Ethereum

Guide: learn all about buying Ethereum (ETH)

Ethereum is the second biggest cryptocurrency.

So that makes the choice to buy Ether a wise idea, especially if you’re looking to diversify your crypto portfolio.

But, for some, that might seem scary or difficult.

For those of you that are totally new to crypto, we’re going to take you from A to Z, helping you every step of the way to buy Ether.

If you’re a crypto veteran, we’ll refresh you in the basics.

After all, it’s always a good idea to go over the basics every now and then!

Let’s learn everything about Ethereum and how you can buy it!

What is Ethereum and how does it work?

To begin, we’re going to get right down to basics.

So, if you’re already familiar with Ethereum, feel free to skip ahead.

But it’s always worth going back over the basics as Ethereum is constantly evolving.

Ethereum is a powerful decentralized blockchain with an incredible number of use cases.

It’s the brainchild of Vitalik Buterin and has taken the world by storm.

Ethereum was designed to be the world’s first programmable blockchain, designed to let developers build and publish smart contracts as well as decentralized applications (dApps).

Instead of tracking ownership of coins, Ethereum focuses on running programming code for the dApps.

Think of Ethereum as a server, giving applications life.

Ether is the cryptocurrency used to transact on the Ethereum blockchain.

What can Ether be used for?

Once you’ve made the decision to buy Ether, you’re part of the club.

You can use Ether for a wide range of things, but the most common is to play with dApps or interact with smart contracts.

There are companies that will accept it as a method of payment, but this isn’t its primary use.

Remember, Ether isn’t a cryptocurrency that focuses on payments.

Every time you buy a collectable, use a protocol on Ethereum or mint a non-fungible token (NFT) you’ll have to pay gas fees.

These gas fees are the fees you pay to interact with the blockchain.

It’s paid in Ether, so even if you’re using an app that has its own currency on the Ethereum blockchain, you’ll still need to buy Ether to make it work.

What is the Ethereum blockchain?

The Ethereum blockchain is very different to other types of blockchains, especially Bitcoin’s.

Instead of hosting a list of transactions, its primary goal is to run code, acting almost like a giant decentralized server for contracts and dApps.

Projects can then create their own tokens on the Ethereum blockchain and use them in their smart contracts and dApps.

These are known as ERC-20 tokens and are separate to Ether.

ERC-20 tokens allow you to interact with specific dApps and smart contracts, like Crypto Kitties or Uniswap.

You can swap your Ether into these various ERC-20 tokens and store them in an Ethereum wallet.

Every time you want to move an ERC-20 token, for example if you buy or sell a Crypto Kittie, then you pay for the fees in Ether, not the ERC-20 token.

The one drawback of the Ethereum blockchain is that it doesn’t scale well.

If too many dApps try to work at the same time, for example 1,000 people all want to buy a new Crypto Kittie, then the network jams up.

This causes gas fees to rise, and the network becomes almost unusable.

For example, if your Crypto Kittie costs $5 in Ether to buy, the gas fees could be $60.

There are some improvements on the way in Ethereum 2.0, but it still doesn’t have a launch date.

What is an Ethereum wallet?

Once you’ve managed to buy Ether or an ERC-20 token, you’ll need an Ethereum wallet to store it safely.

Most cryptocurrency exchanges don’t support all ERC-20 tokens, so you need an Ethereum wallet if you’re going to fully indulge in the ecosystem.

These wallets work exactly like other cryptocurrency wallets but are a little more user-friendly.

This is because you must use them so often to move your ERC-20 tokens around and to interact with smart contracts.

The easiest Ethereum wallets are mobile wallets and browser extensions.

Browser extensions are slightly better to use if you use the Ethereum network a lot.

MetaMask is by far the simplest and best Ethereum extension that you can use.

It’s quick and easy to set up and works with every single Ethereum dApp or smart contract.

If you prefer a mobile wallet, the best Ethereum mobile wallets are:

• Trust Wallet
• MEW
• CCWallet
• Atomic Wallet

Once you’ve picked a wallet to use, you’ll be given a 12-word seed phrase that can be used to restore the wallet.

Store this somewhere safely.

If you want to learn more about crypto wallets, you can check out our detailed guide to crypto wallets.

