The ultimate beginner's guide to trading Ethereum Classic
Why Should You Buy Ethereum Classic?
Ethereum’s initial idea was to offer an autonomous network where ‘computer code is law’. The aim was to remove the possibility of fraud or control by others. All was moving along well, up until a single hacker exploited an error in the codebase and drained all of the investor’s money.
The majority of the investors agreed to roll back the network to make it impossible for the hacker to use the stolen money. Even though it worked, some felt this was against the initial protocol. Therefore, they continued to work on the initial idea leading to the creation of a new blockchain, Ethereum Classic. Therefore, technically, ETC is the original Ethereum. Today, ETC is the same pool of promising altcoins as the namesake ETH.
In most new coins, you have to store the coins in a universal e-wallet or the exchange’s wallet. It exposes you to the risk of higher losses in case hackers access your wallet because you will lose more than one type of crypto. Consequently, most established coins have their wallets. Ethereum Classic is one of them with its Emerald Wallet.
ETC has promised that it shall mine the last coin in 2025 when the totals supply reaches 210 million. It is unlike Ethereum which has no cap on the number of coins. As a result, Ethereum Classic seems like a more stable coin for long term investment purposes.
Another reason why many experts in the crypto industry are considering ETC is its corporation of sidechains. Sidechains are a new technology that allows interoperability between blockchains such as running Ripple on Ethereum blockchain and vice versa.
Pros and Cons of Buying Ethereum Classic
- Strong History: Ethereum Classic is not only established but also has a plan for its future. Creating a cap on the maximum coins is part of its strategy to ensure its stability in the market.
- Partnerships: ETC partnered with the developer of payment solutions, for major altcoins such as Bitcoin, Ethereum, Litecoin, Ripple and UTrust. The arrangement guarantees an increased demand for Ethereum Classic, which will improve the coin’s trading value.
- Lack of Regulation: Most of the exchanges platforms are not under any regulation increasing the risk of scamming and hacking.
- Highly Volatile: The effects of overall volatility are even more significant on individual coins such as Ethereum Classic because they are a smaller coin than the top 3.
What are the Best Payment Methods to Buy Ethereum Classic?
You have to buy ETC either through an independent exchange or peer-to-peer exchange. Payment methods vary platform to platform. We’ve outlined some of the main methods that you’re likely to make a fiat payment with;
- Buying Ethereum Classic with PayPal: Traditionally, PayPal generally don’t accept any cryptocurrency transactions, but you can purchase Ethereum Classic through a regulated broker via this method instead.
- Buying Ethereum Classic using cash: It is only possible if you find a friend, family member, or someone you trust trading Ethereum Classic for cash. It is, however, not among the most common ways of buying cryptocurrencies, nor the safest.
- Buying Ethereum Classic with a credit card: This is the most popular way of buying ETC. Nearly all exchanges that accept payment through credit cards sell ETC directly. Create an account in a credit card accepting exchange, deposit your EUR or USD from your credit card then purchase ETC.
- Other payment methods: Several exchanges accept more than one payment method. Some of the acceptable alternatives include debit cards, wire transfers, SEPA, and e-wallets such as Skrill, Neteller, and Payeer. Conduct in-depth research on these payment options before using them.
Buying Ethereum Classic in Your Country
Most countries have allowed the buying and selling of cryptocurrencies. However, certain countries have imposed a total ban on all cryptos. In such places, it is an offence to buy, sell, or mine cryptos.
If you are buying ETC to use them as a legal tender to make payments, then you might also have to take a closer look at the laws of your country. Most nations that allow buying and selling of altcoins prohibit their use as payment media.
The other concern is if you plan to pay via PayPal. PayPal prohibits transfers to other countries from accounts located in certain countries.
Is there a Difference Between Buying and Trading Ethereum Classic?
Yes. When you buy ETC, you own it and can resell it, give it out as a gift, use it to purchase other cryptos or keep it as a souvenir. Not to mention you will have to pay the entire price of the amount you buy.
Trading, on the other hand, involves speculating on the price of ETC in the exchange market. You do not have to own any coin. All you need is an investment amount which you use to leverage on the fluctuating prices.
The two also have different taxing structure. You do not pay profit gains for trading on cryptocurrencies, but you do if you make any profit through direct buying and selling of ETC.
What are the Fees Involved in Buying Ethereum Classic?
- Transaction fees: These are the fees charged for every transaction, their total value depends on the total number of operations you need to get your coins. Some exchanges allow you to buy directly using fiat currency, while in others you have to purchase Bitcoin then convert it to ETC.
- Deposit fees: These are the charges you pay when you deposit fiat currency or cryptocurrencies into an exchange. Some exchanges such as Bittrex do not charge deposit fees. The fees also vary depending on the payment method you use.
- Withdrawal fees: Nearly all exchanges charge a fee when you withdraw your coins or money from their wallets.
- Spreads and commissions: This the additional value that an exchange adds on the coin. The spread ranges between 0.2% to as high as 1% in some exchanges. Coinbase, for example, has a spread of 0.5%. Therefore, if the price of ETC is £100, it displays £100.5.
Broker Fees Vs. Exchange Fees
The transaction fee when using an exchange is higher than when using a brokerage. This because it takes at least two transactions on the exchange to buy the same amount of ETC coins that you get from a broker in a single deal.