Ethereum was recently introduced at ayondo where you can trade the cryptocurrency as a CFD or a spread bet. The cryptocurrency has already risen as one of the top cryptocurrencies on the market, second only to Bitcoin. Although similar to Bitcoin, Ethereum has other applications in terms of ability and purpose.
If you are new to this cryptocurrency and don’t understand exactly what it is or how it works, the following information is for you.
An Overview of Ethereum
What are cryptocurrencies?
Before diving into Ethereum, let’s first take a look at a description of cryptocurrencies in general.
Cryptocurrencies are generally based on blockchain technology (a distributed, decentralised ledger of all transactions). These digital currencies are secured through one-way cryptography, the enciphering and deciphering of messages in secret code. Cryptocurrencies can be used to buy goods, mine, invest and are accepted as payment by some businesses.
Ethereum was launched in 2015 and can be used to ‘codify, decentralise, secure and trade just about anything,’ according to Ethereum.org. Ether is the token used on the network – mined by miners and purchased by investors (either the product itself or as a CFD). A simple definition is that Ethereum keeps a permanent record of digital transactions on a public database.
Like Bitcoin, Ethereum is a distributed public blockchain network that is decentralised. However, Ethereum focuses on running the programming code of an application. Developers are able to create smart contracts enabled through Ethereum. Distributed Applications (DApps) can also be built through the network. Normally referred to as a cryptocurrency, Ethereum is technically both a cryptocurrency and cryptocommodity.
The price of Ethereum is influenced by several major elements including Bitcoin’s price, the media, the price of energy, etc. The price and market cap of Ethereum as of 5 March, 2018 are:
- Price: $867.02*
- Market Cap: $85.0 billion
The purpose of Ethereum is to use blockchain technology to replace internet third parties. The network is aimed at becoming a ‘World Computer’ with volunteers running thousands of ‘nodes’ globally to replace servers and clouds.
How does it work?
Rather than only serving as a method of payment or to store value, Ethereum serves as a network to create and run apps and smart contracts. Similar to Bitcoin, there are miners within the Ethereum blockchain who mine the nodes to create and validate a block. Ether acts as the reward for these miners. Block time for Ethereum is faster than Bitcoin at 12-14 seconds compared to Bitcoin’s 10 minutes.
Contracts written in code are uploaded to the blockchain. These are known as smart contracts and they have the potential to eliminate usual third-party restraints such as with legal systems or crowdfunding processes. The Ethereum blockchain carries out the terms of smart contracts if certain conditions are met.
Key benefits to Ethereum include that the data cannot be tampered with and is backed by secure cryptography which makes it virtually unhackable.
How can I trade Ethereum?
On ayondo, Ethereum can be traded as a CFD and as a spread bet. This means you don’t have to buy the cryptocurrency directly. Another advantage is that you can participate whether it is a rising or falling market. You can also gain exposure with Ethereum by becoming a Follower and following Top Traders who trade the cryptocurrency.
**Price and Market Cap was taken from CoinMarketCap.com.
The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.