There we go into more detail about how to set them up and how to keep yourself safe when using them.

How does an Ethereum transaction work?

Making an Ethereum transaction can be a little confusing, especially as there are tiered gas fees.

To buy Ether, you’ll likely be using an exchange.

Simply deposit in the fiat currency you wish to use, and head to the Ethereum market for that currency.

Once there, select how much you wish to buy and select market price.

That will fill your order at whatever the current price is, rather than waiting for something specific.

Once you’re happy, click buy and just like that, you’ve managed to buy Ether.

To move it off of an exchange, which is always a good idea, you’ll need to hit withdraw.

Paste in your Ethereum wallet address and then check it for mistakes.

Hackers can inject code into devices which will change the information that has been posted, so spend a minute triple checking.

Once you’re happy that the amount and wallet address is correct, click withdraw.

Your transaction will be submitted to the blockchain and the Ether will be on its way to your wallet.

If you’re using a wallet to pay for fees or interact with the blockchain, you’ll get pop ups that you need to confirm.

For example, when making a deposit to Uniswap with MetaMask, you’ll get a popup to confirm the details of the transaction.

Simply hit confirm and the Ether will make its way over.

Gas fees vary based on what you’re sending.

Simple transactions to and from wallets are the cheapest transactions, while sending other ERC-20 tokens cost a bit more.

The more data you are sending, the more the transaction costs.

There are times of the day where it’s cheaper to use Ethereum, so if keeping costs down is critical, monitor the fees and pick a period when they’re low.

How does an Ethereum address work?

Ethereum addresses come in at a whopping 42 characters, making them some of the longest around.

You create an address by taking the SHA3 hash of your public key, chopping off the final 20 characters.

But don’t worry, a wallet will generate this automatically for you.

This is where your Ether and other ERC-20 tokens will live.

ERC-20 tokens are compatible with virtually all wallets that support Ether.

You use the same wallet address for all your ERC-20 tokens and your Ether, it will work just fine.

You can opt to generate new addresses for various transactions or use the same one over and over.

The only reason to do this is for a bit more privacy.

Are there any risks with Ethereum?

As with all cryptocurrencies, there is a good deal of risk when using them.

If you enter the incorrect wallet address, you will lose your Ether.

There’s no way to get it back once you hit send, so triple check the address before you hit send.

Other risks include losing your seed phrase, getting hacked and burgled.

You should store your seed phrase in a safe and secure location, ideally offline and in a safe.

It’s also advisable to adhere to cyber security best practices in order to avoid getting hacked.

Use unique passwords for wallets, websites, and applications.

Password managers like LastPass or My Digi Password are great help here.

Finally, if you’re going to brag about how much Ether you’ve got tucked away, make sure your address isn’t on the internet.

Thieves can easily put 2 and 2 together and come around your house.

Finally, the last risk is financial loss.

While Ethereum can go up in value, it can also go down.

Cryptocurrency suffers from wild volatility, so be prepared to wake up tomorrow morning and potentially be down 10%.

On the other side of that coin, volatility can push the value of your Ether up.

Is Ethereum legal? 

Cryptocurrencies are viewed differently by regulatory bodies all around the world.

But they’re all treated the same.

This means that if Bitcoin is legal, all other cryptocurrencies are.

At the moment, there’s a blanket bank on cryptocurrencies in the following countries:

• Algeria
• Bolivia
• Egypt
• Morocco
• Nepal

However, the misery doesn’t end there.

Other countries have partial bans, which include the likes of banking bans or currency use bans.

Banking bans mean that you cannot use your bank account to buy cryptocurrencies.

Currency use bans mean that you can buy and sell cryptocurrencies, but you cannot use them to pay for goods or services.

The following countries have partial bans on cryptocurrency:

• Bangladesh
• Cambodia
• Canada
• China
• Colombia
• Ecuador
• Indonesia
• Iran
• Jordan
• Nigeria
• Qatar
• Russia
• Saudi Arabia
• Taiwan
• Turkey
• Vietnam

Is it safe to buy Ethereum?

When you use an exchange or stockbroker to buy Ether, you might have concerns that it’s not safe.

For the most part, you’re pretty safe if you use a reputable exchange or stockbroker.

