Ethereum is a cryptocurrency which is used for running so-called "smart contracts" on the Ethereum blockchain network.  

Ethereum functions in a similar way to the Bitcoin network. It makes it possible for users to send and receive money via the blockchain network. However, the main aim of Ethereum is to operate as a network which runs smart contracts.  

A smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in, and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.- Vitalik Buterin

Smart contracts can be deployed for many different applications and sectors, such as voting systems, product supply chains, medical records, and many other areas.

Ethereum is an open system which is not controlled by any government, organization or single person.  Anyone is free to set up a smart contract or "decentralized app" on the Ethereum network.    

The cryptocurrency used to pay for using the network to run these apps and smart contracts is actually called "Ether" or “Gas”, while Ethereum is the name of the network. However, in practice, people tend to refer to both the network and the cryptocurrency as Ethereum.  

If you’re interested in trading cryptocurrency, then Ethereum is an altcoin you should definitely consider as part of your trading portfolio.  

One advantage of trading in Ethereum is that it’s the second biggest cryptocurrency in terms of total market capitalization. This means there is always plenty of market liquidity for Ethereum.  Ethereum is a fast-growing blockchain system with more and more users being attracted to the network to run smart contracts.  

Ethereum also benefits from having a very active technical development team who are continually improving the infrastructure of the network to increase the capacity and processing speed of the system.  

This means Ethereum is an altcoin which has a very strong future as a cryptocurrency and this makes it an ideal currency for traders to deal in.  Ethereum can also be used for online payments. The transaction fee for Ethereum is generally low, and transaction speed is mostly fast, though it can vary according to the volume of transactions being processed through the system.  

In fact, virtually all cryptocurrencies can be used for online payments provided the recipient is willing to accept them.  There are many other cryptocurrencies which have been specifically developed for transaction purposes, such as Litecoin, Dash, Zcash, Monero, and PIVX.  

Online banking is an area which has yet to see a big take-up in cryptocurrencies. This may yet happen in the years to come. Already some altcoins, such as Stellar (XLM) and Ripple (XRP) are being used to facilitate inter-bank transaction processing.    

Trading in altcoins such as Ethereum and other tokens has great potential to generate profits. Since many altcoins are denominated in Bitcoin (BTC), you can benefit from the gearing effect of the price appreciation of Bitcoin together with the increase in the value of your altcoin trading positions.  

However, it’s important to bear in mind that the reverse can also be true if the market turns. Particularly if both your altcoin and Bitcoin enter a bear market phase as has happened in the past. It’s essential therefore to keep a very close eye on your portfolio positions.  

Good luck with your altcoin trading!

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