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Cryptocurrency Update: Now It’s Time To Start Buying Ethereum
The Ethereum Rally 2.0
For those of you out there still interested in Ethereum the world’s most advanced cryptocurrency isn’t dead. Far from it, in fact, after yesterday’s news it is now time to start buying ETH again. Why? What happened to make things so different? Well, the ETH development community has finally signaled when Ethereum 2.0 will launch.
The bad news is that the system-wide upgrade won’t be happening in the second quarter of 2020 like we’d been expecting. No surprise there because the upgrade has been pushed back several times already. First slated to launch in Q1 of 2020, developers are now eyeballing the blockchains 5th anniversary. What is surprising is that developers are confident it will launch this year, despite all the delays, and one even put a 95% probability on the event. According to the team anything less will count as a complete failure.
What we can expect is the initial ground-work and testnets to launch sometime in the 3rd quarter with a more full-scale launch once those systems are proofed. In an Ask Me Anything discussion hosted on Reddit the ETH 2.0 teams said the network won’t go live until three clients and run their testnets consistently for eight weeks. With this in mind there are still some significant hurdles for the team to overcome but the outlook is brightening.
What is ETH 2.0 exactly? Well, it is all those upgrades we’ve been expecting that are intended to boost throughput and improve security. The biggest shift for the network is a change from Proof-of-Work to Proof-of-Stake and those details are still not hammered out. There are two schools of thought on how to address the shift, ways to account for previous blocks created by POW and the new ones created by POS. Once solution is to issue “receipt contracts” that can function on the network as placeholders for previous transactions, the other is to form some kind of interoperability bridge that allows old ETH 1.0 to function alongside the new ETH 2.0.
Ethereum Is On The Move
Shares of Ethereum were on the move even before the announcement was made. The worlds “most advanced” cryptocurrency has been edging higher with the entire market but got a boost after the AMA event. Up more than 17% in the last three days, ETH is now attacking resistance at a very key level.
The $225 resistance level is consistent with the September peak and a 5-month high. When broken, ETH will be trading at the highest levels in over half a year and the technical are positive. MACD momentum and stochastic are both bullish and pointing higher, the only negative is that stochastic indicates the possibility of overbought conditions in the near-term.
What traders can expect is to see ETH/USD continue to test resistance at this level and possibly enter consolidation. Consolidation may take several weeks or even months depending on the news that comes out relating to the upgrade. The risk is that news will come out contrary to this latest update and sap demand for this market. If that happens don’t be surprise when ETH plummets by double-digits.
Should I Buy Ethereum in 2020? (Pros and Cons)
Last Updated on March 18, 2020
Should I buy Ethereum?
This is the question that many ask themselves when they learn that ETH has rallied from $0.25 to an all-time-high of over $1,400 per coin in just 3 years.
This means that an investment of just $100 would have netted you $560,000 in just a few years.
In this guide, we analyze the advantages of Ethereum, its massive potential, and also its risks, so that you can decide if you should buy Ethereum, or not.
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At the end of the guide, we will also show you how you can invest in Ethereum safely.
What is Ethereum?
The Ethereum project was first proposed in late 2020, by Vitalik Buterin. At the time it was launched in 2020, the co-founder of Ethereum was currently also the co-founder of Bitcoin Magazine.
Generally, Ethereum is one of the thousands of cryptocurrencies, currently ranking as #2 on Coinmarketcap. Cryptocurrencies are a new kind of digital money, which run on a technology called the blockchain. This technology allows the transaction of money or data in a decentralized, transparent and immutable way.
Ethereum is often thought of the faster gold or the digital silver of Bitcoin‘s gold. However, technically Ethereum is a decentralized, open-source, and distributed computing platform that allows smart contracts and decentralized applications to operate on it, which are also known as DApps.
These DApps (standing for Decentralized Applications), allowed the huge ICO boom. With the tremendous success of ICO‘s, the word about Ethereum spread quickly not only all over the crypto space but also in major news channels such as CNN.
Ethereum is founded on a programming language called Solidity. Even though it is completely different than the usual coding languages, programmers claim that it is not very challenging to dominate the Ethereum language and start building smart contracts.
It‘s important to understand the Ethereum blockchain and how it differs from other coins to be completely sure about your investment. After this guide, you will have a clear perspective over if you shouldn‘t or should buy Ethereum.
What competitive advantages does Ethereum have?