Find the best exchanges and stockbrokers to buy Ether with our comprehensive reviews.

If you’re going to hang on to your Ether for a while, it’s recommended to move it to a wallet that you control.

By this we mean a wallet where you own the private keys.

Not your keys, not your crypto, so the saying goes.

Exchanges have a bad reputation for getting hacked and running off with user funds.

So, do yourself a favor and move everything to your own wallet.

If you do this, and use a reputable crypto exchange or stockbroker, then buying Ether is super safe.

Can someone hack me or steal my Ethereum?

If you follow good cyber security practices, then getting hacked or having your Ether stolen isn’t likely.

However, if you are one of those people that use the same password for every website and app, then you could very well get hacked.

Use a different password for every website and application.

Password managers like LastPass and My Digi Password are very useful for this.

If you give others your seed phrase, they can easily access your wallets and clean them out.

Also be aware of scammers that are pretending to be an exchange or giving something away.

Don’t click suspicious links, and if anything sounds too good to be true, be very skeptical.

Generally speaking, people don’t give things away for free.

So, if someone offers you free Ether, run for the hills.

How can I buy Ethereum?

There are lots of ways to buy Ether, but some are better than others.

We’re going to run you through every possible way that you can buy Ether.

It’s really quick, easy and simple – so don’t worry!

Before you pick a way to buy Ether, you need to decide one thing.

Do you want to buy actual Ether that you can track on the blockchain, or do you want stress-free Ether that can’t be hacked, lost or spend?

If you’re unsure of the difference, don’t panic as we’ll go through those here as well!

Buy Ether with an exchange

The most popular way to buy Ether is to use a cryptocurrency exchange.

Crypto exchanges give you the quickest, fastest and most exciting way to buy Ether.

For those of you that want to get into the trading side of things, a cryptocurrency exchange will become your best friends.

To see the best cryptocurrency exchanges to buy Ether, you can scroll to the top of the page or click here.

When you go to buy Ether from a crypto exchange, you’ll need to complete KYC by uploading a picture of your ID and filling out some questions.

Once you’ve done that, you can make a deposit using any one of the deposit methods available.

Using a credit or debit card is usually the fastest, but it might incur a small fee.

Once your account has some fiat in it, simply head on over to the Ethereum market.

Input how much you wish to buy, select market order (that means you’ll pay the current price) and hit buy!

It’s as simple as that.

Once you’ve bought Ether from an exchange, it’s a good idea to move it to your Ether to a wallet that you control.

This keeps it safe from hacks and attacks as exchanges are still fairly risky places.

Buying Ether from an exchange gives you the real deal, and you can see your Ether on the blockchain – how cool is that!

Buy Ether with your stockbroker

If you don’t want to dive into the world of crypto exchanges, then your stockbroker will be your best friend.

Most stockbrokers and stock trading platforms have some sort of cryptocurrency products.

This means that you can get exposure to Ether without having to create a new account and go through the KYC process again.

You also get to use a name you already know, love and trust.

This won’t be the real deal Ether, instead being a financial product that tracks the price of Ether.

This is great for people who don’t want the stress and hassle of buying actual Ether.

You can’t get hacked or have your Ether stolen, which is a huge plus for people looking to just get exposure to Ether’s volatility.

You simply open up the trading app and search for Ethereum.

If your stockbroker has an Ether product, you’ll see it appear there.

It will either be a contract for difference (CFD), which is a unit that’s linked to the price of Ether, or an exchange traded note (ETN), which is a tracker fund that follows the price of Ethereum and trades on a stock exchange.

If you’re in the UK, it will be the ETN as the government banned retail traders from buying crypto CFDs.

Both are very good and safe to buy.

Buy Ether in person

If you like to touch and smell Ether when you’re buying it, then you might want to do it in person.

You’ve got two choices here, and they both have some major drawbacks.

First up, you can opt to use an Ether ATM.

There are close to 11,000 around the globe, but you could be pretty far away from your closest one.

You’ll pay anywhere between 9% and 35% for the pleasure of using an Ether ATM, but you don’t’ need to worry about KYC.

The other option is to meet a stranger from the internet.

These types of deals are great as you can get the live market price, without paying any extra fees on top.

There’s no KYC involved so you don’t need to worry about the tax man.

