The first application of blockchain technology for online payment was the Bitcoin protocol written by Satoshi Nakamoto 10 years ago. Since that time, the cryptocurrency marketplace has grown exponentially.
Trading cryptocurrency has become an economy in itself. People are increasingly investing their money and locking up their assets in cryptocurrency. Essentially, cryptocurrencies are an online system of value transfer.
Cryptocurrency and Crypto Trading
Cryptocurrencies, like traditional fiat currencies, provide a medium of online payments and asset transfer. However, cryptocurrencies are digital monies based on blockchain technology and offer a decentralised, secure, and efficient way to buy, sell, and send value over the internet. Examples of cryptocurrencies are Bitcoin, Ripple, and Ethereum.
More so, like traditional currencies, you can trade cryptocurrencies for other assets. You can exchange your Bitcoin for Ethereum or the dollar and can use it to hold assets. Cryptocurrency exchange platforms provide coin trading services for all cryptocurrencies.
What is Ethereum?
Ethereum’s website says it is a
“decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, and fraud or third-party interference”.
The founder, Vitalik Buterin conceived Ethereum as an open blockchain-based software programme that allows users to build decentralised applications (DApps) on the platform. Ethereum has its specific token, ether, through which applications on the platform run.
Ethereum has two broad purposes; to be a cryptocurrency used for various online payments and an open-access platform for building decentralised applications. Ethereum is the second most valuable cryptocurrency (behind Bitcoin) with $18 billion in market capitalisation.
How to trade Ethereum and other alternative coins
The share size of Ethereum against other alternative coins (altcoins) makes coin trading with Ethereum an attractive prospect for crypto traders. Below are tips on how to trade Ethereum and other altcoins.
- Create an account on an exchange: the first step to start coin trading is to sign up to one of the many crypto trading platforms over the internet. One of the best exchanges to trade Ethereum is Adara. They have low fees and excellent technology underlying their exchange.
- Load your account using traditional money: before you start trading, you’ll need to buy Ethereum. One way to do it is to fund your account with your credit card. Get the equivalent of the amount of Ethereum you want to buy in your local currency and transfer it to your account.
- Choose a trading strategy: now that you have ether in your account, you need to choose a trading strategy that aligns with your goal: to buy and hold or trade actively. Buying and holding Ethereum means that you’ll store away your ether in cold storage, lying in wait for when you can sell or use it. Active coin trading, on the other hand, entails speculative transaction of your token. It requires that you actively watch price fluctuations. It is a little harder than buying and holding. The general advice is to buy low and sell high when the prices of your coin jump.
In conclusion, coin trading with Ethereum, like all cryptocurrencies, is subject to market conditions. It is highly unpredictable, which means it is a risky investment for you. However, there are benefits. They key is equipping yourself with relevant information and seeking help.