Are you considering buying Ethereum in 2023 but not sure where to start? Ethereum is a decentralized platform that runs smart contracts and has its cryptocurrency, Ether, which is used to pay for the execution of these contracts and other services on the Ethereum network.
While Ethereum can be a potentially lucrative investment, it is essential to understand the risks and potential dangers associated with buying and using it. This blog post will provide seven safety tips before buying Ethereum in 2023.
From using a secure wallet to being cautious of phishing attacks, these tips will help you protect yourself and your funds when buying and using Ethereum. So, if you’re new to cryptocurrencies and want to ensure you’re taking all the necessary precautions, keep reading for our Ethereum price prediction and top safety tips for beginners before buying Ethereum in 2023.
How Does Ethereum Work?
Ethereum is a decentralized platform that employs smart contracts. Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. These smart contracts are written in Solidity programming language and run on the Ethereum Virtual Machine (EVM). This runtime environment executes the code on the Ethereum network.
The Ethereum network consists of a decentralized network of computers, called nodes, that work together to validate and record transactions on the Ethereum blockchain. These nodes’ transactions on the Ethereum network are processed and verified through mining.
Miners use their computers to solve complex mathematical problems, and in return, they are rewarded with a small amount of Ethereum. This process helps secure the network by ensuring that the transactions added to the blockchain are legitimate.
Ethereum also has its cryptocurrency, called Ether (ETH). Ether is used to pay for transaction fees and services on the Ethereum network, such as the execution of smart contracts. It can also be bought and sold on cryptocurrency exchanges like any other cryptocurrency.
7 Safety Tips for Beginners Before Buy Ethereum
As a beginner, it is essential to understand the risks and potential dangers associated with buying and using Ethereum. Here are seven safety tips to consider before buying Ethereum in 2023:
- Use a secure wallet
It is essential to store your Ethereum in a secure wallet, such as a hardware or paper wallet. A hardware wallet is a physical device that stores your Ethereum offline, making it immune to hacking attempts. A paper wallet is a piece of paper with your Ethereum address and private key printed on it. Both options provide an extra layer of security compared to storing your Ethereum on an exchange or a web wallet.
- Use a reputable exchange
When buying Ethereum, make sure to use a reputable exchange. Research the exchange’s history and reputation to ensure that it has a track record of security and reliability. Avoid using exchanges that have a history of hacks or security breaches.
- Enable two-factor authentication
Two-factor authentication (2FA) adds an extra layer of security to your account by requiring you to enter a code sent to your phone or email and your password when logging in or making a transaction. This helps protect your account from unauthorized access.
- Use strong, unique passwords
Using strong, unique passwords for all your online accounts, including your Ethereum wallet and exchange account, is essential. Avoid using a similar password for multiple accounts, and consider using a password manager to generate and store secure passwords.
- Be cautious of phishing attacks
Phishing attacks are a standard method used by hackers to trick people into giving away their personal information or login credentials. Be wary of emails or websites asking for your login information or redirecting you to a fake login page. Always double-check the URL of the website you are on before entering any sensitive information.
- Avoid overloading your wallet
It is generally safer to store smaller amounts of Ethereum in your wallet and keep most of your funds on an exchange or in a more secure location. Therefore, you will not lose all your funds if your wallet is hacked or lost.
- Keep your software up to date
It is essential to keep your Ethereum wallet and other related software up to date with the latest security patches and updates. This will help protect you from potential vulnerabilities and keep your funds secure.
Factors Affecting Ethereum – Will Ethereum be Profitable in 2023?
It is impossible to predict whether buying Ethereum will be profitable in 2023 or any other time. The value of cryptocurrencies, including Ethereum, can fluctuate significantly over time and can be influenced by various factors.
Ethereum has seen a significant drop in value, with a cumulative drawdown of about 80% since its November 2021 all-time high of $4,891. It is currently trading at around $1,209.84 as of December 2022. The fall has been primarily attributed to rising inflation, central bank interest rate hikes, and the possibility of a global recession, which have contributed to a negative outlook for stocks and cryptocurrencies.
The network upgrade to proof-of-stake, which took place in September 2022, could not boost ETH prices amid a general decline in cryptocurrency sentiment. In the short term, the Ethereum price prediction is neutral to bearish, given the current macroeconomic conditions and the potential for further reductions. It may not be a good time to buy Ethereum if you have a short-term investment horizon of two to four weeks.
Furthermore, the FTX crisis has caused increased volatility in Ethereum and Bitcoin, with both experiencing jumps in their 30-day volatility. Bitcoin’s volatility has increased from 26% at the beginning of the month to 70%, while Ethereum’s has jumped from 43% to 102%. This high level of volatility is expected to continue as the situation with FTX develops.
Miners are also being affected by the downturn in the cryptocurrency market, with declining prices leading them to reassess the profitability of their mining rigs. In addition, rising energy costs are making it more difficult for miners to turn a profit. As a result, hash rates and miner revenues have decreased significantly since the start of June.
The Bottom Line
Following these safety tips can help protect yourself and your funds when buying and using Ethereum. Always be cautious and do your due diligence regarding your financial security. It is essential to research and consider the risks before investing in Ethereum or any other cryptocurrency. Cryptocurrency investing carries a high level of risk and may not be suitable for all investors. You should never invest more than you can afford to lose.