However, you do need to watch out for your safety as some people are inherently evil.

People have been murdered in crypto deals gone wrong, so bring a friend with you and meet the other person in a busy area.

How can I pay for Ethereum?

When it comes to buying Ether, you’re going to be faced with a few different payment methods.

They all come with different fees and processing times, so pick your payment method carefully.

Credit/debit card

The most common way to pay for your Ether is by using your credit/debit card.

Deposits are in your account within a few seconds and virtually every exchange and stockbroker will accept them.

However, you could possibly be hit with a fee for using your card.

This is pretty normal, and you’ll be looking at paying anywhere between 0.5% and 5% on the deposit.

Withdrawals back to your card are usually free, with the exchange or stockbroker covering that fee.

If you live in a region with a banking ban on crypto, then you won’t be able to make this transaction to a crypto exchange.

You will, however, be able to make this transaction to a stockbroker.

Bank transfer

If you don’t mind waiting a little bit for your deposit to get credited to your account, then you can use a bank transfer.

These will take up to 3 working days to be processed, but are completely free.

The same goes for withdrawals to a bank account.

They will take around 3-5 working days and will be free to make.

However, just as with cards, if you’re in a country with a banking ban you won’t be able to use this payment method for crypto exchanges.

PayPal

PayPal is a fantastic option to use if you’re in a country with a banking ban and wish to use a cryptocurrency exchange to buy Ether.

You can deposit to your PayPal account, then deposit from PayPal to the cryptocurrency exchange.

More and more exchanges are opting to accept PayPal, especially now PayPal has gone crypto-friendly.

There are usually some fees involved when depositing using PayPal, but it’s a small price to pay to be able to get around banking bans.

Cash

If you’re opting to use an Ether ATM or other human to buy Ether, then cash is going to be your currency of choice.

Cash is quick, convenient and is hard to trace.

The only drawback is that you could get mugged on your way to use the Ether ATM or during your human-to-human trade.

If something goes wrong, the cash is gone forever.

There’s no way to trace it and recover it.

So, it’s advisable to take a friend with you and keep the cash away from the deal.

Once you know the other person is legitimate and isn’t going to gun you down, you can get the cash and complete the deal.

What’s the difference between buying Ethereum at an exchange versus a broker?

As we’ve discussed, there are 2 types of Ether that you can buy, each with their own pros and cons.

If you’re buying Ether from an exchange, then you are buying the real deal.

This is Ether that you can track on the blockchain, send to your own wallet and use to interact with the Ethereum world.

This comes with its own risks, in the form of hacks, scams and dodgy exchanges.

But, if you follow cyber security best practices then you’ll be fine.

On the other hand, if you buy from a stockbroker then you’re buying a financial instrument.

This will be fake Ether that is just a bit of paper saying that you own X amount of exposure to Ether.

This is great for people that don’t want to worry about getting hacked or scammed.

You can trade on leverage and buy Ether just like you would any other stock.

You can’t use it to interact with the Ethereum world, but you are safe.

This type of Ether is great for beginners and people that simply want exposure to the volatility of it.

Are profits from Ethereum trading taxable?

Whenever you buy, sell or use Ether, then it’s considered a taxable event.

This means you’ve got to pay taxes on Ethereum, if tax is applicable in your country.

There are a few exceptions to the rule, whereby you can cut your tax bill down to $0.

For the most part, however, you will pay standard capital gains tax rates.

In Australia, Germany and Malta, you don’t have to pay tax if you hold Ether for more than a year.

In countries that don’t have tax, or capital gains tax, then you also don’t have to pay.

You can learn more about tax on Ethereum with our handy guide to crypto tax!

How do I calculate Ethereum taxes?

If you’re not one of the lucky few that don’t have to pay tax, then you’re in for a bumpy ride.

You need to record every transaction, including the date, time and amount you used.

You then tot up the total profit and loss over the course of the financial year, inputting that in the necessary box on your tax return.

There are some applications that you can use that will do this for you, and they’re incredibly handy.

They do all the hard work, so you can enjoy your Ethereum experience without worrying.

The best crypto tax apps are:

• CryptoTrader.tax
• CoinTracker
• Koinly
• BitcoinTaxes

If you’re using a stockbroker to buy and trade Ethereum, tax reporting will work in the same way it does for stocks.

