Should traders include Ethereum to their investment portfolios in 2021?
Recently, Ethereum has firmly settled in the ranks of cryptocurrencies, winning the loyalty of blockchain users and cryptocurrency owners. In 2021, a major update of the platform called Ethereum 2.0 is planned. But will the network be relevant in 2021? Should traders invest their hard-earned money in it? Here’s some info to help.
How is Ethereum different from Bitcoin?
Since Ethereum and Bitcoin are the two most famous cryptocurrencies nowadays, a lot of people don’t understand the difference between them.
Bitcoin was conceived as a cryptocurrency and transaction platform. Basically, users of this platform can exchange transactions with any other users around the world. Today Bitcoin is used mainly for investments. Ethereum, in turn, serves not only as a platform for the transfer of digital money – its capabilities are much greater. One can use their own code and interact with applications created by other users. Due to its flexibility, Ethereum allows users to run many programs of varying complexity.
These two platforms are fundamentally different in a technical way, even though they work on the same principle (distributed ledgers and cryptography.) Also, the differences relate to the blockchains themselves. Block confirmations in Bitcoin take a few minutes, while Ethereum takes a couple of seconds. Blockchain algorithms are also different: Ethereum uses ethash, while Bitcoin uses SHA-256.
More importantly, these two platforms differ in their overall goals. While Bitcoin was created as an alternative to local currencies, Ethereum was conceived as a platform to facilitate immutable software contracts and applications through its own currency.
What about Ether?
Ethereum is a platform, and Ether is a digital currency (cryptocurrency.) Ethereum is an open-source software platform based on blockchain technology. This platform allows developers to create and deploy decentralised applications (dapps) on it, such as Status or Metamask.
Ether (ETH) is just a digital coin. It, like any other cryptocurrency, can be bought, sold and traded.
How to get started with Ethereum
For those who would like to buy and use Ethereum cryptocurrency, the following principles apply:
First, it’s necessary to pick up the Ethereum exchange platform. There are plenty of them on the market, differing by fees, purchase limits and processing time. Users should choose one that will work for their individual needs.
To start purchasing, users need to create an account. They should be prepared to provide personal details, and in some cases for registration they may need to provide photo ID.
Next, the payment method must be chosen. This could be debit or credit card, bank transfer or exchanges.
Now it’s possible to buy Ether. If the price is too high, it’s possible to purchase a small fraction of coins.
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