What is Ethereum? (And How to Trade Ethereum)

Ethereum is a scalable platform that helps build decentralised applications. The platform also has its own digital coin, Ether (ETH), which is the second-largest cryptocurrency in the world. Ethereum has a market cap of 155.58 billion US dollars. Every day, around $1.048 million in Ethereum transactions are made, and its token has henceforth generated as much as 300% in 2021. 

In our article, we will delve deeper into Ethereum, ETH and its use cases.   

What is Ethereum?

Ethereum is a digital blockchain technology platform supporting several decentralised applications (apps that do not need an intermediary to operate) like cryptocurrencies and can be used by anyone to create a digital technology that is secure. 

Ethereum has its own digital token called Ether (ETH), which is traded worldwide on cryptocurrency platforms. Ethereum as a platform also supports smart contracts (scripts of code that help in exchanging money, content, shares etc.), which is needed to build decentralised apps, decentralised finance apps and more.  

How does Ethereum work?

Ethereum is an open software platform that works on blockchain technology. This technology is hosted on several systems across the globe, which makes Ethereum decentralised and scalable. Each system on which Ethereum runs has a copy of the blockchain, and to make any changes to the platform, an agreement needs to take place. 

Ethereum’s token Ether uses a digital ledger where all ETH transactions are recorded. It is a transparent, publicly accessible and decentralised ledger. The token is used as a mode of payment or even as a collateral since it is considered as an asset. 

Benefits of Ethereum

Multiple functionalities

Besides being the number one platform that helps in developing decentralised applications and working as the second largest cryptocurrency in the world, Ethereum has multiple other functions as well:

• ICO platforms: Ethereum assists in conducting crowdfunding through Initial Coin Offerings (ICO) and helps companies launch an ICO platform of their own. This helps the companies create their own digital currencies with complete freedom in a flexible ecosystem.
• Payment gateways: Ethereum allows sending money without any transaction fees such as payments and remittances. Several payment gateways are integrated with the platform and let users store funds in the form of ETH and convert it into fiat currency as per their requirement.
• Medical/Healthcare apps: Ethereum has been working to change the healthcare space by enabling hospitals across the globe to store, secure and access patient records and share them with security through Ethereum. This deployment is going to be significant for preventing and controlling future outbreaks. 
• Tokenising assets: Ethereum as a platform supports the multi-trillion-dollar security token market. These tokens represent real assets like metals, real estate, stocks and more which can be transferred from one user to another using Ethereum’s tokenisation power. 
• Digital identify manager: Ethereum has developed several apps and use cases that prevent identity fraud and theft by digitalising identities. Individuals, IoT devices and companies can create and maintain their digital identities through Ethereum’s components like decentralised identifiers with embedded encryption. And identity management.

Solid existing network 

Ethereum already has a large, strong and existing network in place, which has been tried and tested over the last few years. With its years of operations and billions of US dollars being traded in terms of ETH every year, the platform is reliable. 

Ethereum also has a committed and large global community along with the largest blockchain and cryptocurrency ecosystem to have ever existed. In fact, Ethereum’s token ETH is a strong indicator of how the overall cryptocurrency market has been performing, confirming the significance of the application as a whole. 

Consistent innovation

The community of Ethereum developers is large and determined enough to constantly look for improvement areas in the network and develop new types of applications. This makes Ethereum a consistently innovative and developing platform. One of the most preferred blockchain networks for exciting decentralised applications due to its constant updating as per the dynamic market.

No intermediaries 

Ethereum is a decentralised network that ensures there are no third-party intermediaries in any application. Hence, users do not have to face any third-party web hosting service providers, banks for financial transactions or lawyers to interpret contracts. Everything on Ethereum is done directly. 

How to trade ETH via CFDs?

You can trade ETH either directly on a cryptocurrency platform or through CFDs on any trading platform. 

When trading ETH with a contract for difference, you can speculate ETH’s price movement and trade it without actually owning the cryptocurrency. Hence, you do not take ownership of the asset but only open a position with a small percentage of the full investment. This gives you exposure to large trading positions and profits with a minimal deposit. The position value increases or decreases as per ETH’s price movement against a fiat currency like USD, GBP, EUR and more. 

With CFDs, you can trade both the falling and rising markets by going short or long, respectively. All you have to do is open a forex trading account, choose to trade CFDs, select the currency you want to trade in the crypto market, select the trade size and open a position. Here is why CFD cryptocurrency trading is beneficial:

• It offers leveraged trading, which means you deposit a small amount to get higher exposure and magnified profits.
• It does not require you to have a crypto exchange account, or wallet to trade the token. 
• All trades can happen directly through the trading platform with no exchange approvals, wallet security or withdrawal fees.
• You can trade the growing crypto market with an existing and established provider offering CFD trading.
• Cryptocurrencies are still a new concept for most, and CFD crypt trading allows you to trade responsibly with educational materials, technical indicators, and price charts that support your trading strategy.

Start crypto CFD trading today

Ethereum’s token ETH is one of the most highly traded cryptocurrencies in the world and has given significant returns in the past. You can start trading the popular cryptocurrency’s CFD today by opening an account with Blueberry Markets.

Sign up for a live trading account or try a risk-free demo account.

About The Author

Tim Maunsell

Tim Maunsell is Blueberry Markets’ senior member of the Customer Experience team, with over a decade of experience in the global forex market. Tim has honed his skills in developing trading strategies and analyzing financial instruments from both technical and fundamental perspectives. He regularly contributes articles on trading and financial markets. Tim is dedicated to sharing his insights to provide readers with compelling, well-researched content that keeps them informed.
Expertise: Financial markets and Forex trading

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