The site should generate a report for you at the end of the year.

If you’re unsure where to find this, reach out to the customer support team of the stockbroker that you’re using and they’ll be able to guide you on their specific site.

Is investing in Ethereum a good or bad idea?

If you’re wondering whether Ethereum is a good investment for your portfolio, then you’re in the right place.

We’ll run you through all of the details, so your portfolio spends more time looking like a Wall Street trader’s account!

Historically speaking, Ethereum is one of the best investments you can make.

If you bought Ether on the day it went live, your return on investment would be 71,138.28%.

That’s a crazy profit, so by looking at history, Ethereum is a great investment to make.

However, that’s the long-term.

In the short-term, Ether is subject to wild volatility.

Seeing daily swings of 25% isn’t uncommon.

So, if you’re looking to make quick money, Ethereum might not be right for you.

You could spend a long time in the negative region.

But that doesn’t mean you won’t be profitable in the long-term.

Historically speaking, long-term investors reap the biggest rewards in crypto.

Can you make money investing in Ethereum?

As we mentioned above, you can make good money investing in Ether.

The wild price swings can throw your portfolio into the green in a matter of seconds.

But, just as Ethereum can give, it can also take away.

The volatility knife cuts both ways, with Ethereum known to fall rather quickly.

If you time it right, or hold Ether in your portfolio for a long time, then you’ll have the best chance at making money.

If you trade emotionally and with very little experience, then you’ll end up broke in no time at all.

Ethereum is a cruel mistress, but if you treat it with respect, it will reward you well.

Ethereum has an extremely volatile exchange rate

Ethereum is a high volatility investment, which makes it both exciting and scary at the same time.

The massive price swings are derived from network performance, announcements and influential people posting on social media.

A single Tweet could send Ether to the moon, and that same Tweet could also send it crashing down.

To put that into perspective, Ether is currently down 53% since 12 May 2021, which is just over a month ago.

That’s a huge loss to swallow, but also shows you the potential for the profits if you trade wisely.

If you placed a short, you’d be laughing.

If you’re buying now, then you have the potential to capitalize on the recent dip and make good profit from the volatility.

Can I invest in Ethereum with leverage?

If you want to supercharge your Ethereum exposure, then a few platforms will allow you to trade it on leverage.

Leverage trading is incredibly risky and isn’t recommended for the average trader.

Simply put, if you’ve got $10 in your account and you trade on 100x leverage, you’ll be able to buy $1,000 worth of Ethereum.

If the price goes the wrong way, you’ll get liquidated.

This means your position is closed automatically and your balance is taken.

On the other hand, if Ethereum rises in value, you get to keep the difference in value between the buy and sell price.

It can be very lucrative, but also very dangerous at the same time.

Small downward movements can get you liquidated in a heartbeat.

Only trade on leverage if you know what you’re doing.

Most stockbrokers will either limit crypto leverage to 1x or not offer it at all.

Is Ethereum day trading possible?

You may have heard of day trading before.

It’s very popular with pro traders and people that have a lot of time on their hands.

It’s the process of opening and closing positions in a single period of trading.

This is usually done between market open and close in the stock world, but seeing as crypto is a 24/7 market, take it as a 24-hour period.

You can make good money day trading Ether if you know what you’re doing.

The idea is to place large trades in order to capitalize on small market movements.

You’ll usually trade on 5-minute charts, which isn’t recommended for longer term trading.

Just as you can call a movement correctly and cash in, you could also be left on the wrong side of the trade.

So, just as you can make good money quickly, you can also lose a lot of money in a short space of time.

Only day trade Ethereum if you know what you’re doing and have some practice at it.

Try and find a stockbroker with a demo account and practice your strategy before you go in with real money.

Is a Long-term investment in Ethereum a good idea?

Just as you can day trade Ether, you can also opt for the long-term hold.

This is by far the most boring approach, but it’s a very lucrative one.

It’s far harder to lose money, especially if you’re storing your Ether safely.

Set yourself a price target and set a price alert.

Buy your Ether and put it away until the alert is triggered.

Then you can opt to let it ride or cash out and walk away.

Since it was launched, Ether has seen a return on investment of 71,138.28%.

