How Does Ethereum Differ From Bitcoin?
What sets Ethereum apart from Bitcoin? Well, for starters, Ethereum was the second digital currency created, after Bitcoin. Released in 2015, Ethereum built upon Bitcoin's original innovation, but with some major differences.
Both cryptocurrencies allow users to make transactions without the need for intermediaries, such as payment providers or banks. However, Ethereum takes it a step further by being programmable. This means that developers can build and deploy decentralized applications (dapps) on its network.
These dapps primarily focus on Decentralized Finance (DeFi) and aim to replace legacy banking services with more efficient and fair financial solutions. Decentralized lending, insurance, and automated trading are all examples of how Ethereum’s blockchain can be put to good use.
Bitcoin is great for establishing value without a central authority, but Ethereum amplifies this by enabling users to write any software program or smart contract. This has opened the doors to a world of possibilities where innovation on the Ethereum network is limitless.
Unlike Bitcoin, which only functions as a payment network, Ethereum operates much like a marketplace for financial services, games, social networks, and other apps that prioritize privacy and cannot be censored.
Ethereum used to rely on the same proof-of-work system as Bitcoin to secure its network, but on September 15, 2022, it underwent a major upgrade known as The Merge. This upgrade shifted Ethereum from proof-of-work to proof-of-stake, resulting in a significant reduction of energy consumption needed to validate transactions. In fact, it decreased by an impressive 99.95%. This change made Ethereum a more environmentally friendly blockchain platform, while increasing the security and scalability of the network.
Who Created Ethereum?
Ethereum was created by a young programmer named Vitalik Buterin. He was born in Russia and raised in Canada, and had a passion for blockchain technology from a young age. At just 19 years old, he proposed the idea for Ethereum in a whitepaper that he wrote in 2013. The concept quickly gained popularity in the blockchain community, and in 2014, Buterin founded the Ethereum Foundation to further develop the project. Today, Ethereum is one of the most widely used blockchain networks in the world, supporting thousands of decentralized applications and powering an entire ecosystem of digital assets and services.
How Is Ethereum 'S Market Price Determined?
The Ethereum price depends on how much people want to buy or sell the token. Just like stocks, there are people who want to buy and people who want to sell crypto. If more people want to buy Ethereum, the price goes up, and if more people want to sell it, the price goes down.
Ethereum is different from Bitcoin because it has more intrinsic utility. You need ETH tokens to access any decentralized app built on Ethereum's blockchain. As more transactions occur on Ethereum, the price of transaction fees grows, as transaction fees are based on supply and demand.
There are several factors that affect the supply and demand, including the new ETH 2.0 staking feature, which allows users to earn interest by staking Ethereum. This has led to over $1 billion of ETH being locked in staking, reducing the supply of the token in both retail and investment accounts.
Media coverage also plays a big role, with Bitcoin being the most covered cryptocurrency and Ethereum often going unnoticed by mainstream media. When Bitcoin is doing well, it’s likely that other tokens like Ethereum will follow.
Transaction volume on Ethereum’s blockchain can also affect the supply and demand of ETH by increasing transaction fees paid to miners who sell their tokens on the market, or by increasing demand for ETH to pay these higher fees.
Additionally, ERC-20 tokens that are hosted on Ethereum’s blockchain promote the token’s utility and demand overall.
Why Buy Ethereum?
Ethereum or other cryptocurrencies are still a gray area and often lack governmental recognition, mainstream adoption, and a positive attitude of users. Although financial decisions regarding investing in crypto should only be based on your own risk tolerance, there are several reasons why many people eagerly include ETH to their investment portfolios.
Ethereum is a crypto asset that has seen a lot of growth and development over the years, making it a strong contender in the market. If you believe in the power of digital currencies, then you should consider investing in Ethereum.
Ethereum is more than just a cryptocurrency – it's a platform that allows for the creation of decentralized applications and smart contracts (computer programs). This means that it has the potential to revolutionize entire industries, such as finance, supply chain management, gaming, and more.
The Ethereum network is incredibly secure and reliable. Transactions on the network are verified by a global chain of nodes, which ensures that they cannot be tampered with or reversed.
Unlike traditional financial systems, Ethereum is not controlled by any central authority, such as a government or bank. Instead, it operates on a decentralized network, which means that it is not subject to the same issues that can arise from centralized systems, such as corruption, censorship, or manipulation.