Buying ETH and making that investment requires an understanding of the advantages that Ethereum as a cryptocurrency and platform provides to the crypto markets.
Ethereum is the first smart contract platform to have ever been created, enabling decentralized applications to become a reality.
The initial idea to create Ethereum was born in the mind of Vitalik Buterin in 2020, who at the time pushed the proposal to be included in Bitcoin. Failing to gather support for his proposal, Buterin changed the scope to create a platform independent of Bitcoin.
Operational since 2020, the Ethereum platform has facilitated the creation of 1853 decentralized applications , many of which are platforms with their own tokens.
In fact, there is a total of 170,076 tokens issued on the platform. All of them use ETH tokens to facilitate transactions on their blockchains, enabling a steady demand for ETH, a fact which is appealing for the interested investor.
Replicating this level of activity is difficult with the only real contender in dApp space being EOS, a platform which attracted $4 billion USD in investments.
The lack of user adoption has been one of the most pressing issues that blockchain-based projects have faced, excluding ones dealing primarily with the money transmission and pure currency use cases.
IMPORTANT: Easiest ways to buy Ethereum
|Coinbase||12||USA, Europe, Canada|
The game-changing potential of Ethereum
What started with Bitcoin is being taken to the next level by platforms such as Ethereum. The ability to create decentralized applications and to share these capabilities with the world means that anyone can create products on top of Ethereum.
These products share Ethereum’s qualities, such as immutability, the ability to produce tokens, global and verifiable transparent data, and as mentioned in the first section has attracted developers to create a significant number of decentralized applications.
Let’s get a little bit deeper in the unique aspects of Ethereum and what are the real benefits of the platform’s existence.
A computer to run uncensorable apps
Censorship is a real issue in the modern world, with many of the major social media players having full control over which posts get widest amount of reach, while at the same time “shadow banning” or outright deleting content that is deemed against the terms of service.
In fact, all of these companies reserve the right to delete, modify, or “hide” content from specific countries upon receiving a request from a government official, a company, or any legitimate third party.
In most cases, far-right, neo-nazi propaganda and accounts are the targets of censorship, due to their proclivity for hate speech. Other times its whistleblowers sharing secrets the U.S. government wants to keep hidden from you.
Ethereum can help resolve the censorship issue, by making social media networks that are uncensorable.
Such is the case with Cent , a social network based on Ethereum which enables users to create and share any content.
Censorship in Cent is limited to the user’s ability to block other users, and therefore self-censor, a right we should all reserve for ourselves.
Other use cases involve securing payments data, ownership of digital and physical assets, providing oversight to public enterprise expenditures and more.
Beyond transactions, you can record essentially any type of information on the blockchain. Text is light enough to upload directly, but images and videos can also be permanently hashed into the blockchain through the use of systems such as the Interplanetary File System (IPFS).
Remove rent-seeking third parties from the finance world
Many facets of our life are connected to the prospect of money, and the institutions that operate within finances have positioned themselves to be intermediaries and to earn because of their enabling capabilities.
Mastercard earned $14.950 USD billion in 2020 in revenue, while VISA had $21.253 USD Billion in revenue in the same year. Lender bank JP Morgan made $32.5 USD Billion in net income in 2020 and a lot of this comes from interest rates on loans.
Paypal processed a total of $578 USD Billion in transactions, which results in approximately $16.72 USD Billion in revenue for the company.
These companies are making a lot of money just for helping people move their money around or get access to loans. Ethereum’s smart contract functionalities enable it to provide the same capabilities, while also getting rid of rent-seeking intermediaries.
Projects like MakerDAO have leveraged the power of Ethereum smart contracts to create a decentralized lending platform using ETH as collateral and pays the borrower in DAI, a stablecoin created by the decentralized organization.
While interest fees do still apply, they are just 2.5% low. That interest rate is appealing when compared to traditional banking rates of anywhere between 4-30% for secured personal loans.
Tokenization of assets
Tokenized assets are one of the game-changing innovations that are brought to life through the use of blockchain technology. There are predictions that by the year 2027, the total value of tokenized assets will reach $24 trillion USD .
Ethereum can be used to tokenize physical assets through the use of smart contracts and traditional legal contracts.
As a result, the assets become more liquid, easily transferable, and open for smaller investors who are not able to commit millions of dollars into an investment.
