In this article we will be exploring how to buy/sell and trade with Ethereum. We will be explaining in detail how to operate with this cryptocurrency, but if you would prefer to take the fast track, click here to buy and sell Ethereum CFDs with the online broker Plus500. On their official website, you will find all of the relevant information concerning investing in Ethereum. In any case, if you would like to learn more about how Ethereum works, we will be explaining everything that you will need to know in this article (80.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money).
Virtual currencies have been one of the most significant developments within the financial world in the last few years. Cryptocurrencies or virtual currencies do not belong to a particular country and have great advantages over conventional currencies. One of these cryptocurrencies, the second most important in the world, is ether. It was created in 2015 as the official currency of a technology called Ethereum. Although the best know cryptocurrency is still Bitcoin, ether has gained strength in recent months and has positioned itself as an excellent alternative since its total value surpasses that of all other cryptocurrencies such as Litecoin, Bitcoin Cash, Nem, Dash, Zcash, Monero and Ripple.
Ethereum is a system based on blockchain technology which is used to create decentralized applications. Not only does ether function as an electronic currency, it is also used for Ethereum trading transactions. At its inception, ether’s value was quoted as being $2.8 and ever since its creation, its value has steadily continued to rise – it is now regarded as the second most relevant cryptocurrency. In May 2017, its value reached over $200 – a truly meteoric rise.
What factors determine Ethereum’s price?
Before explaining how to buy/sell Ethereum, we feel that it is important to first briefly discuss Ethereum’s price. What factors determine whether ether’s value goes up or down? We will explain these factors so that you can make the best possible decision of when to buy or sell Ethereum.
As we mentioned before, ether is not simply a digital currency, but also a form of internal payment for contracts managed in Ethereum. As a result, the main cause of ether’s variation in price is closely linked to the changes that occur internally within this cryptocurrency’s platform.
Ethereum is constantly evolving and periodically reaches milestones called “hard forks”. These hard forks are responsible for changing the platform’s operational parameters, meaning that from the moment that one of these hard forks occurs, previous versions of the platform are no long compatible with the new version.
Each one of the “hard forks” was designed to stabilize and introduce improvements into the Ethereum platform, however, the occurrence of a hard fork will cause ether’s price to rise or fall. Gradually, the value of ether and of the Ethereum platform continues to grow because more and more world-class banks are using it to enhance the performance of their online transactions, including Bank of America and UBS.
Although it may seem ironic, Bitcoin, and its performance on the cryptocurrency market, is the external factor that most influences ether’s price. This is due to the fact that Bitcoin is the main and most popular cryptocurrency, at least for now; and when its value increases significantly, all of the other cryptocurrencies are positively affected. Ether is the second most important cryptocurrency, the one that is most affected by these market changes. Ether’s value varies, but in general, it is among those cryptocurrencies that has most increased in value in 2017.
Ether is subdivided into smaller units, respectively called finney, szabo, shannon, babbage, lovelace and wei. Each of these units is equal to a thousand times the smaller unit following it. For example, this would mean that one thousand finneys is equal to one ether.
Why buy/sell Ethereum?
Obviously this decision is yours to make. Nevertheless, there are many opinions to be found in the marketplace and on forums. For example, there are some people who say that there are many reasons for buying cryptocurrencies at the moment. This opinion mainly stems from the need to perform financial transaction without the limitations imposed by the various conventional currencies and exchange rates that all countries currently use.
While we are entirely convinced of the fact that ether is sure to rise in value in the future, purchasing ether should always be done through a reliable broker. In our opinion, Plus500 fits this bill. Its regulations and conditions facilitate the purchasing and trading of this cryptocurrency – we will speak more about this later on. In any case, you should not forget that there are risks involved and although the value of ether has risen up until now, it is always possible for it to fall in the future.
For now we will briefly analyze the advantages of buying/selling Ethereum at the present time.
- In order to buy cryptocurrencies, it is not necessary to give out any of your personal information, and as such you will not run the risk of falling victim to identity theft or any other type of cyber crime. However, cryptocurrency traders still ask themselves the age old question: is there a danger of being scammed? The short answer is yes, since this type of risk will always be present in all forms of conventional and digital transactions involving money, currency or any other type of asset. But, this should not be a reason for you to dismiss the idea of buying Ethereum out of hand, since the platform is equipped with an encryption system that makes it very difficult for anyone to successfully pull off a scam. Moreover, its creators have put in place teams in charge of supervising the platform’s security.