Ethereum Coin is a great way to diversify your investment portfolio. With its potential for growth and development, it offers a unique opportunity to invest in something that is both innovative and potentially profitable. By adding Ethereum to your investment mix, you can reduce your overall risk and increase your potential rewards.
Investing in crypto can be risky. Investors should approach this venture with a long-term mindset and the expectation of price ups and downs. Prior to making any investment, you should discuss your specific investment needs or seek advice from a qualified professional.
Best Ways to Buy Ethereum Safely
If you are keen on joining the community of Ethereum investors, the best routes to follow are exchanges and wallets.
Centralized Crypto Exchanges
Centralized cryptocurrency exchanges (CEX) are companies that let you buy crypto using traditional currencies, like US dollars, Euro, GBP, etc. They also offer a plenty of convenient payment methods, including debit and credit cards, wire transfers, mobile phone payments, and electronic wallets. Such platforms have custody over any ETH token you buy until you send it to a crypto wallet you control.
Decentralized Crypto Exchanges
Decentralized exchanges, commonly referred to as DEXs, are online marketplaces where people can buy and sell tokens like ETH without a middleman. Instead of relying on a third party to safeguard funds, they use code to execute transactions. This code is called a smart contract and ensures that the seller's tokens are only transferred once payment is guaranteed.
DEXs do not have as many location-based restrictions as centralized exchanges, meaning you can buy what you want from anyone in the world, as long as they accept a payment method that you can provide. With DEXs, you can even buy ETH with other tokens, PayPal, or even arrange in-person cash deliveries! However, you will need a personal wallet to use a DEX.
Crypto Wallets
Some cryptocurrency wallets let you buy crypto with a debit/credit card, bank transfer or even Apple Pay, without leaving the app. Certain solutions may even offer Ethereum staking, an embedded coin swap feature, and other nifty perks. However, geographical restrictions can apply.
How to Buy Ethereum with a Credit and Debit Card
If you want to incorporate traditional money to fund a purchase of Ethereum, you should resort to centralized crypto exchanges that enable fiat-to-crypto payments. For example, on Changelly, you can use a Visa or MasterCard credit or debit card issued in your local currency, such as US dollars.
Find a Great Dealer
As you put your personal finance on the line, you want to be certain in the reliability of the crypto exchange platform you choose. Do your own research and find out about the company’s headquarters, license, security measures, and the managing executives. Make sure, the provider has a convenient transaction fee structure and clarifies how you can make deposits, swaps, and withdrawals.
Create an Account
Once the right trading platform is chosen, the next step is to set up an account. You will need to provide your full name, email, phone number, and a place of residence. Popular companies make the account opening process pretty straightforward.
Verifying your identity is usually the final step in registering with the platform. Most exchanges will require that you verify your account by uploading pictures of your identification documents and proving your living address. Sometimes, you may be asked to prove the source of your funds. Verification can take anywhere from approximately several minutes to potentially a day or two, depending on the exchange.
Fund Your Account
You'll next need to deposit money into your account. With a successfully passed identity check, funding your exchange account is generally a breeze. Simply navigate to the “Deposit” section in your profile menu and choose “Debit/Credit Card.” You will be prompted to add your card’s details and input the amount of fiat to be sent. Cryptocurrency exchanges do not generally have high minimum investments, so you can deposit as little as $10 or so. Depending on your card issuer, you can entail a fee for depositing money on a crypto platform.
Purchase Ethereum
Once you've created an account and loaded it up with funds, you can start buying Ethereum and other cryptocurrencies on the platform. Although each exchange may have its own unique interface, you'll need to confirm your transactions and then allow for processing time, which can vary depending on the number of transactions being requested.
Send ETH to a Wallet
Most exchanges will provide an integrated storage place to keep your ETH tokens after a purchase. Changelly, on the contrary, never stores users’ crypto assets in internal vaults. Instead, the platform requires you to input the address of your own wallet before you can buy Ethereum or other cryptocurrencies.
Even if the company offers custody of your digital assets, you want to consider sending ETH to a wallet that you fully control. Reputable cryptocurrency exchanges generally offer an easy process of sending tokens from their platforms to a third party wallet by copy-pasting a destination wallet address.
How to Buy Ethereum with Bank Transfer
If you want to buy Ethereum with a bank transfer, it's actually pretty similar to using a credit or debit card. First, find a credible cryptocurrency exchange that accepts bank transfers as a payment method. Then, open an account and link your bank account to make the transfer.
