Ethereum Is a Good Investment If You’re Interested In Cryptocurrencies
Cryptocurrencies will continue to attract new investors in 2022. There’s tremendous focus and attention being paid to the industry, which is most likely due to the expectations around the rise and growth of digital assets. Having some kind of cryptocurrency is a prerequisite to a modern investment portfolio. The question now is: What cryptocurrency makes a good investment? If you’re a novice cryptocurrency investor, you should start with a larger, more established option, such as Ethereum. It’s nothing short of astonishing. Ethereum, the world’s second-largest cryptocurrency, was launched in July 2015 and first traded on August 7 for $2.77.
Ether, the native token of Ethereum, can be used to buy and sell goods and services. You can exchange cryptocurrencies for Ether tokens, but Ether tokens can’t be substituted for other cryptocurrencies. Ether can be purchased with fiat currencies, such as the US dollar. It’s estimated that there are 119,120,909 tokens in circulation. Interestingly, Ethereum has an infinite supply. Since there’s no fixed or limited supply, Ether tokens can grow and expand as their demand spikes. Following the upcoming changes to the blockchain network, it’ll be possible to tame the price without impacting the supply of Ethereum.
If you’re still not convinced Ethereum is a good investment, this will change your mind.
Smart Contracts Run on The Ethereum Platform
Since the very beginning, countless programs in smart contracts have been developed on the Ethereum platform. They run when predetermined conditions are met. Smart contracts are deployed to automate the execution of agreements; all participants (i.e., the buyer and the seller) are certain of the outcome. The code and the agreements exist across the distributed, decentralized blockchain network. Given that smart contracts live on blockchain technology, they’re trackable and irreversible. There’s no need for a central authority or legal system, let alone an external enforcement mechanism. Smart contracts can be used for the exchange of money, the delivery of services, and unlocking content that is copyright protected.
To execute a smart contract code, someone has to send Ether as a transaction fee. This, in turn, pays the Ethereum nodes for taking part and providing their computing power. A node is basically the running piece of the client software. Depending on your needs, the node can be a dapp (decentralized application) or a wallet. You should implement a full node because it can interact with any smart contract on the public blockchain. Whenever a transaction is added to the blockchain, the full node checks to see if that transaction complies with the Ethereum specification.
Ethereum Finds Favor with Institutional Investors
It’s no secret that Ethereum has been gaining massive adoption over the past years. Institutional investors – anyone with more than $10 to play with – have become involved in cryptocurrency trading. J. P. Morgan, for example, has taken advantage of the Ethereum implementation to tokenize fiat currency. As a matter of fact, J. P. Morgan owns critical blockchain infrastructure. The appetite of institutional investors is growing beyond the initial exposure. The slow adoption rates will change (and quickly). Institutional investors seek stable, predictable returns, so it shouldn’t come as a surprise that Ethereum is becoming the leading attraction.
To navigate the cryptocurrency market, institutional investors analyze price charts. You should be doing the same. When investing, an Ethereum price chart is your most valuable tool. It highlights current conditions and shows you whether ETH is trending up or down. Look at the overall trend to understand where the price is heading. If the overall trend is upward, the price will continue to rise – and vice versa. Don’t get too caught up in the details. You have to look at the bigger picture. Above all, have a plan for trading Ethereum. Consider what you want to achieve and set daily/weekly/monthly goals.
Decentralized Apps Are Being Built on Ethereum
Apps can operate autonomously, through the use of smart contracts, on the blockchain system. The information stored on Ethereum’s platform can’t be shut down by a government or agency, so it’ll remain uncensored. Decentralized apps can also run on peer-to-peer (P2P) networks. In spite of the growth of alternative blockchain networks, dapps exist only on the Ethereum blockchain. The decentralized applications are backed by a community of developers, which ultimately amplifies the network effect. They work just like regular apps, the only difference being that they’re not controlled by a single authority.
Ethereum 2.0 Is A Turning Point
Ethereum 2.0 is coming soon. It’s the most significant upgrade in the history of blockchain. Ethereum is making the transition to the proof-of-stake model, which will improve the transaction speed. Additionally, it’ll have a lower environmental impact. It’s hoped that Ethereum 2.0 will cut energy costs by 99%. Right now, the world is facing a power crunch, so the change is welcomed. The much-awaited upgrade will prove that the Ethereum community is capable of serious business. Ethereum 2.0 is devised with security in mind. It requires a minimum of 16,384 validators. Not only is it more decentralized, but also more secure.
Success in the cryptocurrency space will bring renewed faith in the future of Web 3.0. Anyone will be able to seamlessly transfer data and value across platforms in a safe and transparent manner. For the time being, Ethereum can’t meet the demands of consumers who prefer the metaverse. It can’t process more than 30 transactions per second. But all that is going to change soon enough. Metaverse cryptocurrency developers will realize the advantages of building on Ethereum 2.0. Ether itself benefits from the move to the metaverse, as the tokens can be used to make purchases across different platforms, such as Decentraland.
Ethereum Stands the Test of Time
Finally, yet importantly, Ethereum is one of the world’s oldest cryptocurrencies. The digital tokens that the blockchain network has brought about (i.e., Ether) will stand the test of time. Its resilience should be a key selling point. Ethereum was originally conceived by Vitalik Buterin at just 19 years. It has managed to bring thousands of people from all corners of the globe into the world of finance. ETH is a good long-term investment.