Ethereum is a great tool for tokenization due to its elaborate smart contract capabilities and high network security. This is why investors and projects are already utilizing Ethereum to tokenize physical assets.
Harbor and Inveniam Capital are working on tokenizing real estate in the USA, while startups like Smart Valor are working on building up an exchange for security tokens.
Global and transparent data verification
The nature of blockchain technology is primarily for use in decentralized and transparent systems. Secure and transparent data storage which can’t be altered by a third party, with a verifiable smart contract can be used in various use cases, and there have been successful implementations already.
While not directly related to an Ethereum-based project, West Virginia recently approved a blockchain-powered mobile app to enable overseas citizens to participate in the state-level elections.
The app in question is called Voatz and it enables the state to verify the identity of the users and provides them with the ability to cast their votes.
In the future, blockchain-powered elections are expected to be the norm because of the transparency and security of data, as well as the inability for any fraudulent activities to be undertaken.
Digital identity is another important use case for blockchain and Ethereum. Civic , a startup built on top of Ethereum is enabling the secure transference of identity from documents to a pure digital certificate.
Why now could be a good time to buy Ethereum
There is no quick and easy answer to the question “Should I buy Ethereum now?”.
Investment decisions are best made in the head of the individual investor (or investor group) after carefully analyzing the potential and risks of making an investment in this cryptocurrency.
In this section we will take a look at the good, the positive signs that Ethereum is showing, which promise to make ETH a good investment. Later on, we will also look at risks associated with investing in Ethereum.
Scalability issues are being solved
As mentioned before, Ethereum and other cryptocurrencies are plagued by one very big problem: they are hard to scale.
Decentralized systems are very difficult to scales, and if the demand for making transaction passes a certain threshold, operational problems start to appear.
Transaction costs start to rise, due to the nature of transaction fees in cryptocurrency and waiting time goes through the roof.
At the moment, Ethereum can process about 15 transactions per second. To illustrate the problems mentioned above we touch upon a decentralized app called “Crypto Kitties” which was launched in November 2020.
By January 4th next year, this Tamagotchi-like application got so popular that the Ethereum network broke a new daily transaction all-time high.
This record number of transactions, which totals a staggering 1,349,890 *, clogged the network, caused transaction fees to rise, and slowed down the processing of transactions significantly.
Since then, developers have understood the gravity of the situation and the necessity for a solution. The process of creating the solution started with two proposals, one related to sharding and another one to payment channels, otherwise known as “ Plasma ”.
These updates are expected to be implemented after the Ethereum network switches to the “Proof of Stake” consensus algorithm, for which the first step has already been taken on February 28th, 2020 in the form of the Constantinople Ethereum update.
A lot of ETH is being locked up
Supply and demand are the driving forces behind the value of assets on any market. Fortunately for Ethereum, and also for the prospective investor such as yourself, a lot of ETH is being used as collateral.
Crypto loan providers, such as the MakerDAO project we mentioned earlier, requires ETH deposits in order to release a DAI amount to the loan requestor.
MakerDAO holds a total of 1,952,710 ETH as collateral at the time of writing, which is almost equal to 2% of the entire ETH supply.
But that’s not all, there are countless more applications on Ethereum that require its users to lock-up ETH. These applications are collectively called “Open Finance”.
Consider this together with the fact that the entire Ethereum network is slowly transitioning to Proof of Stake (POS), a consensus algorithm which requires users to lock up their ETH in order to validate transactions, and you will understand that the ETH supply in circulation is set to diminish in the future.
As the ETH supply on the open market keeps decreasing, if demand stays constant or even increases, then by definition the ETH price will increase.
Institutional money is getting interested in Ethereum
One core part of human behavior is the fact that we are willing to follow those that we believe are more knowledgeable, stronger, or better than we are. This is why large institutions entering the cryptocurrency scene is so exciting for the ecosystem.
These organizations are trusted by thousands of investors in traditional markets. Therefore their interest in crypto adds credibility to the industry, something which digital assets have been lacking.
Fidelity, a $2.4 Trillion titan, is breaking the ice forward for others from the corporate world by establishing an investment platform for Bitcoin and Ethereum .
At the same time, the New York Stock Exchange is getting ready to write their own crypto future though their subsidiary called Bakkt. The offer is for physically settled Bitcoin initially, but there are rumors that Ethereum contracts are in the works as well.
