HOW TO USE ETHEREUM [BEGINNERS GUIDE]
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Ethereum is the most widely used cryptocurrency in the world today after Bitcoin. For most people that want to get into crypto trading, these two blockchains are usually their first choices. Ethereum, however, functions as a cryptocurrency and powers a platform for smart contracts. This guide is easy and beginner-friendly, prepared by the team of bitcoin-profit.com.
In 2013, Vitalik Buterin wrote the Ethereum idea on a white paper and sent it to his friends. In his mind, he was expecting criticism and corrections about his concept but instead, he got support for it. The project was made known publicly in 2014, and since then, it’s become the go-to crypto.
How to Buy Ethereum
It is effortless to buy Ether.
The first step will be picking an Ethereum exchange. Some of the popular exchanges are Coinbase, Poloniex, Gemini, Kraken, Bitfinex, and GDAX. Notably, each exchange has different ID verification stages, purchase limits, and processing fees.
The second step is to create an account. You can easily do this on the exchange’s website or application. Here, your personal information is asked for, such as the name and photos of your ID.
The third step is to add a payment method, for example, debit cards, to fund your account.
The final step is to buy Ether. If a whole Ether coin is too expensive for you, you can purchase a fraction of it, e.g., 0.0007 Ether.
How to Store Ethereum
You can choose to store your Ethereum in either a free software wallet or a secure hardware wallet for beginners. To transact in software wallets, you can scan a QR code, while in hardware wallets, you have to double-check Ethereum addresses for any typos.
How Ethereum Works
Ethereum is based on the Bitcoin protocol and blockchain design. However, the concept is designed to be compatible with applications that are not money systems. The good thing about Ethereum is that it downloads the most current information with each intelligent contract made in the network.
An individual Ethereum comprises millions of transactions. Therefore, before any transaction is included in the ledger, it goes through validation in a process called mining. In a layman’s language, ‘mining’ is just proof of work.
How to Use Ethereum
Ethereum is mainly used for buying goods and services. Some popular companies such as Microsoft, Samsung, Mastercard, and Intel accept Ether as payment. In addition, you can purchase tokens to use apps that are running in the Ethereum blockchain.
Developers are allowed to build and deploy decentralized applications in Ethereum. More so, any centralized service can be easily decentralized through Ethereum. The blockchain of Ethereum brings about transparency, trust in transactions, efficient working, and security in any business.
Ethereum can be held as an investment. In long-term investing, you buy and hold your Ethereum with the hope it increases value over time. The short-term investment is buying and selling Ether.
Other activities one can easily accomplish with Ethereum include: buying games, creating unique collectibles, track the shipment of goods, vote, obtain licenses and diplomas and lastly get loans.
How to Secure Ethereum
- Avoid using public Wi-Fi if you want to ensure your Ethereum is secure. Only use your devices and personal internet.
- Avoid fake websites. To visit your preferred exchange, type the URL directly in the browser’s address bar. Do not click on random links you find on the internet, as some may lead to fraudulent sites.
- Do not copy and paste your Ethereum recovery phrase into any browser or software. They are safer stored offline on paper. Your browser can be easily infected, and also software add-ons can easily read your information.
- Be very suspicious of the Ethereum money-making opportunities that are advertised online. Always do your research before indulging in anything.
- If you get emails or even social media messages from the Ethereum services and exchanges you use, be careful. Scammers can pretend to be exchanged, and they can, in turn, ask for your passwords and other private emails. If you want to get in contact with your exchange, go directly to their official website.
- Use a hardware wallet as it moves the access to your Ethereum offline. Doing this ensures your Ether is not at risk of getting hacked.
- Ensure that you enable and use two-factor authentication. You can either do it by text or via free two-factor services such as the Google Authenticator.
- Create a backup of your recovery phrase for when you lose it. It is also brilliant for you to keep old wallets.
- Frequently run software updates.
- Lastly, if you have a lot of Ether, it is advisable to create two separate wallets. One for long-term holding and the other for short-term trades. This reduces the risk of you losing your Ethereum.
Ethereum is yet to be completely anonymous, and so one has to ensure they use Ethereum responsibly. Since it is still a new technology, its price is very volatile, so always do your transactions with a very open mind. It surely is going to test your patience more than ever before.