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Is It Safe To Invest In Ethereum

Dave Miller with Online Cloud Security

Dave Miller – Tech Enthusiast & Security Expert – February 15th, 2022

Is it safe to invest in Ethereum

Is it safe to invest in Ethereum? Well aside from the price swings, let’s look at Ethereum from a different angle, because like real estate, it’s definitely an asset worth looking into.

Ethereum is a type of crypto that runs the Ethereum network (its own network) and is essential for operating your app or executing your transaction on the highly-desirable Ethereum blockchain. Smart contracts, which Ethereum supports, are not supported by Bitcoin, despite Bitcoin’s excellent performance as a store of wealth. Perhaps Ethereum is just as good a store of wealth as Bitcoin. Because of the hard restriction on its production, many people choose bitcoin as a store of wealth.

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What Is The Safest Way To Invest In Ethereum?

Is It Safe To Invest In Ethereum? The Ethereum blockchain token, is one of the top three cryptocurrencies in the world. 

After Bitcoin’s around $800 billion market value, it has a market value of about $380 billion, which is ahead of Binance Coin’s market value of over $75 billion. Crypto assets dropped throughout 2018 and 2019, but rebounded to new highs through 2021 and are currently worth several times more than they were at their December 2017 peak; however, the beginning of 2022 has seen a bit of a slump in the crypto market. A lot of people are still interested in this area since the market is seeing a lot of new developments. It was selling at roughly $3,250 in January 2022 compared to the highs over $5,000 seen in November 2021. 

how the ethereum network works to ensure safety

The Ethereum Network’s connectivity with the digital currency is its key selling point. The Ethereum Network’s overall capabilities are mostly driven by ETH. ETH is seen as a more attractive investment than Bitcoin because of the Ethereum Network’s wide range of development possibilities. 

Multiple Fortune 500 firms and financial institutions have also invested in Ethereum, and because of this, this is another reason why it is safe to invest in Ethereum for the long term (5+ years). 

Many investors are quickly adding ETH to their portfolios for all of the above reasons and more. If you wish to acquire Ethereum directly, you may do it on a crypto exchange, via a stock broker, or even through a payment app that accepts it. If you want to buy Ethereum, you can find it on almost any site that sells digital currency. 

A crypto exchange such as Coinbase or Binance is typically the best and most safest choice for serious crypto investors who are thinking about investing in Ethereum safely. The greatest variety of coins and most advanced functionality may be found on exchanges. They also let you to move your cryptocurrency to a wallet of your own choice. You may not be able to transfer your cryptocurrency to any other service.

Safest Ways to Invest in Ethereum

Common questions comes to your mind that Is It Safe To Invest In Ethereum Investing in these companies can help you get exposure to the Ethereum virtual currency.

Adding Ethereum to your brokerage account is made simple with this professionally managed fund. A certain number of Ether coins underpins each stake (approximately 0.01 Ether per share). At the current conversion rate, the fund’s shares are typically cheaper than the value of Ethereum. Grayscale’s yearly management fee is 2.5 percent, which is a little on the high side. There is no price arbitrage potential for shareholders since they cannot swap their shares for Ethereum.

It is the world’s largest index fund manager for crypto assets.. The Bitwise Ethereum Fund is one of several managed cryptocurrency and Ethereum funds available via the company. The minimum investment for this fund is $25,000, and accredited investors may participate. To save transaction costs, the fund’s management keep the Ethereum in cold crypto storage offline, making this a cost-effective and safe Ethereum stock. 1.5 percent of your yearly revenue goes for management.

In terms of trading volume, it’s the biggest exchange in the United States. Buyers and sellers of various cryptocurrencies, including Ethereum, pay transaction fees to the firm. Many of the other cryptocurrencies sold on Coinbase utilise the Ethereum blockchain in addition to Ethereum itself. Coinbase has grown at an astounding rate as more and more people turn to bitcoin, making it one of the most lucrative businesses in the space. During the second quarter of 2020, there were 1.5 million monthly users, which increased by 487 percent in the following year. Over the same period of time, net revenue increased from $178 million to $2.03 billion.

Ethereum 2.0 is currently being developed. To verify transactions, a proof-of-stake model must be adopted. With this concept, Ether token holders have the option of putting their tokens up for stake in order to receive incentives for verifying transactions. A regular investment entity, the Staked ETH Trust is the first to provide owners with access to Ethereum and the opportunity to profit from staking. Accredited investors may purchase the fund via a private placement. It requires a minimum investment of $25,000 and an expense ratio of 1%.