Just like with a card purchase, you'll need to provide some personal information to verify your identity. After that, you can easily purchase Ethereum by trading your money for the token via the exchange platform. So don't worry if you prefer using a bank wire over credit/debit cards, the process is just as user-friendly!
How to Buy Ethereum with Apple Pay or Google Pay
Apple Pay and Google Pay are the shortest paths to the crypto market and allow you to buy ETH with a credit or a debit card from your iOS or Android device.
To unlock this perk, you only need two things: an active Apple Pay or Google Pay wallet and a mobile app of your favorite crypto exchange platform, such as Changelly.
You should install the app of a selected crypto exchange on your mobile phone and log in to your account. After that, your Apple Pay or Google Pay wallet will automatically be detected as an available payment method, so you can use it to buy cryptocurrency on the go.
Buying cryptos with Google Pay or Apple Pay is safe as both wallet providers adhere to global security best practices. Also, they do not expose your card or account information to merchants, which significantly reduces the risk of a breach.
How to Buy Ethereum with PayPal
PayPal has recently enabled buying Ethereum, Bitcoin, and a few more coins through its mobile application. It also allows for selling, sending, and storing crypto within the app. However, this investment opportunity is only available to a limited number of investors, namely, those living in the USA and US territories. PayPal is yet to extend this crypto trading service for users from other regions.
If you are not a US resident, yet want to leverage your PayPal balance to buy the Ether token, you can go to peer-to-peer marketplaces like Paxful. Such platforms connect buyers and sellers, so users can trade cryptos on mutually agreed terms.
P2P crypto markets allow users to buy, sell, and swap assets at the desired price, choosing a convenient payment method. Paxful, for example, offers over 450 payment options, including PayPal. It also acts as an escrow service to protect both counterparties until the completion of a transaction.
How to Buy Ethereum from ATM
If your heart is set on more classic methods of buying Ethereum, then you can consider a local crypto ATM machine. There are many Ethereum ATMs all over the world, and sites like CoinATMradar com can help point you to the nearest one. Here's a step-by-step guide to purchasing ETH from an automated teller machine (ATM).
Get an wallet for Ethereum (ETH). This can be any simple crypto wallet like MetaMask, Jaxx, or MyEtherWallet. Or, if you're concerned about security, you can use a hardware wallet like Trezor or Ledger to store Ethereum.
Find the nearest Bitcoin ATM using Coin ATM radar or a similar online crypto ATM discovery tool.
When you get to the ATM, select Ether as the cryptocurrency you want to purchase and specify the amount of Ethereum. Some ATMs may require ID or phone verification for larger transactions.
Once you've made your selection, scan your wallet's public key using the ATM's camera, insert your cash, and follow the instructions to complete the purchase.
Once your transaction is confirmed, your ETH will be deposited to your wallet.
Check the arrival of ETH coins in your wallet and be prepared to experience the thrill of investment success as the value of your digital asset accelerates to new heights!
How to Buy Ethereum with Cash
The easiest method of buying Ether online with digital cash is via any respectable fiat-to-crypto platform that supports crypto purchases with a fiat currency of your choice. After registering your account and linking it to your bank account and crypto wallet, you'll be ready to begin. Keep in mind that exchanges offer their cryptocurrency trading services for a fee, and you may need to undergo a KYC/AML check before being able to make a purchase.
You could also consider using a decentralized exchange. While they may be slower and require a little more effort to navigate compared to centralized services, they typically offer greater levels of privacy and confidentiality that cannot be found on centralized exchanges.
If you insist on using good old-fashioned hard cash to buy Ethereum (ETH), you can try peer-to-peer crypto marketplaces like LocalCoinSwap and Hodl-Hodl. P2P exchanges often have their own messaging systems where buyers can coordinate meetings with sellers. As these transactions often involve cash and unknown individuals, it is recommended to arrange these meetings in public areas.
Bitcoin ATMs, scattered throughout the world and frequently found in high-traffic urban locations, can also help you spend your dollars on buying Ethereum or other crypto assets. Such machines are easy-to-use, yet their trading fees are not that moderate as those of online crypto exchanges and can significantly add to the cost of the transaction.
Several services, such as Bitrefill and eGifter, allow you to purchase gift cards using cash, which can then be used to buy Ethereum on exchanges that accept gift cards as a payment method. Some exchanges that accept gift cards include Paxful and Remitano.