There is a lot of legal ground to cover before these contracts find themselves in the hand of retail investors, as the U.S. Securities and Exchange Commission has yet to give approval for anyone of the investment instruments being proposed by these institutions.
Once approved though, these contracts, could have a powerful impact on crypto markets..
Risks of buying Ethereum
To make this guide as valuable as possible, we need to address the various risks that may influence your decision making when considering whether you should invest in Ethereum.
Knowledgeable decisions are key to making sure that your investments will not lead to regret in the future, regardless of how Ethereum’s price may turn out.
Another major bug could make people stop trusting Ethereum
Ethereum’s history is not entirely clean. Since its inception in 2020 the platform has had two major negative events that are being discussed even today. These scandals have contributed to the security of the network, but at great costs.
We are talking about two exploits, one called the DAO Hack , and another the Parity bug . In the first case the total damage amounted to 3.6 Million ETH, while in the latter case the damage was approximately 1 million ETH.
Logo of “The DAO”
The consequences have been critical, but Ethereum has survived, as it was not the platform that was responsible for the exploits.
Which brings us to smart contracts, code which is designed to automatically perform specific operations. In essence smart contracts are not that different from any regular old piece of software, but the consequences of a bug are incredibly different.
Both cases above are a result of lack of oversight or code testing on behalf of developers creating on top of the Ethereum network.
Another bug or exploit causing damage in the future may damage Ethereum’s reputation and demand among developers, who might switch towards developing applications on platform which they deem are more secure, or provide them with better development conditions.
A better platform could gain traction
Beyond hacks and exploits, Ethereum has its fair share of issues that prevent any serious commitment by developers and users alike.
Ethereum’s scalability limitations combined with the difficulty of developing a secure smart contract and the wasteful Proof of Work (POW) consensus algorithm may open the way for other platforms to overtake Ethereum’s place at the top.
In recent years Ethereum’s success has led to the creation of similar platforms such as Zilliqa and EOS. These new competitors promise an easier learning curve, safer environment, lower energy footprint, and better GUI for the end users.
The majority of attention is still directed at Ethereum, but before investing in ETH it’s important to keep in mind that this may change.
Bitcoin, Ethereum, Litecoin and any other cryptocurrencies which rely on the original “Nakamoto Consensus”, i.e. Proof of Work are susceptible to a 51% attack.
Due to the nature of the consensus algorithm, this vulnerability enables anyone with enough hardware and mining power to create a shadow blockchain and once it becomes the longest chain, push it to the public, and have it compete for acceptance.
To perform this kind of an attack, the malevolent actor needs to have at least 51% of the mining power on the target blockchain. As a result, the attacker can modify the data on the blockchain, spend their cryptocurrency twice , and prevent others from successfully obtaining the rewards from their mining efforts.
In 2020, attackers earned more than $20 million USD by attacking five different cryptocurrencies, according to a report by The Next Web and Group-IB .
The same thing could happen for Ethereum as well, especially considering the desire of the Ethereum community to switch to a Proof-Of-Stake algorithm, which would make miners obsolete.
In light of this change, miners may self-organize to perform a 51% attack on the network in that critical stage of the transformation to take control and prevent the switch.
Critical development goals could continue getting postponed
On February 28th, an update was finally implemented after two failed attempts.
It’s understandable that the technical challenges involved when improving Ethereum are far from simple, but if its core developers constantly miss deadlines with critical updates like Sharding, then that can be dangerous for the network’s long-term viability.
Which Ethereum investment strategy should you follow?
Investing is both an art and a science, and there are multiple strategies that traders/investors to manage their digital assets portfolio. In this section we will introduce you to three separate strategies, which will appeal to different types of individuals.
Buy and Hold (HODL)
Unlike traditional investments, buying into cryptocurrency is not a complicated and arduous process. All you need is a platform to buy ETH, a wallet capable of storing it, and the iron will to HODL when all hell breaks loose.
HODL is one of the biggest “memes” in the crypto community, a play-on-words from the word “Hold”.
Cryptocurrencies are notoriously volatile, and the price can sometimes swing by 20% (up or down) in just hours. HODLing is an investors protection to Ethereum’s volatility, by committing to not selling even if the price drops sharply.
HODLers are crypto investors that believe in the technology, and that are planning to hold their coins for the long-term.
