vitalik Buterin and development was later crowdfunded in 2014.
Convinced of the integrity and security of their platform Ethereum hosted a “Bounty Program” in 2015. This program offered Bitcoin trading rewards to any users who were able to find weaknesses within the software stack. This idea proved successful and is a factor in the continued reliability, security and confidence of the Ethereum technology.
Ethereum trading went live in mid-2015 and ETH miners, who had already pre-mined 72 million coins, began earning Ether (the currency used on the Ethereum network) from blocks. Developers also began writing smart contracts and creating the first decentralised apps (DApps) to feature on the Ethereum network.
2016 saw Ethereum’s first hack, through a flaw in the third-party project DAO. Over $50 million of Ether was stolen. The blockchain was soon modified via a hard fork to refund those accounts who had money stolen.
Surprisingly, Ethereum were not fully supported in their decision by the Ethereum trading community; half of the community agreed that returning the funds was the right approach, the other half argued that the blockchain is supposed to be unchanging and smart contracts are self-enforced. The disagreement led to the creation of Ethereum Classic (ETC).
The second official update to the Ethereum trading platform was called “Metropolis”. Metropolis began late 2017 after the Ethereum price and trading volumes rose considerably. The update has added increased anonymity and upgraded the smart contract functionality.
2020 was a big year for the Ethereum network, not only was there a substantial price increase, but they also added nearly 15 million Ethereum addresses (that hold an asset total above $0) to their platform. The Ethereum wallet total is now ahead of Bitcoin by over 17 million users.
Development on Ethereum began in January 2014 and had four main developmental phases (Frontier, Homestead, Metropolis and Serenity), which we will cover in more detail below.
Frontier was the first stage of the Ethereum network and provided basic functionality. Traders were now able to buy Ethereum, sell Ethereum, mine, build, test, and upload smart contracts and DApps.
On block 1,150,000, the beta stage of Ethereum was over and the network was declared safe.
The Metropolis update enabled increased anonymity and advanced security in the form of masking (An extra layer of protection from hackers). Users can also take advantage of the improved smart contract functionality, which allows for easier programming, automated and reduced costs.
Serenity is the final stage of the Ethereum trading roadmap leading to greater security, scalability, efficiency and the transition to Ethereum 2.0. One of the key updates will be sharding, a process that divides data processing between several nodes. The upgrade also sees Ethereum move from a Proof of Work system to a Proof of Stake system helping stabilise the block speed.
Unlike Ripple trading and Bitcoin Cash trading, Ethereum does not have a supply limit. The current circulating supply is 114,543,190 ETH. Ethereum uses the algorithm Ethash, which was intended to reduce the effectiveness of ASICs when mining. Similar to Litecoin, Ethereum offers a reward when new blocks are formed. Rewards started at 5 ETH per block in 2015 and have slowly decreased over time to 2 ETH per block. Each block is created in under 15 seconds. If you had purchased ETH back in its frontier development stage, you would have made a staggering return of 61,246.67%. As of February 2021, your ROI looks to be increasing still, as the ETH/CAD pairing breaks past the all-time high and is sitting at a healthy $2222.83.
Ether (Ethereum’s cryptocurrency), can be used as a digital currency on exchanges in the same way as any other currency. Ether can also be used to pay for all computational resources and transaction fees across the Ethereum trading network.
A smart contract is a computer program that allows the exchange of any asset between two parties. Anyone on the Ethereum network can create these contracts and their details will remain secure. Smart contracts remove the need for a third-party, reducing additional costs and any form of possible tampering. We could see this become very useful in the financial world when considering mortgages, rental agreements etc.
Ethereum is also being used as a platform to create decentralised apps (DApps). These apps aim to provide direct interaction between the application providers and its user, meaning any information, action or transaction that occurs on the app will be free from censorship, fraud and interference from a third party.
The increased security that comes with the development of Ethereum 2.0 will cement its potential for real-world use. Ethereum is already adopted by banks worldwide due to its decentralised system, making hacks almost impossible. ETH is also being used where transactional disputes could occur, for example, tenancy agreements. Voting systems have been using the Ethereum network too, eliminating any malpractices.
Ethereum, as a whole, is a very secure network. The incident relating to DAO stems from the infrastructure of smart contracts, not from the Ethereum platform. When purchasing or trading Ethereum for a product or service ensure you do your due diligence and do as much research as possible.
Similarly, for those of you wishing to hold ETH (buy Ethereum in the hope of its price increasing), ensure you are using a reputable Canadian Exchange, an online wallet with a complex password or a hardware wallet.
So, you’re ready to buy crypto currency online? Fortunately, you can buy Ethereum on nearly all major Canadian trading platforms. This means you can really “take your pick” and choose an exchange that suits your knowledge and experience.