This bargain broker may be most recognized for introducing commission-free trading. Not only has it been ahead of the curve in this regard. It started providing Bitcoin and Ethereum trading in 2018. Since then, the broker’s offering has grown to cover Litecoin and Bitcoin Cash as well. Even if Robinhood isn’t a pure cryptocurrency play, it does provide you some exposure to Ethereum.

Differences Between Ethereum and Bitcoin

Is It Safe To Invest In Ethereum in 2022? Prior to asking “Should I purchase Bitcoin or Ethereum?” you should know the differences between Bitcoin and Ethereum, which is referred to as “Ethereum” because of the network of the same name. Ether is the name of the network’s native cryptocurrency. Much more room for manoeuvre. 

Ethereum and Bitcoin are like comparing energy and gold, according to some experts. Bitcoin is more of a commodity than Ethereum since it’s “more like gold”. To put it another way, the only use for Bitcoin is as a means of storing wealth. There is practically no limit to what the Ethereum network can do. Down below is a chart of Ethereum and Bitcoin daily transaction volumes. Remember, the higher the daily transactions, the higher the fees are going to be.

Ethereum and Bitcoin daily transaction volume

Other cryptocurrencies are created on the platform; nonfungible tokens, or NFTs, are traded freely; and the whole area of decentralized finance, or DeFi, was ushered in by Ethereum and its diverse capacity to establish smart contracts. Transaction fees are one area where ETH clearly falls short of BTC, at least in the short term. While Ethereum-based transactions are often quicker than Bitcoin transactions, there is a significant penalty associated with this speed, known as gas costs. 

Especially for tiny transactions, the gas prices used to pay participants for transaction validation might be excessive. According to Adrian Kolody, a co-founder of Domination Finance, a non-custodial, decentralized exchange for trading crypto domination or market share, Ethereum’s high network utilization has resulted in inflated gas prices. Because no one wants to spend $35 in fees for a $40 purchase, this is a significant issue for Ethereum as a retail payment method. As the most popular cryptocurrency network in the world, Ethereum faces a big barrier to wider growth and use because of the high cost of gas. Solana and Avalanche, which have substantially cheaper fees than Ethereum, are emulating its usefulness.

proof of stake in Ethereum

As opposed to Bitcoin’s energy problem, Ethereum has a strategy to assist overcome its most visible weakness: it is slated to transition from the expensive and energy consuming proof of work protocol to the proof of stake. ETH 2.0 has many new features that have been in the works for some time, one of which is this one. According to Kolody, the transition promises to make Ethereum “a viable real-life retail payment option.” Over the past year, Ethereum has become a popular alternative to Bitcoin. As a result, Ethereum has been embraced by a large number of businesses and start-ups as a means of doing business (and more). 

I prefer to think of Ethereum as the diamond of cryptocurrencies in the cryptocurrency wars because it has both an intrinsic and an industrial value. Bitcoin, on the other hand, is like gold in that it doesn’t have a lot of industrial use, but individuals purchase and trade it because of its intrinsic worth to them.

Is It Safe To Invest In Ethereum 2.0 and EIP-1559? Since its launch in 2015, Ethereum has been vying with Bitcoin for the top place as the most valuable cryptocurrency by market capitalization. In February 2018, Ether came dangerously close to surpassing Bitcoin. Since then, both currencies have reached new all-time highs, and it looks like there will be more space for growth in 2021 for both of these coins. According to some analysts, Ethereum will “flip” Bitcoin this market cycle and become the main cryptocurrency.

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Dave Miller with Online Cloud Security

Dave Miller

IT Consultant at Online Cloud Security

Dave Miller is an IT Consultant for Online Cloud Security and has over 7 years of experience in the Information Technology space. He also specializes in repairing laptops & computers. In his spare time, he loves to talk about new technologies and hosts monthly IT and Cyber Security meetings in the Houston area.

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About Online Cloud Security:

Online Cloud Security is here to recommend you the most secure devices, from laptops to smartphones, we only want to provide you with products that we have tested and used ourselves for online security. Every product that we recommend is heavily inspected and tested for security against hackers, viruses, malware, and any other intruders that may want to steal your information. 

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Online Cloud Security Logo (500x500px)

About Online Cloud Security

Online Cloud Security is here to recommend you the most secure devices, from laptops to smartphones, we only want to provide you with products that we have tested and used ourselves for online security. Every product that we recommend is heavily inspected and tested for security against hackers, viruses, malware, and any other intruders that may want to steal your information. 

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