Dollar cost average
This strategy consists of setting a budget for yourself and purchasing the asset class of your choice on a monthly basis, for that set amount of dollars regardless of the actual price of the asset.
This strategy is a great way to minimize the risk of buying an asset at the top.
Further, although you are only buying small amounts (like $100), it quickly adds up if you are consistent with the approach.
Active swing trading
Swing trading is a short-term strategy that involves utilizing technical analysis and news events to form precise Ethereum trading decisions. With this strategy, you are hoping to generate profit while speculating on Ethereum’s short-term price swings.
Due to the complexity and risk of this strategy, swing trading should only be reserved for people that are experienced traders.
When is the right time to buy Ethereum?
Ethereum was launched in an ICO (Initial Coin Offering), where investors sent BTC in exchange for ETH. In Ethereum’s ICO, 60 million ETH were issued at a price per coin of just $0.26. Investors that held their coins until now are obviously in significant profit.
Since then, Ethereum has been on a consistent uptrend that pushed its price to over $1,400 per coin in January of 2020.
That being said, much like other cryptocurrencies, Ethereum’s price does not follow a straight line. The ETH price moves in significant expansive and contractive moves, often rallying 250%+ before correcting -60%.
Since Ethereum closely tracks the Bitcoin price trend, it can be a good idea to keep BTC’s seasonality in mind before investing in ETH.
To wrap up this section, if you are planning to hold your ETH for multiple years and expect it to gain significant traction, then it doesn’t really matter when exactly you buy. The only important point, in that case, is that you are indeed involved.
How much money should you invest in Ethereum?
The decision of how much money you should invest in Ethereum needs to be made by yourself. However, there are a few things that you should keep in mind.
First of all, never invest more than you can afford to lose. Don’t be like reddit user /u/Cryptohomie who took a $147,000 loan to invest in cryptocurrency, and is now down -85%.
Cryptocurrencies (Ethereum included) have an innate tendency towards volatility, meaning that they rapidly gain and lose value. While Ethereum has some long-term prospects, the risks of losing all of your invested capital are definitely there.
A good way to think about this is to imagine that ALL the money you invest in Ethereum is gone forever.
Does that thought make you uncomfortable? Then you were planning to invest too much.
Should you buy Ethereum or Bitcoin?
Ethereum is a platform, while Bitcoin is a pure cryptocurrency. Developers use ETH to write up new smart contracts and to execute operations within said smart contracts.
That being said, Bitcoin is currently significantly more adopted in its niche than Ethereum is. This is the reason why m ost people feel safer investing in Bitcoin than they do with Ethereum.
However, with greater risk often comes greater opportunity. Ethereum’s market capitalization is magnitudes lower than Bitcoin’s, which means that if may offer a higher return than Bitcoin will.
Should you buy Ethereum or Ethereum Classic?
Earlier in this article, we mentioned network security as a potential risk of investing in Ethereum.
The biggest fiasco that Ethereum suffered in that regard so far was “The DAO Hack”, where 3.6 Million ETH was stolen.
This resulted in a “hard fork” which split the Ethereum network in two, resulting in two coins: Ethereum (ETH) and Ethereum Classic (ETC).
The main difference between ETH and ETC is that ETC stored the record of TheDAO theft and exploit because according to them immutability is what blockchains are all about and “code is law”.
However, ETC hasn’t really gained much traction and most developers moved forward with ETH. Having a quick look at the Github page of both projects, we can see that ETH has 200 repositories vs 39 on ETC, which shows the massive difference in development activity.
Ethereum Classic is at large deemed as a risky investment by the wider community. The cryptocurrency has since also experienced a 51% attack which led to the double-spending of $1.1 million USD worth of ETC.
Unless you are open to taking significant risk, you should likely stay away from ETC for now.
How can you buy Ethereum? (3 simple steps)
Buying Ethereum is a lot simpler than most people think. Let’s outline how you can buy ETH in 3 simple steps.
1. Create an account on Coinbase
Coinbase is an excellent cryptocurrency exchange for beginners since it is not only secure and legitimate, but it is also very intuitive.
So the first step to buy some Ethereum is to create an account on Coinbase, this just takes a few minutes and the exchange will initially only ask you for your name and email.
After you click on the verification email to confirm your email address, you have the option to complete a basic identity verification where you submit your ID or Passport.
You may only have to do this if you are planning to buy a large amount of Ethereum.
