The cryptocurrency Ethereum, or more correctly, Ether, is one of the most popular types available. Cryptocurrencies are digital currencies acting as a form of payment for any goods and services that accept them. They use decentralized blockchain technology that manages and records transactions across many computers.
- Cryptocurrency has grown in popularity since its inception
- Ethereum is the second most popular crypto in the world
- The Ethereum platform can disrupt industries like banking
The appeal of cryptocurrency, Ethereum, Bitcoin, etc., is that there is a great belief that they will continue to gain value in the future. Like any investment, there is a good deal of risk involved, with gains and losses possible. But many are willing to take that risk, as the potential is that the acceptance of cryptocurrency will continue to grow in the future.
The Basics Of Ether
Ethereum, a cryptocurrency, was launched back in 2015. It is a decentralized software platform that enables Smart Contacts and Distributed Applications (ĐApps) to be built and run without any downtime, fraud, control or interference from a third party. The applications on Ethereum are run on its platform-specific cryptographic token, known as ether. Ether is like a vehicle for moving around on the Ethereum platform, and is sought by mostly developers who want to develop and run applications inside Ethereum. According to Ethereum, it can codify, decentralize, secure and trade just about anything.
As the second most popular cryptocurrency, Ether offers opportunities in much the same manner as Bitcoin, with the possible benefit of it not being quite as well-known. Cryptocurrencies, such as Ethereum, are generally as secure as possessing physical precious metal.
Cryptocurrency, Ethereum And The Future
Ethereum is about $1200, as of January 21, 2021, a phenomenal rise in the amount offered for Ether since its origins over five years ago. Much of the appeal of the cryptocurrency craze is that of being able to get in on the beginning of something that can generate immense wealth in the future. With prices soaring and lowering, volatility is a problem. Will prices continue to rise? How will cryptos function in the future? The potential exists for amazing profits if enough of the general public believes in the concept of the cryptocurrency idea.
At the moment, there are specific investors and those with an eye as early-adopters primarily interested in Ethereum, Bitcoin, and other possibilities of blockchain technology. And while many are beginning to learn more about these topics, the “man-on-the-street” isn’t fully knowledgeable about the potentialities.
Ethereum And Retirement
The Internal Revenue Service of the United States of America has decreed that you cannot purchase life insurance or collectibles, nor can you perform direct and indirect prohibited transactions with retirement funds, but beyond that, there is no prohibition. Therefore cryptocurrency can be held by retirement funds in a Self-Directed IRA, along with other cryptocurrencies and alternative investments like real estate or traditional investments like stocks or bonds.
Cryptocurrencies, such as Ethereum, are generally as secure as possessing physical precious metal. Just like holding a gold bar, a person who takes reasonable precautions will be safe from having their personal cache stolen by hackers.
A bitcoin wallet can be stored online, like a cloud service, or offline in a hard drive or USB stick. The offline method is more hacker-resistant and absolutely recommended for anyone who owns more than 1 or 2 bitcoins but it is not without risk. Your Self-Directed IRA LLC should have a separate wallet, either online or offline, for the cryptocurrencies owned by the Self-Directed IRA LLC. The IRA LLC owned wallet should not hold any cryptos owned with non-retirement funds. In other words, a bitcoin wallet should not hold retirement accounts owned and personally owned cryptos.
More than hacker intrusion, the real risk of loss with bitcoins revolves around not backing up the wallet with a fail-safe copy. There is an important .dat file that is updated every time you receive or send bitcoins, so this .dat file should be copied and stored as a duplicate backup every day you do bitcoin transactions. Far too many news stories are coming out these days about investors losing the thumb drive or password that holds their retirement plan -it’s important beyond measure to reinforce the safety and security of your property.