Ethereum, as a cryptocurrency, is on the rise. Like most other cryptocurrencies,  this too has its pros and cons that you should know before you invest in it. Wondering where to start? Read this article to know everything about Ethereum. 

What Is Ethereum?

With an 18.30% market dominance, Ethereum is an open-source blockchain platform that allows users to create lots of decentralized applications (dApps) such as voting systems, security programs, and payment methods. It was created by Vitalik Buterin with an aim to operate outside the regulation of central authorities like governments and banks like Bitcoin. The token used for payments on the Ethereum network is known as Ether (ETH).

Why Should I Invest In Ethereum

There are a variety of reasons as to why you should invest in Ethereum. Let us take a quick look at a few of them.

  • Like every other cryptocurrency with a finite stock, the value of Ethereum will keep increasing with time. It is an excellent way of protecting and storing your money. 
  • You can make online payments from anywhere without exposing your identity. You need not let everyone know of your investments and earnings.
  • As a decentralized platform, you are in sole control of your money. There are no organizations in the middle that can get hold of and create a barrier between you and your assets.
  • Although Ether investment is a speculative high volatile investment, it is one of the ways of making lots of money. 

What Are Different Ways Of Investing In Ethereum 

Now that you know why you should invest in Ethereum, your next question should automatically be “How can I invest in Ethereum?”. Here are some of the different ways of investing in Ethereum:

  • Buying Shares: There are public companies that invest heavily in cryptocurrencies, such as Tesla, MicroStrategy, Voyager Digital LTD, Coinbase, Square, etc. You can buy a fraction of their share and hold on to it for the value to increase. 
  • Exchange platforms: This is a popular and one of the most common ways of investing in Ether. You can try creating an account with any Ethereum exchange platform like eToro, Binance, KuCoin, Coinmama, Bittrex, BlockFi, etc., and buy Ether.

Ways Of Making Money With Ethereum

Some of the ways to make money using Ethereum are:

  • Staking:  Staking your cryptocurrency is when you give up a portion of your assets to a blockchain in order to support it. In return, you receive rewards as well as coins. 
  • Trading: This involves speculating the price position (both fall and rise) of Ethereum. Ethereum is generally traded on a cryptocurrency exchange. 
  • Mining: This was one of the earliest ways of making money on Ethereum. It has a lower risk and tends to be safer for users. Money is earned through mining by solving complicated puzzles or math problems. 
  • Buying and HODLing: This is somewhat like investing where you buy coins and hold on to them, waiting for the price to rise later.
  • Investing: Investment is when you buy a specific amount of Ethereum coins leaving the value to rise before selling them to take the profit. 
  • Referral program: This is when you share a link affiliated to your crypto platform with your friends and family and encourage them to invest as well. This way, you can get a bonus prize and even coins if they register with the link you send them.
  • Dividend from crypto stocks: Cryptocurrencies often send rewards to users for owning coins. This reward is called a dividend. 

Can I Lose All My Money In Ethereum

You can lose your money in Ethereum through the following means:

  • Crypto Ponzi schemes: These are scams whereby investors are promised high and consistent returns from a cryptocurrency platform that does not exist at all. They collect money from the investors and never pay the returns back.  
  • Phishing: Phishing is one of the most common forms of financial scam. Scammers have frequently attacked cryptocurrency assets.
  • Cybercrimes: Cybercrime has increased quite a bit over the years and has affected cryptocurrency more often than not. It is important that all cryptocurrency owners and investors keep track of their assets.
  • Loss of password: Almost a nightmare, losing the password of one’s Ethereum account can lead to the loss of assets. Hence, you must be careful while handling search accounts and make sure that you remember all the passwords by heart.

Risks Of Investing  

  • Volatility – Ethereum can rise and fall in a few minutes. You will lose lots of money if you don’t keep a close eye on it. 
  • The threat of online hacking – Lots of cryptocurrencies investors are facing online threats. The crypto exchange you buy, sell and store your Ether can be hacked. 
  • Competition – Many smart contract platforms that offer better scalability than Ethereum, such as Cardona, Polkadot, and Binance Smart Chain, compete with Ethereum. 
  • Not regulated – Ethereum is not regulated, and losing money through online hacking may be challenging to trace. Also, you won’t be able to hold anyone responsible. 

Things To Consider Before Investing

One must always be careful before investing anywhere. Cryptocurrency is similar in nature. Here are a few things you must consider before investing in Ethereum.

  • Study the Risk Factors: Ethereum is a highly volatile cryptocurrency.  Make sure you look it up before investment. Also, you must have enough risk tolerance
  • Gain Knowledge of the Technicalities: Ethereum investment is beyond buying Ether. Carry out an extensive fundamental and technical analysis of cryptocurrency. 
  • Join an online Community: Join different online cryptocurrency communities to broaden your knowledge about Ethereum.

Final Words

Ethereum is not a cryptocurrency but a blockchain platform for creating many dApps such as security programs. The value is not controlled by central intermediaries like banks and various governmental organizations. You can earn money on the Ethereum network by buying and holding Ether coins, investing, and staking. Nevertheless, you should be aware of the risks associated with Ethereum before investing. The best way is to gain more knowledge through extensive research about the cryptocurrency of your choice.

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