Is Ethereum a Good Investment?

Ethereum is a global computer for running decentralized apps, also known as dApps. A lot of people assume that Ethereum is a cryptocurrency. However, Ether (ETH) is the cryptocurrency that powers the Ethereum network, and it is the form of payment that is required for processing a transaction on the Ethereum blockchain or running your app. 

While Bitcoin is highly effective as a store of value, it does not support smart contracts as Ethereum does. Plus, a lot of people would argue that Ethereum is just as effective as a store of value.

Ether has been battling with Bitcoin for the number one spot as the largest cryptocurrency by market capitalization since it was first released more than six years ago. In fact, in early 2018, it came very close to doing so.

Since then, both coins have hit all-time highs, and a lot of people believe that Ethereum is going to ultimately become the most dominant cryptocurrency and blockchain by market cap. 

Background history on Ethereum

Before we take a look at investing in Ethereum in further detail, we will give you a bit of background history on Ethereum.

Ethereum is an open-source, decentralized blockchain, with smart contract functionality. Ether is the native cryptocurrency of the platform.

Vitalik Buterin, a well-known programmer, conceived the idea for Ethereum back in 2013, and then development work started in 2014. A year later, the network went live.

The platform gives anyone the ability to deploy immutable and permanent decentralized applications onto it, with which users can interact.

Lately, Ethereum has started to implement Ethereum 2.0, which is a series of considerable and significant upgrades, which includes a transition to proof of stake, and aims to use sharding to increase transaction throughput. A lot of experts are very excited about the different changes that are coming.

What are the benefits of investing in Ethereum?

There are a number of reasons why Ethereum comes highly recommended as an investment choice. This includes the following:

Expanding developer community

Ethereum first came onto the scene back in 2015. Since then, it has managed to revolutionize the cryptocurrency investing scene pretty quickly. Despite Ethereum not being the first cryptocurrency, ETH has quickly become one of the most popular digital assets.

Plus, the team behind Ethereum is admired by many, especially Vitalik Buterin. This is one of the reasons why a lot of people have trust in the transparent roadmap of Ethereum.

The ecosystem is also expanding, with over 250,000 active developers are the moment. This level of support is a clear advantage when investing in Ethereum.

Is Ethereum a Good Investment?

Ethereum is decentralized

Whether you buy Ethereum with a credit card or a debit card, the decentralized nature of Ethereum is something that is likely to appeal. The blockchain technology is transparent and decentralized, and it was initially created for the purpose of providing an alternative to conventional banking systems.

As Ethereum gives people to power to execute transactions and deals without third parties or central banks, this can also benefit users in terms of dealing with censorship around the world, unfair transaction fees, and restrictive regulations. 

Ethereum is the hub of the crypto market

Every crypto wants to build bridges to Ethereum, and a lot of crypto projects, including Tron and Binance Coin, began on the Ethereum network as ERC-20 tokens before they then moved to their own chain.

Today, Uniswap and some of the other biggest cryptos are still based on Ethereum. When cryptos build bridges on Ethereum, they are opened up to much of the crypto market.

It is more secure than the majority of cryptos

There is a very large community of active developers spread across the globe. This means that it is more difficult for malicious users to have control of the blockchain.

In blockchain technology, the greater the popularity, the higher the security. It can, therefore, be argued that Bitcoin is probably the only crypto that is more secure than Ethereum.

There is no cap on Ether

One of the chief differences between Ether and Bitcoin is that Bitcoin is capped, whereas Ether is not. Ether has practical utility, and transactions come with fast transaction lines and self-executing contracts.

Interestingly, Vitalik once said that Ethereum will have the ability to process more than one million transactions per second. Of course, if this ends up being the case, it will be another huge advantage for Ethereum.

More and more businesses are attracted to Ethereum

A further benefit is that a lot of large benefits support Ethereum development, with Ethereum Enterprise Alliance being one of the chief organizations that monitor Ethereum.

As third parties become redundant, it is likely that an increasing number of investors are going to move into Ethereum investing.

One of the chief figures interested in Ethereum is the venture capital company Andreessen Horowitz.

Furthermore, another benefit of investing in Ethereum is that Ethereum facilitates a number of Initial Coin Offerings (ICOs). ERC-20 tokens are usually seen as the standard for ICOs and fundraising.

Of course, we cannot ignore the fact that CryptoKitties also took the world by storm, reaching $12 million in funding.

Ethereum is not just a cryptocurrency

Of course, we also need to address the fact that Ethereum is more than a cryptocurrency. The platform supports a number of decentralised finance (DeFi) projects, dApps or apps that exist on a blockchain, and smart contracts, and this is another one of the key advantages associated with investing in Ethereum.

As a consequence, Ethereum can be used in many different sectors, from energy distribution to medicine and gaming. It can also be used to foster the tokenization of crypto-collectables, ID verification, medical records, voting history, patents, art (such as NFTs), and other complex agreements.

Should you invest in Ethereum or Bitcoin?

A lot of people have this question! They want to know whether or not they would be better off putting their money into Bitcoin or Ethereum. We will help to shed some light on this so that you can come to the decision that is right for you.

Ethereum and Bitcoin are not like-for-like

It is important to realize that Ethereum and Bitcoin have completely different use cases. Bitcoin, like hold, acts as a store of value. While Ether is also a store of value, the Ethereum Solidity and Virtual Machine programming language mean that it can host a number of innovative features via smart contracts.

Ethereum has its own programming language, which is known as Solidity, which enables coders to write “smart contracts” — programs. Ethereum smart contracts are able to automate thousands of monetary products. They are building blocks for NFTs.

These smart contracts enable fully-fledged applications like automated market makers (AMMs) and decentralized exchanges (DEXs).

While very basic smart contracts are technically possible on Bitcoin’s blockchain, the custom programming at Ethereum and the expansive team of developers mean that it is clearly the long-term winner.

The blockchain at Bitcoin simply acts as a decentralized ledger for payment processing. Ethereum is a general-purpose blockchain that will create more advanced products.

Which one is going to be the better investment for you: Bitcoin or Ethereum?

As far as which of the two is going to be a better investment, it is not possible to say. It is entirely feasible that both Ethereum and Bitcoin are going to end up standing the test of time and they will peacefully coexist in the future. 

At the end of the day, only you can make your investment decisions. Of course, you can use the assistance of an investment advisor. However, what we mean is that your investment decisions need to be based on your own circumstances, your investment goals, and your risk profile. Everyone is different.

The most important thing to do is educate yourself as much as possible before you risk the money you have worked hard for. Plus, never invest money that you are not willing to lose entirely. Of course, the hope is that you won’t lose your cash. We’re all looking to make more money! However, having this sort of approach will stand you well if anything bad happens.

Final words on investing in Ethereum

As you can see, there are a number of benefits that are associated with investing in Ethereum. Of course, there is no right or wrong when it comes to deciding whether or not you should invest in this blockchain. It all depends on your investment goals and your circumstances.

However, if you are looking for one of the “safer” bets in the cryptocurrency market, most experts would highly recommend Ethereum. Of course, we have to put safer in inverted commas because there is no such thing as a sure bet when it comes to investing, and especially in something like cryptocurrency. So, never invest more than you can afford to lose!