This shows that long-term investors can make a great deal of money, simply by doing nothing.

Ethereum VS. other cryptocurrencies – How does it stack up?

There are hundreds of thousands of cryptocurrencies out there, but what makes Ether special?

Well, it was the first programmable blockchain, coming with a suite of tools, features and functions the world had never seen before.

Unlike Bitcoin, which is designed to track transactions on a ledger, Ethereum is designed to run decentralized applications (dApps) and smart contracts.

It was the first blockchain to do this and has become wildly popular because of this.

Smart contracts and dApps are written in Ethereum’s own programming code, Solidity.

Once the smart contract or dApp is pushed to the blockchain, Ethereum will run it.

People can then interact with the contract or dApp using Ether.

The potential of Ethereum is nearly endless, only held back by a developer’s creativity.

Since it was launched, a few other blockchains have tried to emulate Ethereum.

Only VeChain has come close, even managing to swipe a few big players from the Ethereum community of users.

What does the future look like for Ethereum’s price development?

Ethereum came to life on 30 July 2015 through the world’s first initial coin offering (ICO).

At the time, it was known as a public crowdfunding campaign, but Ethereum gave rise to ICO culture.

Since the early days, Ethereum has developed considerably and is still progressing.

New features are being added all the time, and bugs are being combed out.

Since its release, Ethereum is up 68,756.82%.

To see that sort of price gain in the future, Ether would have to be worth $1,330,313.76 per coin.

This is a little unrealistic, so it’s worth looking at Ethereum like it’s fairly close to its max price.

While it could still 10x easily, that would take it to just shy of $20,000 a coin.

Any more than that and using Ethereum would be prohibitively expensive.

This in turn would reduce its use and demand.

The price would then fall to a level where it’s once again affordable to use.

What is the supply and demand for Ethereum like?

The Ethereum codebase doesn’t set any limit on the max supply.

The most that can be produced every year is capped at 18 million, but this is still an incredible amount of money being printed each year.

This inflation is designed to keep the network cost effective and usable.

If the price of Ether was to climb too high, it would become too expensive to use, rendering the network useless.

So, to keep the network chugging along, this unlimited inflation has been coded in.

Of course, more and more people are trying to use the Ethereum network as its use cases grow.

This in turn increases the demand for Ether, which pushes up the price.

Despite 18 million new Ether being created every year, the current demand with the decentralized finance (DeFi) and non-fungible token (NFT) hype is causing demand to outstrip supply.

If either of these two use cases fade away, or move over to the Binance Smart Chain, then Ethereum will likely fall in value due to a fall in demand.

Nobody knows what the future holds for Ethereum, and we could see a hard cap introduced at some point.

For the time being, however, there is no hard cap.

London hard fork

On 4 August 2021, Ethereum implemented its London hard fork.

This hard fork was a major step towards taking Ethereum towards its 2.0 goal.

Most notably, EIP-1559 was pushed live, which is aimed at reducing gas fees.

When the Ethereum developers wish to make a change to the network, they must submit an Ethereum Improvement Proposal (EIP).

These are then discussed, voted on and then implemented if the vote is successful.

EIP-1559 was co-authored by Eric Conner who is the co-founder of EthHub.

Its aim is to automate the fee bidding process, which is designed to make Ethereum more usable by the average Joe.

Before London, you had to manually set your gas fee bid, which then allowed you to skip the transaction queue.

Miners on the Proof-of-Work (PoW) system would then opt to include the transactions with higher fees as they make more money.

So, EIP-1559 changes that by implementing an automated bidding system.

The fees will still fluctuate based on the network congestion.

When there’s less network congestion, there will be lower fees.

Another feature of EIP-1559 is that a part of the gas fee will be burnt by the network.

The idea behind this is to curb the inflation rate of Ether and try to increase the value of Ether.

However, the amount being burnt is not in proportion to the amount being created with every block, meaning that it has little impact at the moment.

But, reducing the supply is always a good idea, especially when the world is hyper-focused on inflation.

EIP-1559 is the first step that Ethereum needs to take in order to become deflationary as it has come under significant fire in recent months for having no fixed supply cap.

As for reducing gas fees, it’s not really going to make any difference for the average user.

