How to Trade Ethereum in India?
Since its inception in 2015, Ethereum has received a great deal of attention. That attention has resulted in significant volatility for ether, its cryptocurrency.
What is Ethereum ?
Ethereum is a decentralized platform that runs smart contracts, applications that run exactly as programmed without any possibility of fraud or third party interference. Adaptability and flexibility are the main features of Ethereum. Ethereum’s breakthrough innovation is that it enables building these Decentralized Applications (DAPPS) on its platform, and with the introduction of smart contracts, these applications can be programmed to run exactly as intended with no possibility of censorship, fraud, or third-party interference.
- In mid-September 2022, Ethereum officially switched to a proof-of-stake algorithm because it was cheaper and more environmental friendly than a proof-of-work model.
- ETH coins production has no limit but the time it takes to process a block limits how much it can be minted each year.
What is Ether?
In the cryptocurrency world, ether is the second-largest coin by market capitalization. Ether, like other cryptocurrencies, uses a shared digital ledger where all ether transactions are recorded. It is publicly accessible, fully transparent and very difficult to alter retroactively. Ethereum is its Blockchain and is a decentralized platform that runs smart contracts. On Ethereum network, ether is used to pay for computational services, transaction fees, payments for decentralized applications and smart contracts.
Why the Merge from PoW to PoS?
There are a number of reasons for the proposed merge from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
- Better energy efficiency – there is no need to use lots of energy on proof-of-work computations
- Lower barriers to entry, reduced hardware requirements – there is no need for elite hardware to stand a chance of creating new blocks
- Reduced centralization risk – proof-of-stake should lead to more nodes securing the network
- Because of the low energy requirement less ETH issuance is required to incentivize participation
- Economic penalties for mis behaviour make 51% style attacks exponentially more costly for an attacker compared to proof-of-work
- The community can resort to social recovery of an honest chain if a 51% attack were to overcome the crypto-economic defenses.
What is a Crypto Wallet ?
Crypto wallets keep your private keys safe and accessible, allowing you to send and receive cryptocurrencies such as Bitcoin and Ethereum. Crypto wallets, unlike traditional wallets, do not store actual cash. Your assets are stored on the blockchain but can only be accessed with a private key. Your keys validate your ownership of your digital currency and allow you to conduct transactions. You lose access to your money if you lose your private keys. They come in a variety of forms, ranging from hardware wallets like Ledger (which resembles a USB stick) to mobile apps, Paper wallets to online wallets.
How to trade Ethereum?
Here’s a step-by-step guide:
- Set up a Crypto wallet.
- Create an account on Crypto exchange : Decide on the Ethereum trading platform you want to use. There are a number of different platforms out there that allow you to buy and sell ETH. Make sure to do your research and choose a reputable exchange.
- Fund your Account : The next step after having a wallet and an exchange account is to have a medium to exchange for Ethereum. For most people, this simply means depositing money into their account (fiat). The procedure is similar to opening a brokerage account in order to purchase stocks or bonds. When you fund an account, the funds will be available when you are ready to trade.
- Place your trade! When you’re ready, put in an order to buy or sell ETH at the desired price point. When orders match, trading completes.
- Whatever the exchange, you’re now positioned to start trading or buying Ethereum. And once the trades have settled, remember to withdraw the assets into the aforementioned digital wallet for safekeeping.
Is Ethereum trading safe?
Although Ethereum is less vulnerable to many of the economic and political factors that affect traditional currencies, its value is influenced by a number of distinct dynamics:
- Manipulation of the market : Due to a lack of regulation, traders may be able to influence the market by buying and selling in large quantities.
- Availability : Unlike bitcoin, there is no supply limit for ether. Despite this, many ether units will be added and lost over time, causing its availability to fluctuate.
- Wider acceptance : The ether ecosystem is constantly changing as the cryptocurrency’s adoption grows among both independent investors and those in industry.
- Government Regulation : Governments are still adjusting to cryptocurrencies, with considerations for new regulations and supervision mechanisms.
- Technical Developments : The integration of Ether into payment systems, crowdfunding platforms, and other platforms may raise its profile, while trust in traditional systems may begin to erode.
- Media Coverage : Negative press, particularly about security flaws and hacks, can have an impact on public perception of ether’s value.
Popular Ethereum trading platforms