First, Ethereum is not actually the name of a cryptocurrency Rather, it is the name of a specific blockchain, a decentralized distributed electronic ledger that tracks all transactions in a public format and a programming language to run and develop on that blockchain

Of course, Bitcoin also uses blockchain, but the Ethereum blockchain is more sophisticated and can be used to run applications

Ether, also known by the ticker symbol ETH, is a cryptocurrency "token" derived from the Ethereum blockchain The Ethereum blockchain is also used to validate NFTs, business contracts, and other financial instruments, just one of hundreds of applications possible for the Ethereum blockchain

Ether is the second-largest cryptocurrency by market capitalization after Bitcoin and is among the top cryptocurrencies by value; according to Investopedia, the two are the only cryptocurrencies with futures trading on the Chicago Mercantile Exchange As of this writing on May 20, 2021, one Ether token is worth approximately $2,650

Ether is not only a tradable cryptocurrency token, but also a payment method for performing transactions and applications on the Ethereum blockchain network The transaction price of Ether is called "gas" The more computing power an Ethereum transaction uses, the higher the price of "gas"

Currently, ether tokens are "mined" by "work" performed by a computer solving a mathematical problem, much like bitcoin However, the operators of ethereum are moving the entire process to a "proof-of-stake" model rather than a "proof-of-work" model (13]

The change, called Ethereum 20, was expected to take place by 2024, but according to a recent blog post by the Ethereum Foundation, testing is already underway and will take place "in the coming months" Its future cryptocurrency token, ETH2, can already be tracked on Coinbase

Unlike Bitcoin, which is capped at 21 million tokens (and will not be reached for more than 100 years), the supply of ether tokens is indefinite; while ETH tokens cost much less than Bitcoin, they are easier to mine New blocks on the ethereum blockchain are created several times per minute, compared to several times per hour for the bitcoin blockchain

A related cryptocurrency token is Ethereum Classic (ETC) It is derived from Ethereum Classic, a "fork" of the original Ethereum blockchain created in 2016 after $50 million of Ether was stolen from the Ethereum-based smart contract platform

The operators of Ethereum chose to "reverse" the theft and erase it from the blockchain ledger, but the operators of Ethereum Classic acknowledged the theft and proceeded; not to be confused with ETH and ETC As of this writing, ETH is worth about US$66 per token

First of all, I should warn anyone thinking of buying ETH or any other cryptocurrency to think carefully before doing so Cryptocurrencies are far more volatile than traditional stocks, as yesterday's (May 19) big selloff showed Ethereum has suffered multiple major rallies and subsequent declines over the past few months and years (see below for more details), and there is absolutely no guarantee that buying now will lead to profits [Calculate how much you would lose if it fell 20%, 50%, or more overnight, and don't assume that it will only go up in value

As for purchasing Ether tokens, you can do so through cryptocurrency exchanges such as Binance, Bitfinex, Coinbase, and Gemini (The Ethereum website has some tips) On the exchange of your choice, you need to create an account, including identification

Then add real money, such as dollars, pounds, or euros, to your account and withdraw funds from it to purchase cryptocurrency tokens If you already own some cryptocurrency, you can add that as well Once this process is complete, you can purchase Ether or other cryptocurrency tokens and watch your holdings increase or decrease, as the case may be

Once you have accumulated enough Ether to your satisfaction, you can withdraw it to a third-party managed cryptocurrency savings account or use one of the best crypto wallets You can also cash out your Ether holdings by selling them for US dollars, other government bonds, or other cryptocurrencies

Ether has been on an upward trajectory, rising from about US$1,900 to a record high of over US$4,150 in the past few weeks However, it has fallen steadily from last week's highs and plunged yesterday (May 19), along with the rest of the market It is currently trading around US$2,650

And it is worth noting that this has happened before Ether's previous peak was in January 2018 at about US$1,400; it fell to about US$400 within three months, then recovered a bit before bottoming out again in December 2018 at about US$80 Those who purchased Ether at the peak would have lost nearly 95% of their holdings

Several top companies and financial firms, including Microsoft, JP Morgan Chase, Intel, and MasterCard, have invested heavily in ethereum because of its blockchain and programming language, which can be used for many things besides getting rich quick

This is a good thing, as the foundation of the Ether currency is a good example of other cryptocurrencies with a short shelf life (cough, Dogecoin