For beginners to Ethereum, London and EIP-1559 will make selecting gas fees simpler and less scary.

That’s always a good thing to see and will pay huge dividends in the future.

When will Ethereum 2.0 go live?

EIP-1559 is considered one of the final steps towards getting Ethereum ready for Ethereum 2.0.

And as a result, there’s a lot of talk of Ethereum 2.0 coming soon.

Ethereum 2.0 will add in a whole range of new features and improvements, but one feature is more anticipated than anything else.

Under Ethereum 2.0, the network will shift from a Proof-of-Work (PoW) blockchain to a Proof-of-Stake (PoS) blockchain.

This will enable the network to run more efficiently and process transactions faster.

It will also help Ethereum reduce its carbon footprint, which is something Bitcoin gets blasted for.

At the moment, there’s still no official date for Ethereum 2.0 to go live, but its expected to be live during early 2022.

There are talks of moving the timeline up and launching Ethereum 2.0 before the end of 2021, but these are unverified reports at the moment

Everyone can stake under Ethereum 2.0, which makes it possible for the average Joe to help achieve consensus and secure the network.

However, staking Ethereum 2.0 requires a minimum of 32 ETH for an individual staking position.

You can join staking pools if you have less than 32 ETH and want to stake, just like you can with PoW mining pools.

This will be the method of staking for most average Joes and has the potential to be rewarding.

There are multiple wallets that offer this support and there are also a few exchanges offering Ethereum 2.0 staking.

You can stake Etheruem 2.0 right now, so get in while it’s still new and before the price of Ethereum goes wild.

Once Ethereum 2.0 goes live, we’ll see more deflationary measures put in place and the price of Etheruem will skyrocket.

Challenges ahead for Ethereum

Energy consumption

Ethereum is currently fairly power intensive, although less so than Bitcoin.

It currently has the same carbon footprint of Sri Lanka, which is fairly significant.

However, when Ethereum 2.0 finally goes live, its carbon footprint will reduce by around 99.95%.

The performance boost and energy savings that Ethereum 2.0 provides are unmatched.

The network will run faster, be cheaper to use and will be better for the planet.

Laws and regulations

Crypto regulations are currently widespread, with none impacting Ethereum individually.

Most regulations focus on crypto as a whole, which is both good and bad for Ethereum.

On the downside, it doesn’t give Ethereum more freedom or rights that it should be afforded given its use cases.

That being said, it also doesn’t suffer from the bad press of “China bans Bitcoin”, for example.

In the long-term, it’s likely that we’ll see blockchains classified based on their uses, which would see Ethereum directly compared to competitors, rather than blockchains that do different things.

Controlling bodies

More and more regulatory bodies are cropping up in the crypto world.

While many see this as a negative for crypto, it’s a good thing, on the whole.

We’ll see less scammers and thieves entering the space as regulators will crackdown on this behavior.

All in all, more regulators will force blockchains to tighten up and offer a vastly superior product to users.

Competing currencies

Ethereum has a number of competitors, including the likes of VeChain, Hyperledger, Cord and IBM blockchain platform.

But, Ethereum was the first mover, and for that, it will likely remain as the top dog.

Ethereum 2.0 will take Ethereum to the next level, giving it longevity and performance boosts that make it far more desirable than its competitors.

While some companies have left Ethereum to work on VeChain, it’s likely that Ethereum 2.0 will bring them back to the superior platform.  

Criminals use Ethereum for money laundering 

Criminals are using non-fungible tokens (NFTs) for dodgy purposes, but that’s the case with all art.

Art in the real world is often used as a cover for less than legal transactions, so it’s to be expected.

This will never be cured, so it’s something the world has to live with.

This doesn’t impact Ethereum negatively and will likely not in the long-term.

Ethereum is a solid blockchain

It’s without a doubt that Ethereum is a great blockchain with a ton of potential.

Its currency, Ether, is well priced and its inflationary measures prevent it from becoming impossible to use.

This might be negative from an investors point of view, but if anything, it prevents wild volatility.

We’ll likely see a fair price for Ether and the price stabilize, ending volatility in the Ether world for good.

Ethereum 2.0 will be huge once that goes live and will totally revamp the blockchain.

So, if you’re looking for a cryptocurrency with potential for the future, buy Ether!