- Its volatility is another advantage. Without a doubt, the value of cryptocurrencies, and ether in particular, undergoes large ups and downs. For people who like to analyze the market and who are fond of high-risk investments, this can be a major advantage, since these currencies can undergo large fluctuations in their value and can be converted into other attractive assets.
- Trading with Ethereum CFDs is reliable if it is done with a prestigious broker such as Plus500. This broker is regulated by international regulatory bodies and has a powerful trading platform which is easy and enjoyable to use for beginners and experts alike. What’s more this broker accepts deposits by PayPal.
- It is possible to buy ether from anywhere in the world, and as a result to perform transactions in this currency. All you need is a computer or a mobile device such as a smartphone or tablet that will allow you to access a reliable broker – preferably one that accepts PayPal – in order to buy Ethereum.
- These transactions can be performed 24 hours a day, 365 days a year.
- Contrary to Bitcoin, which has a finite offering – with a final creation date of 2140, ether’s offering is infinite. There is not maximum limit to the amount of this cryptocurrency that will be created and its offering depends on its “miners” and on Ethereum’s creators.
- Constantly increasing value. Ether has demonstrated that it will keep increasing in value. From February to March 2017 alone, its value increased by more than 40%. Its current market capitalization has been valued at $2 billion. Expectations that this value will continue to rise are many and very likely to be realized, due in part to the fact that this year Ethereum is expected to enter into contracts with several large corporations such as Microsoft.
- Transaction speed is also something that Ethereum has going for it. Bitcoin transactions are slower and can take up to 10 minutes to confirm, whereas ether transactions only take around 15 seconds to be confirmed.
In addition to the risk of losing money in trades, there is also the chance that Ethereum will lose value. One of the good things about CFDs is that they make it possible to short trade this cryptocurrency.
Where does Ethereum come from and how do you acquire it?
Ethereum was born from a crowdfunding campaign. During the presale of the cryptocurrency, which took place in 2014, the currency’s total volume and rate of emission were defined. At the time, 60 million ethers were created for their pre-sale distribution. Of these, 12 million went towards a development fund, another part was distributed to the currency’s contributors and developers, and the remainder went to the Ethereum Foundation.
As for its emission rate, 5 ethers are created each block, that is to say every 15-17 seconds, the time that it takes to mine a block. The “miner” is the person who creates the currency, and who is responsible for streamlining the transactions and various processes. In exchange, miners receive ethers as payment; the same thing happens with Bitcoin.
At times, 2 or 3 ethers will be sent to another miner who was able to find the solution to the problem, but whose block was not included. This is called an uncle/aunt reward.
Common doubts concerning Ethereum
If you still have doubts concerning the process of purchasing Ethereum, in the following paragraphs we will try to answer the most common questions that people ask themselves before taking the decision to purchase this cryptocurrency.
While some people may have doubts as to the legality of these cryptocurrencies, we will tell you right now that these currencies are totally legal almost everywhere in the world, with the exception of some countries which have specific laws stating that only their national currency can be used to perform financial operations. Other countries have also established regulations concerning cryptocurrencies which should be reviewed before performing transactions with these types of currencies within the borders of these territories.
I want to buy Ethereum, what do I do?
In order to buy Ethereum, all you need to do is to create an account with one of the onlibre brokers that offer the possibility of buying and selling cryptocurrencies. This statement is valid for the UK, but also for other English speaking countries such as Ireland, Australia, etc.
Since the goal of any – online or conventional – company is to make a profit and to avoid scams, you should seriously consider Plus500 to be your broker, since in addition to being trustworthy, it offers the possibility of using PayPal. Plus500 is one of the most reliable online brokers, and it is regulated and supervised by Cyprus’s CySEC as well as being endorsed by the British FCA and the Australian AFSL.
If you would like to trade Ethereum with CFDs via Plus500, you will find instructions on this broker’s website about how to create an account which will then allow you to buy and sell Ethereum CFDs. To facilitate this process, click here to go directly to the section regarding how to buy Ethereum CFDs at Plus500 without paying any commissions (80.6% of retail CFD accounts lose money).