Ethereum (ETH) is the second-most-popular cryptocurrency right now. ETH has also come under your radar if you’re into creating NFTs or non-fungible tokens. Ethereum is also good crypto to start with if you’re new to digital currency since it has been around longer than other cryptocurrencies save for bitcoin. If you decide to buy ETH, you still need to be cautious and make informed decisions. Here’s how.
1. Select A Cryptocurrency Exchange
There are options you can choose from when you decide to purchase Ethereum, similar to ones like Netcoins. ETH is also an in-demand digital currency that many cryptocurrency exchanges sell to account holders. When you buy from a specific platform, it will directly impact how you’re going to pay for it and its nature of storage. Before making a purchase, do your diligence and research your options to determine which one is best suited for you.
Here are the following types of exchanges where you can buy ETH:
People who want to invest in cryptocurrency typically look for centralized exchanges to deal with Ethereum. There are various well-known centralized options online, and they act as brokers that buy and sell cryptocurrencies. They also tend to hold a large variety of digital coins compared to the ones where stock options are normally found.
Centralized exchanges are user-friendly and are suited to those still starting with crypto, or if you’re someone who has a bit of knowledge about digital currency. However, some think that it operates against the decentralized nature of cryptocurrency.
Also known as DEX, it uses blockchain technology as its foundation and doesn’t retain brokers that deal with Ethereum to account holders.
With decentralized exchanges, users don’t need to deposit coins or money to start trading, unlike centralized exchanges. Users can fully control the funds and trade directly with sellers or buyers.
The downside with DEX is that you can only exchange one crypto for another instead of buying Ethereum using cash. It’s not suitable for beginners since it can be confusing to use for the first time.
Online Stock Brokers
Using an online stock broker is one of the easiest ways to buy ETH because the cash to crypto exchanges and vice versa and affordable, but also comes with a drawback. Not all online stock brokers allow users to move cryptocurrency in and out of their accounts. You’ll need to check the terms and conditions of the platform to find out.
2. Decide How Much Ethereum You Want
Keep in mind that cryptocurrency prices are volatile. While it can be tempting to invest in ETH when the market price hikes up, nobody knows up until when it’ll stay up. Prices can go down suddenly, and you might find that you’ve lost a ton of money.
Cryptocurrency prices can drastically change, so it’s advisable to invest what you can afford to lose. When investing in ETH or any other digital currency, it’s best to invest for the long-term to get yourself used to highs and lows and ride out significant price drops. You won’t have to keep selling assets when you need cash this way.
Once you’ve decided which crypto exchange you want to buy ETH from, look for special registration offers, zero commissions, excellent customer support, downloadable mobile apps, and other benefits. You might find the proper crypto exchange for your trading needs.
More than anything, acquire more knowledge about the nature of Ethereum by researching to see if it fits your investment goals. The future trends in cryptocurrency show promise that it isn’t likely to go away soon. You can plan and decide how much you’re willing to do for Ethereum. Always keep in mind that crypto should only be a part of your investment portfolio as a way to diversify and leverage safe investments to high-risk ones.
3. Use Exchanges For Storage
Buying and storing Ethereum can go hand in hand. The same cryptocurrency exchange platform where you purchased ETH can hold and store them for you. Some investors and traders would choose to keep the digital currency by using a physical storage device to avoid getting hacked and losing their digital coins.
While users have that choice, it’s also important to note that major exchange platforms have invested in cybersecurity to protect the massive volume of cryptocurrency they’re holding. They also tend to store assets offline to prevent theft. While there’s a history of hacking, platforms are known to reimburse the client’s losses.
You can also choose two types of wallets:
- Cold Wallet – these are external devices that are detachable from Internet access. They cost around USD$50 and USD$200. There are also more high-end devices available. Cold wallets are safe because you can manually connect and disconnect them to the Internet and is suitable for large volumes of cryptocurrency.
- Hot Wallet – they’re accessible through your PC and mobile devices. Your cryptocurrency platforms have storage features that come with no additional cost. Since they’re connected to the Internet, they’re at risk for security breaches.
Ethereum is the second most in-demand cryptocurrency and is safe for beginners to dabble into. Before buying ETH, it’s essential to find out more about it before placing your money into a volatile digital currency. Know what’s the best exchange and storage method for you, read crypto news, and plan your strategy to make informed decisions about ETH and its future as a digital currency.