What is Ethereum?
Ethereum is a decentralised open-source blockchain featuring smart-contract functionality. Ether is the cryptocurrency generated by Ethereum miners as a reward for computations performed to secure the blockchain.
The project’s goal is to democratise the internet by creating a ‘world computer’. It seeks to replace the traditional model of servers or clouds hosting data with a new proposition – ‘nodes’ provided by volunteers. The creators of Ethereum aim to introduce an alternative solution for data and apps that isn’t dependent on big technology firms.
What determines the price of Ethereum?
The market through the forces of supply and demand. Simply put, like most assets, the price of Ethereum is based on how much people are willing to pay for it. Since Ethereum is stored and transferred online, the price is determined globally. It should be the same wherever you are. It can differ slightly from exchange to exchange, but big variations can’t arise, since traders would quickly arbitrage out any gap.
How many Ether are there?
The total supply of Ether was approximately 110.5 million as at mid-April 2020. In 2017, mining created 9.2 million new Ether, which led to a 10% increase in total supply.
There is no hard cap on the total supply of Ethereum, unlike Bitcoin, which is limited to 21 million. Ethereum has opted not to set an upper limit. This has raised concerns in the industry about inflation in the Ethereum ecosystem from inception. Advocates point out that the rate of supply of Ether will decline over time.
What the bears are saying
- Ethereum is slow: Like many cryptocurrencies such as Bitcoin, Ethereum has struggled with speed. Its proof of work mechanism has made the network congested and slower.
- Is it already out of date? Ethereum has an unfortunate disadvantage: it was one of the first. In recent years, new ICOs and cryptocurrencies have learned from Ethereum's teething problems and executed ‘improved’ variations of the network. This is a threat of unknowable magnitude, but well-backed upstarts, such as EOS, Tron, and others, - can potentially build better networks and scale greater heights
What the bulls are saying
- Regulation: The SEC ruled in June 2018 that Ethereum is not a security. This is a big deal and helps to legitimise the Ethereum network in the industry where regulation remains nascent. The ruling made clear that the platform does not come under the scope of US securities regulation, which dispelled a dark cloud.
- Community: This is what powers most projects in the cryptocurrency industry - and they don’t come bigger than the Ethereum community.
How to buy ETH
With Uphold, you can set up an account, verify your identity and buy crypto with ease.
Here is how:
1. Go to Uphold.com and click ‘Sign up’
2. Enter your email address, phone number and your personal details
3. Tell us how you plan to use Uphold and provide some basic financial information (e.g., employment status and source of funds)
4. Verify your identity by providing an ID document and taking a ‘selfie’
… and you’re off to the races!
Just start trading.
You should be aware that the risk of loss in trading or holding cryptoassets can be very high. As with any asset, the value of cryptoassets can go up or down and there can be a substantial risk that you lose all your money buying, selling, holding or investing in cryptoassets. Our cryptoasset services are not within the scope of the UK Financial Ombudsman Service and your cryptoassets are not subject to protection under the UK Financial Services Compensation Scheme. You should carefully consider whether trading or holding cryptoassets is suitable for you in light of your financial condition.
Uphold Europe Limited (FRN: 900577) is registered under the Financial Conduct Authority’s Temporary Registration Regime for cryptoasset firms and complies with the Money Laundering, Terrorist Financing and Transfer for Funds (Information on the Payer) Regulations 2017 as amended. The purchase, sale and custody of cryptoassets is regulated by the FCA for anti-money laundering purposes but this does not indicate any approval by the FCA of Uphold’s cryptoasset activities. Uphold Europe Limited is also an EMD agent of Optimus Cards UK Limited which is authorised and regulated by the Financial Conduct Authority to issue e-money (FRN: 902034) pursuant to the Electronic Money Regulations 2011.
The e-money services are regulated by the Financial Conduct Authority. E-money is not a deposit or investment account which means that your e-money will not be protected by the Financial Services Compensation Scheme. User funds will be held in a designated safekeeping account with a regulated financial institution. E-money will not earn any interest. Additional Risk Warning in Uphold’s Terms & Conditions.
This content is correct as of September 2021
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