What does this platform have that many see it as the future of the digital market? Is it a good time to invest or is it better to wait? Find out in this article.
What is Ethereum?
Ethereum is much more than a currency in the digital market. It is a global platform with which it is possible to create various decentralized applications (dApps).
It is based on blockchain technology and its main feature is that it can execute smart contracts.
How do smart contracts work? In the world we all know, a contract implies an obligation and its fulfillment is regulated by laws, banks or governments. Smart contracts, on the other hand, aim to guarantee compliance with cryptographic methods.
They are pieces of code created to execute a certain action when a condition is met. Once loaded on Ethereum, they will always be executed as stipulated, for this reason they are extremely reliable.
Ethereum also has its own cryptocurrency to trade in the digital assets market, Ether (ETH).
7 reasons to invest in Ethereum (and not regret it)
Ethereum has been slowly growing this year and its future expectation is very promising. This has caught the attention of traders and investors who see it as an interesting opportunity when betting on the digital market.
But what does Ethereum have that makes it so interesting when investing?
Let’s see why it’s worth taking your first steps in this popular cryptocurrency.
- Its application is infinite
- The capacity of its smart contracts
- NFTs need Ethereum
- The future will be tokenized
- It has the confidence of large companies
- It is a solution to censorship
- It allows you to diversify your investment
Its application is infinite
Unlike Bitcoin, which is a pure currency, Ethereum is a platform that allows you to develop an infinite number of projects based on blockchain technology. Today microgrids, electric vehicle charging stations, mortgage homes, and medical records are being built. Its versatility is its main power, in a future virtual world we could live with hundreds of Ethereum projects.
The capacity of its smart contracts
Ethereum’s ability to create smart contracts has enormous potential. The use of these types of agreements without human intervention and completely decentralized seems to be not only the future of crypto but also the future of the internet, as it implies a new way of linking between companies and individuals from all over the world.
NFTs need Ethereum
A key factor in the blockchain are Non-Fungible Tokens (NFTs), which are based on smart contracts. They are beginning to pave the way for a new way of testing the ownership of virtual assets and this can also be applied to the ownership of physical assets. Ethereum plays a fundamental role because most of the most important NFTs are built with its technology.
The future will be tokenized
According to the World Economic Forum, by 2027 the world’s GDP will operate with tokens, that is, it will function under transactions of blockchain technology. Today the most powerful blockchain technology in the market is Ethereum, so its future is more than promising.
It has the confidence of large companies
Brands like MasterCard, UBS and JP Morgan have already begun to invest in the development of technologies based on Ethereum, pointing the way to other market players.
It is a solution to censorship
The information stored in the Ethereum blockchain cannot be censored by governments or authorities since it operates on a decentralized technology.
It allows you to diversify your investment
If an investor wants to diversify his strategy of buying cryptocurrencies, Ethereum is the best option after Bitcoin.
Is Ethereum a good investment?
If we observe its performance this year and its bullish trend, Ethereum could become the future of the global system of virtual currencies.
But is it worth investing now or is it better to wait?
Let’s start by seeing the reasons why now might be a good time to invest in Ethereum and why buying ETH could be a good decision.
While Bitcoin’s market capitalization is still well above Ethereum, the gap has shrunk considerably over the last year.
Bitcoin’s share of the cryptocurrency market has recently fallen below 40% compared to a peak of nearly 50% at the beginning of the year. Ethereum, on the other hand, increased its share to over 20%.
According to Gabriel Selby, Chief Analyst at CF Benchmarks, “Since the beginning of the year, the market capitalization ratio between Bitcoin and Ethereum has converged to its tightest differential since May 2021.
If the current trend persists, Ethereum could reach the top by the end of 2023, or sooner.”
Its update could boost its value
Ethereum recently launched The Merge, its long-awaited radical update that promises to completely change the future of cryptocurrencies.
The development makes Ethereum move from a proof-of-work (PoW) mining protocol to a proof-of-stake (PoS), where the amounts of computers needed to keep its blockchain running are reduced.
This new way of mining cryptocurrencies makes the network significantly faster and more economical for users, and is expected to reduce energy consumption by almost 100%.
All of this could mean that now is the right time to invest in Ethereum.
So, is it worth investing in Ethereum and when should you do it?
Despite its many advantages, Ethereum, and cryptocurrency in general, is still a speculative investment. No one knows for sure if it will be successful in the long run, which means it carries a higher level of risk.
What we do know is that it is the most promising cryptocurrency at the moment. If you are willing to take on a higher risk for the possibility of getting interesting rewards, Ethereum may be the right investment for you.