Ethereum is the second-largest cryptocurrency in terms of market cap, trailing only Bitcoin. Like Bitcoin, Ethereum also provides users with a general ledger for transactions and a network to send tokens from one user to another. However, that’s Where the similarities end. Whereas Bitcoin is essentially a virtual token that can be used as a currency, Ether functions more like an asset or digital token that can be used to pay for transaction fees or services on the Ethereum network. Ethereum was first released in 2015, and it continues to grow in popularity and attract new developers almost every day.

This article explains everything you need to know about how to buy Ether and how it differs from Bitcoin.

What Is Ether?

Ether is the platform-native token of the Ethereum network. Although it can be traded and exchanged, Ether is mostly used as a “gas” or “fuel” to send transactions on the Ethereum network. In other words, you need Ether to do almost anything on the Ethereum network. If you’re new to Ethereum, you can think of Ether as gasoline for your car. Ether is the “gas” in Ethereum. You need it to drive the Ethereum network. Without Ether, you’re stuck at the first-mile marker trying to push the car. If you’re familiar with the Ethereum network and Blockchain technology, you’re likely aware that Ether is not only a “gas” token. Ether is also a digital asset that investors can buy and trade like stocks.

How to buy Ether

If you’re completely new to cryptocurrencies, we recommend you follow this step-by-step guide to buying Ether. Before you dive in, let’s clear one thing up first. You do not buy any other altcoin directly with fiat currency. There are two ways to invest in Ether.

You can Invest in Ether as a digital asset or buy as a fuel token. If you want to buy as a digital asset, you can either purchase it from an exchange-listed for trade against other cryptocurrencies or purchase a “contract for difference” (CFD) that tracks the price of Ether. If you want to buy as a fuel token: You can buy using your regular fiat currency through a crypto exchange that accepts fiat deposits, such as Coinbase.

How to store Ether

It’s important to understand that you don’t “store” Ether like you can store fiat currency in a bank account. When you purchase Ether, you’re buying a digital token that represents the value of Ether. We recommend storing your Ether on a hardware wallet. If you prefer to store your Ether on an exchange, the best practices include setting up a separate account and moving your Ether out of the “trade” account as soon as trading is over.

The DAO and Ethereum’s fork

DAO is an acronym for Decentralized Autonomous Organization. At its core, Ethereum is a general ledger that can be used to store transaction data. The DAO was built on top of the Ethereum network as a decentralized autonomous organization meant to be a venture fund. DAO users got voting rights and could vote to fund certain projects. If a project got a certain number of votes, the funds were transferred to the project owners, and the project was executed. Unfortunately, hackers could break into the DAO network and steal funds from it. The Ether funds were taken from the DAO and sent to a separate account. Since Ethereum is an open-source network, no one had the authority to reverse the transactions.

Should you buy Ether?

If you’re new to cryptocurrencies, you should buy Ether as a fuel token. Using your regular fiat currency, you can use Coinbase to buy as a fuel token. If you’re an experienced crypto-trader, you can also buy it as a digital asset. In both cases, you should buy as soon as possible.

Ether Investment Strategies

You need to know two things about the crypto market before you start trading or investing in Ether. First, the crypto market is extremely volatile. The price of Ether and other cryptocurrencies can rise and fall by thousands of dollars in a single day. Second, there is no guarantee that the price of Ether will go up. Unlike stocks, which have a history of rising value, cryptocurrencies are highly speculative assets that can yield high returns or become worthless. Given the extreme fluctuations in the value of Ether, here are a few investment strategies that can help you navigate this volatile market and make the most out of your investment.

Ether Wallets

Now that you’ve bought Ether, it’s time to store it in a wallet. Store your Ether in a hardware wallet. Hardware wallets are small, USB-like devices that store your Ether offline. They are

considered the most secure way to store your Ether tokens. There are several hardware wallets that you can choose from. We recommend that you choose Ledger Nano S. Once you’ve bought your hardware wallet, follow the instructions to set it up and start using it.

Warning

Cryptocurrencies are still new and an exciting asset class to invest in. Unfortunately, they are also an attractive target for scammers. As the popularity of Ether and other cryptocurrencies has grown, so has the number of scammers looking to cash in on the trend.

You can guard yourself against scammers by following a few simple rules: Only buy from a trusted cryptocurrency exchange. Don’t put your life savings into Ether or any other cryptocurrency. Lastly, only trust information that you find on reliable websites such as trusted news sites.

If you want to use Ethereum, buy a small amount to start. You can then increase your holdings as your knowledge and experience of the cryptocurrency grows. Don’t invest what you cannot afford to lose because cryptocurrencies are still a very risky investment.