Note: This is practice is common in cryptocurrency exchanges and Coinbase needs to do so to stay compliant.
2. Deposit some USD/EUR/GBP on Coinbase
In step 2, it’s now time to deposit your fiat currency of choice that you will use to buy Ethereum. At the time of writing, Coinbase supports USD, EUR, and GBP.
This, again, is also very straightforward and only requires you to input your bank name, your own name, and the amount in USD/EUR/GBP that you will deposit.
Then just click “continue” and you will be brought to a page that gives you the bank account details of Coinbase where you have to send your funds.
Easy peasy right?
Buy some Ethereum in just 1 click
The final step is the easiest and quickest of all.
After your funds arrived, which depending on your bank may take up to 2-3 days, you are now ready to buy ETH.
To do so you simply need to click on the “Buy/Sell” tab, and then you are brought to the following page:
On this page, all you have to do is select Ethereum (in the image above I already selected it), and then type in below the amount of USD/EUR/GBP worth of Ethereum that you want to buy.
Then you have to click “Buy Ethereum” and that’s it!
You are now a proud Ethereum owner and among the first people in the world to own some.
That being said, if you’re not a huge fan of Coinbase then make sure to check out this guide with the best Coinbase alternatives.
So, Is it worth it to invest in Ethereum?
Overall, whether or not you can consider it worthwhile to invest in Ethereum largely depends on your risk appetite. After all, Ethereum has demonstrated incredible returns in the past, but past performance isn’t always an indicator of future success.
Since the Ethereum mainnet launched in 2020, Ethereum has had its ups and downs—mainly ups. In this time, ether (ETH) has appreciated drastically compared to its
$0.30 ICO price, climbing to more than $1,420 at its peak, and has broken above $300 several times over the past years.
With that said, Ethereum has shown the potential to lose value rapidly and has seen its price action stagnate on several occasions. This shows that although the potential for significant profits exists, there is also a very real chance Ethereum could resuming losing value in the future.
Although ether is currently valued far below its all-time highest price, the Ethereum network has gone from strength to strength in recent years, with the number of Ethereum DApps increasing month after month , while new updates have made the network faster and more adaptable than ever before.
As such, Ethereum has demonstrated that it is becoming increasingly capable of serving its function as a distributed computing platform. However, with Ethereum potentially shifting to a new consensus mechanism in the near future (Proof-of-Stake), this could either improve its value proposition, or potentially damage it if things don’t go to plan.
Nonetheless, Ethereum is widely considered to be the heart of the growing decentralized finance (DeFi) industry, and as we touched on earlier, huge amounts of ether are being locked up in DeFi smart contracts, reducing the circulating supply.
Should both Ethereum DApps and DeFi continue to gain popularity, it isn’t difficult to see how both scarcity and demand would also increase in tow. If this happens, then ether will likely gain value too. As such, if you believe Ethereum adoption will only continue to grow, then there is no better time to invest than now.
Alexander has worked in community growth for multiple cryptocurrency companies. He is now the Sales and Operations Manager for CoinDiligent. In his free time, he writes articles sharing his industry insights. You can get in touch with Alexander on LinkedIn.
Ethereum Cryptocurrency: Everything A Beginner Needs To Know
CoinSutra » Ethereum » Ethereum Cryptocurrency: Everything A Beginner Needs To Know
In the cryptocurrency world, if Bitcoin is the king, then Ethereum is the queen.
The price of Ethereum (ETH) has risen significantly in the past few months, and it’s one of the most promising cryptocurrencies right now. In this article, I will help you understand everything about Ethereum & you would learn all the important things that you should know as a beginner. Before that,
Here’s a situation:
Consider you have just booked an Uber ride and a driverless car has come to pick you up.
That car takes you to the gasoline station and self-pays for its fuel with the money it earned from the previous ride. Afterward, this car takes you to your destination, and the trip fare is auto-deducted from your Uber wallet.
While driving you to your destination, the car also self-paid its annual insurance fee and its monthly liability fee on behalf of its (human) owner.
After it drops you off, it drives itself to a mechanic for some repairs.
You might be thinking I am telling you a scene from a Sci-Fi movie.
But to your surprise (and mine), I am not!!
Such things are being tested, and the use of cryptocurrencies like Ethererum and technology like the Ethereum blockchain are the reasons that something like this can happen.
Such autonomy is the direct effect of the theories behind cryptocurrencies.