How to Buy Ethereum with a Prepaid Card
Prepaid cards are like regular debit cards. You can top them up with any amount of money you wish and can use them wherever such cards are welcome. Mastercard and Visa are popular providers of these cards, and they are often sold in convenience stores, retail shops, and shopping centers. They also do not allow you to spend more that you actually hold on your balance.
The best aspect of them is that there are many crypto exchanges that permit prepaid cards to purchase Ethereum or other cryptocurrencies. With a little work to establish a trading account and prove your personality, you are ready to involve your prepaid card for Ether investments.
What Can You Buy With Ethereum
Now that you own some ETH, you can leverage your tokens for dapps built on Ethereum to access decentralized finance (DeFi) services like lending, borrowing, earning interest, gaming, and even private payments. For alternative investments, there are Ethereum-based platforms, like SuperRare and Nifty Gateway, which allow users to buy and sell digital artwork using Ether.
In the real world, opportunities to spend your Ether wealth are also plentiful. Online travel agencies like CheapAir and TravelbyBit allow users to book flights, hotels, and rental cars using Ethereum. Companies like Namecheap and Microsoft allow users to pay for their services using Ether.
OpenBazaar and The Cryptocurrency Marketplace allow users to buy and sell goods using Ethereum. Many online stores, such as Overstock and Shopify, accept Ethereum as a payment method for clothing, electronics, furnishings, and other merchandise.
Where to Store Your Ethereum
Ethereum wallets are applications that give you access to your Ethereum account, allowing you to manage your balance, execute transactions, and connect with different applications within the Ethereum ecosystem. An apt analogy would be an internet banking app, minus the bank. By using these wallets, you can exercise greater control over your digital assets and seamlessly interact with various services online.
With a wallet, you'll get a public and private key that you'll use to carry out transfers. The former is similar to a bank account number that you can share with others to receive funds. The latter is like a password and should be kept secret. There are several types of Ethereum wallets:
Physical hardware wallets. These are physical devices that let you keep your private keys offline and out of reach of cyber attackers. They are named “cold wallets” because of this quality. They usually cost between $50 and $200, though some products can be more expensive.
Mobile wallets. Such tools that make your funds accessible from anywhere provided you have a smartphone and an internet connection.
Browser wallets. They are websites that let you interact with your Ethereum account online via the browser and are called “hot wallets” because of their constant exposure to the internet.
Browser extension wallets. They are add-ons to your main browser that you download and activate to access your account and applications every time you open the browser.
Desktop applications. These are downloadable software tools that allow you to manage your crypto funds via macOS, Windows, or Linux.
How to Cash out Ethereum?
If you think it is time to skim a little profit off your crypto holdings, there are several ways to sell Ethereum back to fiat money.
Use a crypto debit card. Crypto debit cards allow for the conversion of Ethereum to fiat currency. This card can be used to withdraw cash or make purchases at any place that accepts debit cards. Popular providers of such a service include Coinbase and BitPay.
Sell ETH for cash on a trusted exchange like Changelly. This involves selling Ethereum on a cryptocurrency exchange and then withdrawing the proceeds in local fiat currency. It is important to use a trusted exchange to avoid the risk of fraud or hacking.
Transact with a P2P exchange. Direct peer-to-peer exchanges let you trade Ethereum directly with other individuals, without the involvement of a centralized exchange.
Make a withdrawal at an Ethereum ATM. Crypto ATMs allow you to withdraw cash in exchange for Ethereum. The process is similar to using a regular ATM, but the machine is specifically designed to handle cryptocurrency transactions.
Get a gift card for ETH. Some providers, including Egifter, Bitrefill, and Giftoff, let you purchase gift cards for popular stores, such as Amazon or Walmart, using Ethereum.
The Best Place to Buy Ethereum
Changelly is the go-to crypto exchange platform for buying Ethereum and other cryptocurrencies at the best rates available. With our best rate guarantee, you can rest assured that you're getting the most bang for your buck. This is achieved through their integration with the world’s leading crypto trading platforms and fiat vendors, which allows for real-time price comparison and selection of the best rate for you.
Not only does Changelly offer unbeatable rates, but it also prioritizes security. The platform is equipped with top-notch security tools, including 2-factor authentication and an HTTPS protocol, to protect your transactions and personal information.
Changelly has earned the trust of more than 2 million customers across 180 countries worldwide, which testifies to the platform’s commitment to delivering a pleasant experience. Whether you're just getting started in the world of cryptocurrency or are a seasoned investor, Changelly has everything you need to buy Ethereum with ease.
