What is Ethereum ETH?

Ethereum’s native currency, Ether (or ETH), powers the decentralised platform created by Vitalik Buterin, which launched in 2015. Ether is a digital currency used to facilitate transactions and smart contract executions on the Ethereum network or blockchain. It’s also a popular cryptocurrency to grow and diversify portfolios. When people talk about “Ethereum”, they are really referring to the cryptocurrency Ether. 

Cryptocurrencies can make up a small or even significant portion of a well-diversified portfolio, depending on a person’s knowledge and risk tolerance. Because Ethereum is second only to Bitcoin in terms of crypto capitalisation, with a US Dollar value of approximately USD 228 billion at the time of writing, it often forms a significant part of a cryptocurrency portfolio. For insight, take a look at the following graph, illustrating Ethereum’s growth in value against the US Dollar since 2015. The price of Ethereum has grown substantially over the long term, though there is an expected degree of volatility when buying cryptocurrencies.

Ethereum is often described as a decentralised world computer because it allows developers to create applications that run on a global network of computers. Here are some key reasons in favour of Ethereum as an appealing cryptocurrency for a crypto portfolio:

• Supports smart contracts: These self-executing contracts contain the terms of the agreement written into the code and can run off the Ethereum blockchain, hence accruing fees for the blockchain. They limit the need for intermediaries and can enable tamper-proof transactions. 
• Supports decentralised applications (dApps): These applications can run on the Ethereum blockchain. dApps have many use cases, including finance (DeFi), gaming, supply chains, and more. Ethereum allows the growth of the dApp ecosystem. 
• Platform for NFTs (Non-Fungible Tokens): Ethereum is the main platform for creating and trading NFTs, which are unique digital assets representing ownership of art, collectibles, and more. 

Proof of Work (PoW) and Proof of Stake (PoS) are consensus mechanisms in blockchains. This means they are protocols used in blockchain technology to achieve agreement among participants in the network regarding the validity of transactions. 

PoW, pioneered by Bitcoin, employs mining to achieve the goal of securing and verifying the blockchain. This is achieved by virtual miners around the world who race to be the first to solve a math puzzle. The winner can update the blockchain with the latest verified transactions and is rewarded with a predetermined amount of Bitcoin. The Bitcoin blockchain provides a high level of security and decentralisation, making Bitcoin a valuable asset. However, some critics maintain that this consensus mechanism uses too much power and is too slow and expensive. 

PoS, the more energy-efficient and speedier alternative, uses validators to create new blocks and validate transactions. Validators are chosen based on the amount of cryptocurrency they hold and how much they are willing to “stake” as collateral. Although PoS reduces energy consumption, it is criticised by some for not being sufficiently decentralised. 

It’s important to note that the Bitcoin blockchain primarily handles incoming and outgoing Bitcoin transactions, similar to a large chequebook. The Ethereum blockchain, however, processes a much wider range of transactions, including DeFi transactions, smart contracts and NFT minting and sales. 

Yes, Xapo Bank provides its members with access to buy, hold and sell Ethereum*. While many banks around the world are worried about the popularity of cryptocurrencies and the chance they could usurp some of the bank’s functions and revenue streams, Xapo Bank embraces the opportunity to increase its crypto offerings. It is the first regulated bank in the world to give access to such a service. To execute a purchase, select the ‘Wealth’ tab and navigate to the cryptocurrencies section. You will be able to see the available cryptocurrencies. 

Yes, you can.

Xapo Bank is working to enable this feature. It will be available soon.

You can sell your Ethereum quickly and easily into US Dollars from the Xapo Bank app.

You’ve probably heard the well-used crypto slogan, ‘Not your keys, not your coins’. Crypto holders are encouraged to self-custody their assets in either a cold wallet (not connected to the internet), or an internet-enabled hot wallet like Metamask. However, self-custody wallets, where you own your own private keys, come with a host of issues. Over $100 billion worth of cryptocurrency stored in self-custody wallets has been lost forever due to forgotten seed phrases or faulty devices. Is the digital equivalent of keeping your money under the mattress really the most secure way to keep your cryptocurrency safe? It’s simpler and more secure to store your crypto assets with Xapo Bank, a licensed Virtual Asset Service Provider (VASP) by the Gibraltar Financial Services Commission. We follow strict security rules for the assets we protect using ultra-secure MPC wallets. 

The fee for buying and selling Ethereum is a flat 1% for all order types. For example, if you buy USD 100, your fee will be USD 1 upon purchase. If you sell the cryptocurrency for USD 100, your fee will again be USD 1.

In addition, you can buy or sell unlimited times per day. The minimum USD amount for purchase is USD 10 and the minimum USD amount for selling is USD 1.

The market is open 24/7. Xapo Bank members can access, monitor and rebalance their crypto portfolio anytime.

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*Capital at risk. This information is not investment advice. Crypto asset values can go up as well as down and you could lose all the money you invest. This is a high‑risk investment and you are not protected if it loses all or some of its value. Past performance is not indicative of future results.