Some of the top dogs in the cryptocurrency ranking range in the literally hundreds if not thousands of dollars in value. However, so does the number of cryptocurrencies that according to some estimates happen to be up to 2000 different types.

Though by all estimates the vast majority of people have no idea what cryptocurrencies are, how they work and what use they have. Just a fraction of the people know of only one cryptocurrency, i.e., bitcoin thanks to the media.

It is really a shame that with so many cryptocurrencies and the way they are revolutionizing commerce not many people know about it. Also, Bitcoin is just one of the many cryptocurrencies albeit the biggest one too but not necessarily the best. The second dominant cryptocurrency is Ehtereum but which only has 20% of bitcoin’s market share making it significantly smaller.

What type of cryptocurrency is Ethereum?

Ethereum is one of the newer types of cryptocurrencies which mainly simplifies the mining or creation. Plus, it speeds up order processing and addresses issues like limits, growth figures, etc. These features help ethereum distinguish itself from other currencies.

Ethereum like Bitcoin is also based on blockchain technology which is a fancy term used for a decentralized database which is encrypted hence preventing unauthorized access and tampering.

Smart contracts are used to for the smooth processing of exchange, or it can also be used to handle decentralized tasks like running programming code across a network which prevents data manipulation.

Ethereum is by definition and in the real sense a virtual currency because the blockchain is usable in other aspects of the computer network. The official ethereum website has a lot of information about the currency and how it works. Plus, it offers basic yet updated statics about it like its mining process, rewards, quantity and value

The Advantages of Ethereum

Perhaps one of the biggest advantage of using ethereum is the fact that it has a well-designed system which has also been responsible for the formation of the Enterprise Ethereum Alliance. The EEA as it is called includes member organizations like JP Morgan Chase and Microsoft.

Ethereum is a well respected and trusted cryptocurrency in the community and one of the reasons why it kicked off to such a great start. As a matter of fact, some estimate that the currency is so well designed that it could easily overtake bitcoin in the next few years. However, already is the second most valuable cryptocurrency.

One of the other reasons for the ethereum boom and its continuing success is its use by major ICOs. Almost all ICOs or Initial Coin Offerings accept etherium as their primary source of funding.

How is ethereum traded

Ethereum is like any other cryptocurrency, and so it is subject to the same market conditions as many others out there, not to mention the regulation and rules. In addition to technically analyzing etherium you also need to consider the EEA which stands for Member Statements on Ethereum and the addition of new members. All of which contributes to significant price volatility.

Unlike Monero and Bitcoin ethereum is not an anonymous currency. That means you need to constantly keep yourself updated with the latest developments by Gavin Wood and Vitalik Buterin. What they have to say and do, will and does impact the price of this currency.

Unless your intention is to use ethereum to purchase services and goods, it can also be traded like Forex or via cryptocurrency exchanges. Most if not all brokers will show the current ethereum exchange rate with a corresponding US dollar value.

If you have a solid trading strategy, then that will work perfectly with ethereum. Though you may want to go through the historical data before making any trading speculation.

Using Ethereum for binary options

Ethereum can also be traded as binary options like other currencies. Currently, this type of binary options trading is being offered by BD Swiss and IQ Option. You can find out more about trading these and other cryptocurrencies by visiting these brokers’ websites.