ETH and How it Works
As more and more cryptocurrencies are being floated on the internet, it seems that these are fast gaining momentum and wider recognition as a viable financial system. Cryptocurrency is not that different from ‘fiat’ (hard currencies) in that they are (digital) tokens of value as much as a $100 bill merely represents a given value – the printed piece of paper has little or no value in and of itself. So how are cryptocurrencies different to having money in the bank or banknotes in your wallet? We’ll take ETH (also known as ‘ether’) as an example.
What is ETH?
ETH is the primary cryptocurrency supported by the blockchain-based software platform known as Ethereum, and is second-largest to Bitcoin in market capitalization. The Ethereum platform is however much more diverse in that it supports a wide range of uses, including storage and sale of digital art, for example. The big difference between cryptocurrency such as ETH and fiat is that transactions are not managed by a centralized control system such as a bank and are therefore totally private. As there are no third parties involved, how you spend your money is solely your business.
How do you buy ETH?
ETH can bought from a cryptocurrency exchange, from which there are many to choose, depending on where you live. Obviously you will use fiat to make the purchase. At the time of writing this article, ETH is valued at $2,417.00 per token, although its value fluctuates fairly quickly. However, you can buy a much smaller percentage of a token, as little as $2. Similarly, you can sell your ETH and convert it back to fiat.
Where do you store ETH?
Like other cryptos, you need a digital wallet to manage and store your ETH tokens. Most wallets are digital apps that you access from a smartphone or laptop. Ethereum wallets also store a user’s private keys, which consist of a unique long string of letters and numbers. It is vital never to lose these keys, as they are the sole way of accessing your funds.
What can you buy using ETH?
ETH and other cryptos are still rather limited in what you can pay for and who you can transact with, although this is changing quite fast. Obviously, ETH lends itself to payments for items or services that are purely digital in nature, such as depositing in online casinos. (DuckyLuck currently supports Bitcoin, and may add ETH at some stage.) For users in the US, PayPal also now accepts ETH payments and conversions to fiat, which means that you can pay for any goods or services through PayPal, who will convert it to whichever currency is desired by the payee. That’s a sure sign of how cryptocurrencies are becoming an integral part of financial transactions worldwide.
Should you invest in ETH?
Many people consider cryptocurrencies a form of investment – for example, a single Bitcoin started at $1 in value – and is now worth over $61,000! One ETH was valued at $1.25 in 2015 and now is worth $2,412. While the value may fluctuate on a day-to-day basis, it appears that the trajectory is definitely upward.