Warrior Trading Blog

Ethereum Definition: Day Trading Terminology

Ethereum photo

Ethereum is one of the world’s most popular cryptocurrency platforms, with a special focus on creating a universal distributed digital system for transactions.

Bitcoin Vs Ethereum

Ethereum is often touted as an improvement upon the original cryptocurrency, Bitcoin. However, it is more accurate to say that Ethereum is a 2nd generation cryptocurrency with a special focus on using blockchain technology to facilitate transactions of all sorts.

Ethereum is a cryptocurrency in the traditional sense, but also serves as a software platform for the creation and distribution of applications, facilitated by the use of Ethereum-based ‘Smart Contracts’.

World Computer Vs Client-Server

The core idea behind Ethereum is the overthrow of the existing client-server model of the Internet and its replacement with a ‘world computer’ powered by Ethereum and similar platforms.

Currently the vast majority of digital interactions take place on servers that are hosted and, critically, controlled by a company or other entity. This means that your personal data, the records of your transactions and your access to applications is all centralized in various manipulable servers, which makes them vulnerable to theft, fraud or a denial of access.

By decentralizing the storage of data, Ethereum aims to make all digital interactions open, transparent and free from outside interference. If transactions are not stored in one centralized location, they cannot be controlled by the people who have access to that location, legal or otherwise.

Ethereum and Trading

Ethereum is one of the most popular and most traded cryptocurrencies, and its value has soared since its initial release.

Day traders looking to trade cryptocurrencies will find that Ethereum offers trading volumes that rival that of Bitcoin, and whose price action produces actionable trading opportunities that traditional day trading strategies are well-suited to exploit.

However, day traders new to cryptocurrency trading should understand that trading Ethereum does have some different features compared to trading in equities or other traditional financial assets that need to be learned before live trading.

Day traders should learn the mechanics of cryptocurrency wallets and exchanges, as well as the different kinds of news and events that tend to drive cryptocurrency prices.

That said, Ethereum is a stable cryptocurrency with strong future prospects, so it is considered among the safest cryptocurrencies for taking long positions in. Unlike Bitcoin, there are currently no Ethereum futures available for trading, so it is not possible to take short positions in Ethereum by any official or regulated means.

Final Thoughts

Ethereum is often touted as a rival for Bitcoin and an improvement in terms of cryptocurrencies as a form of universal transaction. Ethereum’s Smart Contract system is unarguably a 2nd generation use of blockchain technology in the facilitation of distributed transactions.

Day traders looking to expand their trading from traditional assets into cryptocurrencies would be well-served by trading in Ethereum. Ethereum offers relatively stable prices and a promising future as a popular cryptocurrency for digital transactions.

However, day traders interested in trading Ethereum should be aware that there are some differences from trading in traditional assets that need to be understood before live trading.