EOS is a cryptocurrency that runs on the EOS.IO blockchain. Introduced in 2018, EOS delivers a smart contract platform, which claims to completely eliminate transaction fees. It is also extremely fast and is capable of conducting millions of transactions per second.
One billion EOS tokens were distributed as part of its initial coin offering. The developers were hugely successful in raising $4 billion during this process, with EOS becoming a high profile name as a result of this huge investment. This guide will discuss how to invest in EOS and it will also explain some of the ways in which you can go about it.
There are a variety of ways to invest in EOS, but here are four of the most prominent and commonly used. All these approaches can be used with or without leverage.
Firstly, it is possible to buy EOS through the many online crypto exchanges. Because of the nature of the cryptocurrency, virtually all buying and selling it takes place on the Internet, and EOS is no exception.
While most exchanges have storage provisions built into them, it is generally advisable to download a hardware wallet solution when trading EOS and other cryptocurrencies. For top security and, if you hodl for long-term investments, then you should use hardware wallets.
However, if you are a user who performs daily transactions, you should use a desktop or mobile wallet; though they are not as secure as a hardware wallets. Software wallets are most convenient for daily transactions.
Wallets are classified as hot and cold depending on whether they are connected to the internet or not. Cold wallets are considered a comparatively safer option as they do not require a constant internet connection and are thus suitable for long term investors.
Some of the hardware wallets that are compatible with the EOS include the following:
To trade via a cryptocurrency exchange, budding investors will first need to register. This typically involves confirming one’s identity, which is usually achieved via government identity documentation and proof of address.
Most digital exchanges online are compatible with Know Your Customer (KYC) regulation, which refers to the process of verifying the identity of your customers, in the way that regulated bank customer identity verification practices are currently conducted. This serves the purpose of assessing and monitoring EOS risk.
It is not possible to purchase fractions of EOS via an exchange, as the price of EOS simply isn’t high enough. When exchange fees are taken into consideration, it would also prove to be largely pointless. Examples of coins that do allow fractional purchases are Bitcoin and Ethereum.
Another way of trading EOS is via a broker, which is usually conducted online as well. The popularity of internet trading has had a massive impact on the availability of brokers, and there is now a wide variety of choice in this area.
Online crypto brokers are effectively intermediaries, who conduct trades on behalf of an investor, also charging fees for this privilege. They are expected to be experts in the market, and also knowledgeable about its mechanisms.
As trading cryptocurrencies can be rather complex, brokers are certainly useful, particularly for those entering the market for the first time. Brokers also offer a wide variety of other services, meaning that they can deliver additional functionality that isn’t necessarily possible with an exchange.
This makes brokers an excellent option for those purchasing EOS for the first time. But it’s also important to ensure the credentials of your broker before committing, and also that you can access the platform associated with the broker via both desktop and mobile applications.
Another option for cryptocurrency traders is to utilise ETFs (Exchange Traded Funds), which have commonly been used in the traditional stock market. ETF contracts make it possible to bind together a diverse range of cryptocurrencies into a singular tradable asset, offering investors increased flexibility.
Cryptocurrency ETFs effectively work the same way as ETF contracts related to other assets. They are subject to changes in price throughout the trading day, as investors purchase and sell tokens. ETFs are generally seen as an excellent way for new investors to enter the currency markets, and are already available in several countries.
There are a variety of factors that must be taken into consideration before investing in EOS. The cryptocurrency market place is undoubtedly one that offers huge opportunities, but there are significant challenges associated with the niche as well. So in the following sections, we will discuss some of the issues that are particularly important before embarking on your EOS investment.
There are no fees to send or receive EOS. Instead, the protocol requires EOS to use resources like RAM, CPU, and network bandwidth. It also rewards the entities that run the network periodically with new EOS, effectively substituting inflation for transaction fees.
When trading EOS via an exchange, investors can expect small amounts to be levied as a charge. This is usually around 0.1% per transaction. Nonetheless, overall there is no doubt that EOS is particularly competitive in this department.
Although the cryptocurrency marketplace offers huge opportunities, there are also risks associated with investing in tokens such as EOS.
The first issue is one that has been mentioned previously in this article, namely that the cryptocurrency market place is volatile. Tokens can go down as well as up, and there are definitely risks associated with speculating in the cryptocurrency market.
It can also be asserted that cryptocurrencies remain relatively unregulated. This is a gap in the cryptocurrency niche that has begun to be closed, though, with regulation and legislation being passed in recent years. Nonetheless, it is still not entirely decided whether cryptocurrencies can be considered commodities or virtual currencies, and many grey areas persist with regards to regulation.
Hacking and human errors can also be problems with cryptocurrencies, while coins can even be discontinued due to financial difficulties or hard forks. Nonetheless, it should be noted that these problems are issues with conventional cryptocurrencies as well, and shouldn’t be solely levelled at altcoins. While theft can be an issue with cryptocurrency, this is absolutely true of all investments.
There are several payment methods available for EOS purchases, with an array of fiat currencies supported. All major fiats should be available for EOS purchasing and trading, while other platforms such as PayPal, Skrill and Neteller are also available. EOS can also be purchased with some of the other major cryptocurrencies, such as Bitcoin and Ethereum.
There is no doubt that the completely fee-free status of EOS is a hugely attractive aspect of the system. This is very bullish for EOS going forward, with many crypto enthusiasts believing that this system has huge potential.
Similarly, the developers of EOS have demonstrated that this token and blockchain is particularly fast and efficient, and this must be a massive positive factor for the future of this altcoin. Security, safety, and sophistication are all built into EOS, and this would seem to point to the crypto token being a sound investment.
The road ahead for legacy financial markets is less than certain, which means that cryptocurrencies such as EOS are likely to remain bullish in the foreseeable future as per expert traders.
EOS has been a relative success story during its short life, establishing itself in the top 50 cryptocurrencies by market capitalisation. This is a commendable achievement for a token that has only been in circulation for a few years. Many in the EOS community believe that it can continue to climb to greater levels in the years to come.
This has partly been achieved due to the non-existent fee structure associated with this cryptocurrency project. This has undoubtedly made the EOS token attractive to both investors and cryptocurrency enthusiasts.
Those wishing to invest in EOS have several options available to them, as this is a token with strong long-term potential. Its developers have plans to expand the EOS project further still, providing a potential upside to investors.
As with any cryptocurrency, or any investment, those wishing to participate in the market should remember that EOS can go down in value as well as up. New users must practise risk management and make use of strategies like hedging as crypto investments are a volatile insturment.