Canada’s number one choice for the major cryptocurrencies is BitBuy (a user-friendly, simplistic exchange ideal for first-time traders).
If you have a basic understanding of trading and are looking for a more comprehensive platform, you may wish to sign up to Kraken, Bittrex or Binance. In this Ethereum trading review, we will look at the Binance platform, and take you through the process of setting up your own trading account.
To begin, you will need to open your preferred browser and input “Binance.com”.
In the top-right corner, you will need to click on “Register”. Next, type in your email and create a memorable password. After this, you will be greeted by a screen missing a puzzle piece, move your puzzle piece (on the left-hand side of the screen) into the empty space. This is Binance’s way of confirming you are human.
As with most popular Canadian exchanges, you will be required to enable two-factor authentication before you can buy Ethereum. The two-factor authentication code will need to be retrieved through an app on your smartphone/tablet called “Google Authenticator”. The correct input of these generated codes is essential when looking to sign in to your account, deposit/withdraw funds and buy crypto online.
Once you have created your account you will have a daily withdrawal limit of 2 Bitcoin however you will be unable to deposit money directly into Binance. To increase your limit to 100 Bitcoin, and enable direct deposit of fiat currencies, you will need to verify your credentials.
On the basic info page, you need to click “Verify”. Information needed includes a photo of your identification and a selfie. If you wish to increase your deposit limit, you can also upload a confirmation of your address.
To deposit your fiat currency into your new Binance account, select “Wallet” and click on the “Deposit” button. Depending on your location, a payment method will be conveniently recommended for you (It will also tell you the transaction fees!), enter the amount and corresponding details before confirming your transaction. You are now ready to buy Ethereum or any other cryptocurrencies on the exchange!
Once fees have deposited into your account, you can start trading Ethereum on Binance. You can view all other available cryptocurrencies on the trading page too. Binance has one of the largest quantities of tradeable cryptocurrencies and ICOs, including Binance Coin trading. When using Binance, you have three ways to place an order in the market (limit orders, market orders or a stop-limit order).
When you have acquired your asset, you will have the option to keep this within the Binance exchange, remove to an online wallet, or remove to a hardware wallet.
NB: As previously mentioned, Binance is one of the more advanced exchanges. If any of the terms used in this section seem unfamiliar to you or if you wish to buy Ethereum and hold the asset, we suggest starting your Ethereum trading journey on a more user-friendly platform such as BitBuy, or Coinbase.
As described earlier, Ethereum is a work in progress, currently in its fourth, and final, developmental stage (before moving to Ethereum 2.0). Providing Ethereum can increase its transactions per second, as outlined in its road map, it would be safe to suggest the future of Ethereum looks promising.
The real-world benefits of the Ethereum trading network could revolutionise the financial world, enhancing privacy and security by removing third-parties. It could also change the way we vote, eradicating malpractice and allowing complete public availability.
Ethereum broke through its all-time high earlier this month (February 2021), and we can see momentum continuing to grow with the exciting breakthroughs that Ethereum 2.0 have in store.
When discussing Ethereum, and in particular the transition to Ethereum 2.0, Swyftx co-founder Alex Harper says “The Ethereum network is a force to be reckoned with. If the latest upgrade can deliver on expectations around scaling, it could potentially end the blockchain building race.” He went on to state “There are some worthy competitors but ETH no doubt has the prime position.”
Former Goldman Sachs employee, Raoul Pal, predicts a huge price target for Ethereum. Taking to Twitter and sharing chart analysis, Pal believes that ETHs current trend, “Looks the same as Bitcoin”, he boldly tweets “Yeah, ETH might well go to $20,000 this cycle… (exact same as BTC last cycle, by market cap ETH will be bigger)”.
It could be argued that the sudden market surge directly correlates with the pandemic and, in particular, top investors aiming to diversify their assets. However, it is hard to look past the timing of Ethereum 2.0, the rolling out of their updated road map and the inevitable real-life need of a platform like Ethereum.
Ethereum is already the largest and most well-established decentralised software platform in the market, and it continues to evolve and develop, work on fixes, meet and exceed demand. Privacy and security will always be an essential part of the financial world, and we could see Ethereum having a genuine impact on the real-world in the not-too-distant future.
Already ahead of the pack, Ethereum shows no sign of slowing down. We believe a $20,000 price tag may be a little excessive, but certainly believe anyone who continues to own, or wishes to buy Ethereum will be adding a successful asset to their portfolio. Just remember to keep an eye out for any potential Ethereum trading scams – always trade with a reliable brokerage. On the search for a worthy competitor? Take a look at our latest guide to Litecoin trading.
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