3 Ways to Invest in Ethereum
I missed out on the Bitcoin surge. Is Ethereum a good alternative to Bitcoin? How can I buy Ethereum?
I get these questions all the time.Before I state my Ethereum price prediction, and how it compares to my Bitcoin price prediction, let’s get the basic procedure out of the way. There are three conventional ways to invest in Ethereum.
1. The American Way: Through Coinbase
Coinbase is a prominent digital exchange in the U.S. All you have to do is create an account, add your payment method, and you’re off to the races. You can purchase tokens instantly by clicking on the “Buy/Sell” tab of the Coinbase website and entering an amount. The transaction fees range from 1.49% to 3.99%, depending on your payment method. (Source: “BUY AND SELL DIGITAL CURRENCY,” Coinbase, last accessed June 26, 2017.)
2. The International Way: Through CEX.IO
While Coinbase is restricted to purchases made within the U.S., CEX.IO is for those who want to invest in Ethereum elsewhere in the world. It structures pricing a little differently, however, by calculating the fees into the exchange rate. This can lead to an unwanted premium or room for arbitrage. Nevertheless, it is a common and easy-to-use platform. (Source: “BITCOIN EXCHANGE YOU CAN TRUST,” CEX.IO, last accessed June 26, 2017.)
3. The Good Ol’ Fashioned Way: Through Ethereum Mining
Like with Bitcoin, regular folks can direct their computers to unlock more ether tokens on the Ethereum platform. The computers unlock more ether tokens by solving tricky mathematical puzzles, which act as cryptographic safeguards for the ether supply. Since the cryptography is very complex, it requires powerful processing units dedicated to the task. These GPUs are costly to maintain, not to mention that the ether rewards shrink over time. In other words, Ethereum mining won’t be profitable for much longer.
Note: When trying to buy ether tokens, you may notice two different symbols: ETH and ETC. The former stands for Ethereum, the latter for Ethereum Classic. ETH represents the most up-to-date version of Ethereum, whereas ETC had a fundamental flaw that was exploited during a disastrous experiment called “The DAO.” Just to be clear, when I speak or write favorably about Ethereum, I am talking about ETH.
Should You Buy Ethereum?
Now that we’ve addressed questions of process, let’s get to the meaty stuff. Is Ethereum better than Bitcoin? I’ll let the ETH price chart answer my question. This is for just one year.
Chart courtesy of Coindesk.com
This isn’t to say that Bitcoin is finished or that Bitcoin is dead.
BTC prices are up by triple digits this year, which is what we want to see as investors. We don’t get out of bed for single or even low double digits. It’s the 100%, 200%, and 300% returns that get us excited.
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That said, Ethereum’s gains stretched well into four figures, so it is the clear winner.
Past is merely prologue, however, so let’s examine which currency is likely to win in the next 12 months. I personally believe that those who invest in Ethereum will make more money, though I know there are those who would disagree.
The “Purists,” as I like to call them, believe that Bitcoin is destined to devour the alternative currencies that have sprung up in its wake.
There are a lot of technical aspects to their argument (that I won’t get into), but the real crux of their logic is ideological.
To them, Bitcoin is an antidote to fiat money. It is the ultimate cure for a civilization imperiled by central bankers. Based on this philosophy, they believe that a cataclysmic event in the global financial markets will drive everyone towards a new, impregnable currency with a fixed supply.
Bitcoin, in other words, is their answer to free-flowing printing presses.
Never mind that Bitcoin’s ledger is already clogged up because of a stupid mistake in its code.
Never mind that Ethereum can offer smart contracts, initial coin offerings, and faster transaction times. Or that Ethereum is already working with the Russian government, an energy consortium, and media giants.
That doesn’t matter as much as a crypto-libertarian fantasy, right?