How to invest in Ethereum in India
Ethereum has become a popular cryptocurrency alternative to Bitcoin over the last year. However, unlike Bitcoin and rival currency Litecoin, Ethereum has been adopted by many companies and startups as a way to transact (and more).
In the cryptocurrency wars, I like to view Ethereum as the diamond of the currencies – it has both an intrinsic value and an industrial value. Compare this to Bitcoin, which operates like gold – not much industrial value, but people buy it and sell it based on its intrinsic value to the holder.
Given the popularity of Ethereum, many people are curious about what it actually is, how it’s different than Bitcoin, and how to invest in it. It’s also important to note the risks of investing, and the potential to mine it and create your own wealth of Ether (the actual monetary unit of Ethereum).
What Is Ethereum?
In the crypto’s own words, Ethereum is “a global, decentralized platform for money and new kinds of applications,” with thousands of games and financial apps running on top of the Ethereum blockchain. This crypto is so popular that even other crypto coins run on its network.
Central to Ethereum is its blockchain network. A blockchain is a decentralized, distributed public ledger where transactions are verified and recorded.
It’s distributed in the sense that everyone participating in the Ethereum network holds an identical copy of this ledger, letting them see all past transactions. It’s decentralized in that the network isn’t operated or managed by any centralized entity—instead, it’s managed by all of the distributed ledger holders.
Benefits of building on Ethereum
Ethereum offers an extremely flexible platform on which to build decentralized applications using the native Solidity scripting language and Ethereum Virtual Machine. Decentralized application developers who deploy smart contracts on Ethereum benefit from the rich ecosystem of developer tooling and established best practices that have come with the maturity of the protocol. This maturity also extends into the quality of user experience for the average user of Ethereum applications, with wallets like MetaMask, Argent, Rainbow, and more offering simple interfaces through which to interact with the Ethereum blockchain and smart contracts deployed there. Ethereum’s large user base encourages developers to deploy their applications on the network, which further reinforces Ethereum as the primary home for decentralized applications like DeFi and NFTs. In the future, the backward-compatible Ethereum 2.0 protocol, currently under development, will provide a more scalable network on which to build decentralized applications that require higher transaction throughput.
How does Ethereum work?
Like Bitcoin, the Ethereum network exists on thousands of computers worldwide, thanks to users participating as “nodes,” rather than a centralized server. This makes the network decentralized and highly immune to attacks, and essentially unable to go down as a result. If one computer goes down, it doesn’t matter because thousands of others are holding the network up.
Ethereum is essentially a single decentralized system that runs a computer called the Ethereum Virtual Machine (EVM). Each node holds a copy of that computer, meaning that any interactions must be verified so everyone can update their copy.
Network interactions are otherwise considered “transactions” and are stored within blocks on the Ethereum blockchain. Miners validate these blocks before committing them to the network and acting as transaction history or a digital ledger. Mining to verify transactions is known as a proof-of-work (PoW) consensus method. Each block has a unique 64-digit code identifying it. Miners commit their computer power to find that code, proving that it’s unique. Their computer power is “proof” of that work, and miners are rewarded in ETH for their efforts.
How To Buy Ethereum (ETH)
If you’re interested in investing in Ethereum, and specifically Ether, you need a digital wallet connected to a cryptocurrency exchange. Ethereum doesn’t trade on any major stock platform. You can’t go to your online discount broker and buy Ethereum. You have to convert it into your wallet.
We recommend using Coinbase as a digital wallet because it’s incredibly easy to use, allows you to invest in Bitcoin and Litecoin as well, and they will give you a bonus for signing up. If you sign up with this link you’ll get a $5 Bitcoin bonus if you open a new account and make your first trade.
How to invest in Ethereum in India
Investing in Ethereum in India involves a few key steps:
Step 1: Choose a cryptocurrency exchange To buy and sell Ethereum in India, you will need to use a cryptocurrency exchange that supports Ethereum trading. Some popular cryptocurrency exchanges in India that support Ethereum trading include WazirX, CoinDCX, and Zebpay. Choose an exchange that is reputable, secure, and regulated.
Step 2: Register and complete the verification process Once you have chosen an exchange, you will need to register an account and complete the verification process. This typically involves providing your personal information, such as your name, address, and ID proof.
Step 3: Add funds to your account After completing the verification process, you will need to add funds to your account using a bank transfer, UPI, or a debit/credit card. The available funding options may vary depending on the exchange.
Step 4: Buy Ethereum Once you have added funds to your account, you can use them to buy Ethereum. On the exchange, look for the Ethereum trading pair (for example, INR/ETH or BTC/ETH) and enter the amount of Ethereum you want to buy. Review the transaction details and confirm the purchase.
Step 5: Store your Ethereum safely After buying Ethereum, it is important to store it safely in a digital wallet. You can choose a hardware wallet, software wallet, or web wallet. A hardware wallet is the most secure option as it stores your private keys offline.
Step 6: Monitor your investment As with any investment, it is important to monitor the price of Ethereum and its market trends. You can use various tools and resources to track the performance of Ethereum, such as price charts, news sources, and social media platforms.
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