Ethereum is the second largest cryptocurrency by market capitalization, and it goes without saying that it is very popular in the world of cryptocurrencies. If you are interested in owning some Ethereum, we will walk you through the process.
What is Ethereum?
Ethereal is a blockchain platform designed to host decentralized applications (known as DApps) and cryptocurrencies. It is generally considered to have some of the best blockchain technology in terms of innovation, security, and openness for developers to develop, which is part of the reason it has become so popular.
What can you do with Ethereum?
Its native cryptocurrency is called Ether (ETH), which can be used as a payment method for various goods and services where cryptocurrencies are accepted, and can also be exchanged for another cryptocurrency or fiat currency. Furthermore, the Ethereum network can also host other cryptocurrencies using its ERC-20 token compatibility standard and to date this has been the most popular use case for Ethereum.
How do you buy Ethereum?
You can buy Ethereum in four easy steps:
1. Compare and choose a cryptocurrency trading or exchange platform
In order to buy and sell cryptocurrencies, you will need to register with a cryptocurrency trading platform. When deciding which platform to use, there are a few things to consider including: the fees, how easy it is to use, whether you are in Australia or abroad, and the currencies you can trade on the platform. You will also need a wallet to store your cryptocurrency. A growing number of platforms now allow you to create a wallet, as well as buy and sell on the exchange. For more information on wallets, see below.
2. Sign up and verify your identity and email address
This step tends to be fairly straightforward, though depending on the platform you’re using, the process may differ slightly. You’ll likely need some identification documents before you can set up your account, so it’s a good idea to have your driver’s license, passport, or proof of residence handy.
When setting up your account, you’ll choose your username, password, fill in any personal information, and set up 2-factor authentication (which provides an extra layer of security) and verify your email address.
3. Link your bank account, select a payment method and make a deposit
Once you’ve added your bank account and selected your preferred payment method (Poli and PayID/Osko are two common methods), you can make an AUD deposit to your account, which is usually free. However, some platforms charge additional fees for currency conversions, for example between fiat and cryptocurrency.
4. Go to the buy section and select Ethereum
Now that you have some funds, you can buy some Ethereum. Go to the buy/exchange section and select Ethereum, enter the amount of AU$ you want to invest or the amount of the currency you want to buy, double check that everything is correct and confirm your purchase.
What wallet can you use to store Ethereum?
When you buy cryptocurrency, you will also need a place to store it. There are usually two storage options: a cold wallet or a hot wallet. A cold wallet stores your crypto on an offline hardware device where you will need a private key, similar to a password, to access it. The benefit of storing your crypto offline is the added security.
Hot wallets refer to cryptocurrencies that are stored online and connected to the Internet. Although this option is more convenient, it does not protect your crypto from data breaches and hackers.
There are some wallets that you can use to store Ethereum in Australia. For cold wallets you might consider:
- Ledger Nano X
- Ledger Nano S
- Trezor Model T
And, for hot wallets, there are:
What can be bought with Ethereum?
Although the use of Ether as a currency is not widespread, there are some places that will accept it as a form of payment. These places include: Overstock, Gipsybee, and Shopify, which are popular online stores. In the US, other major retailers including Whole Food, Bed Bath & Beyond, and Home Depot will accept Ether through the Flexa app. However, retailers in Australia have yet to embrace cryptocurrency.
Ethereum is also the most common form of payment in the NFT market. So if you are considering buying or even selling an NFT, you will generally need Ethereum.
Should you buy Ethereum?
Whether cryptocurrency, including Ethereum, is the right investment for you depends on your personal circumstances. Before you invest in anything, you should consider your goals, your current situation, and your tolerance for risk. Cryptocurrencies are notoriously volatile and while there is the potential for huge gains, there is also the potential for huge losses. It’s also best to fully understand what you’re investing in, how it works, and if it has any real functionality.
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