So to be able to digest this futuristic scenario, let’s understand Ethereum.
What is Ethereum?
As the official Ethereum project website says:
But what’s special about that? All software runs as it was programmed to do so…
Well, the code written on the Ethereum blockchain can’t be altered, tempered, or hacked. This tamper-proof feature ensured by cryptography makes it an interesting application of the blockchain technology.
Ethereum is not just a blockchain; it’s a decentralized programmable blockchain-based software platform. In a way, you can say that its married to its cryptocurrency asset (called Ether – ETH) which runs the Ethereum network.
Ethereum allows you to build and execute smart contracts and Distributed Autonomous Applications (DApps), without censorship, downtime, or any third party.
The inbuilt programming language Solidity is used to write smart contracts and DApps. After that, the cryptocurrency asset (Ether) helps in executing these apps and contracts.
This is why Ethereum is also called programmable money.
A Russian programmer Vitalik Buterin created Ethereum in late 2020. Vitalik formally announced Ethereum in January 2020 at The North American Bitcoin Conference in Miami, USA.
Ethereum was created to do things which Bitcoin could not do.
The idea of Ethereum is simply not another cryptocurrency.
Rather it is an effort to code, run, and execute smart contracts and DApps independently without human interaction.
With the joining of Dr. Gavin Wood as co-founder, in July 2020 the Ethereum Foundation bootstrapped the development of Ethereum software and raised $18 million in presale of Ether tokens.
The Ethereum Team
Total number of Ether to be produced
Most people want to know how many Ethereum will be produced.
But it is not the Ethereum that will get produced or mined; it is Ether.
Ethereum is the network based on the blockchain technology and Ether is the cryptocurrency which helps in running the platform.
Ether (ETH) will be issued at a constant annual linear rate via the block mining process. This rate is 0.3 times the total annual amount of ETH created in the pre-sale.
60,102,216 Ether was created in the presale:
Approx 18 million Ether per year.
The Ethereum blockchain is kept secure by Ether, which is an incentive to miners.
The Ether supply is limited to 18 million per year. Every 12-14 seconds, a new Ethereum block is mined, and a reward of 5 Ether is given to the computer who mined it.
Ether can be mined through CPU and GPU Mining via mining blocks on the Ethereum blockchain.
Ethereum has currently $20 billion as its market cap.
This is 1/3 of the market cap of Bitcoin, yet it is still a worthy cryptocurrency having. As of now, the present value of one Ether (ETH) coin is $231 – this has increased more than ten times since the first of week of February 2020.
The question still remains whether or not Ethereum will be a popular platform powered by its ETH coins.
It will be interesting to see what the market cap does in the coming days.
Popular Ethereum Wallets
Here are dedicated articles for Ethereum Wallet: 10 Best Ethereum [ETH] Wallets To Use In 2020
Buy ETH from Exchanges
The ETH, ETC split, The DAO, and The Hack
The Decentralized Autonomous Organization (known as The DAO) was made on the Ethereum blockchain to act as a Venture Capital Firm-owned and operated by no one. It was supposed to work on the basis of smart contracts which were executed using DAO tokens.
It launched with $150 million in crowdfunding in June 2020.
Immediately after the launch, it got hacked.
DAO tokens worth US$60 million were drained out by hackers due to a faulty code of DAO.
Then soon after that, a Hard Fork was implemented on the Ethereum blockchain at Block 192000 to refund the loss of DAO token holders. The Hard Fork made the hacked transaction invalid, and a new version of the blockchain was formed.
Ethereum Classic’s blockchain is the same in every way with Ethereum’s until Block 192000, where the hard fork was applied.
Users who did not support the hard fork idea continued to mine on the old version of the blockchain without upgrading its version.
Since then, both communities have diverged based on the version of blockchains they are using. ETC (Ethereum Classic) is traded on an exchange platform and offers the same functionality of decentralized apps and smart contracts.
Ethereum Use-Cases: Bringing Science Fiction to Real Life
At the start of this article, we saw how exciting services like Uber could become if made decentralized on the Ethereum platform.
Similarly, there are a few such rapidly growing use-cases of Ethereum that are being developed.
Golem is the world’s first decentralized and open-sourced supercomputer developed on Ethereum that anyone can use.
This computational power is made available from the contribution of small personal laptops to giant data centers.
As a user of this platform, you can run a website, calculate a difficult computational problem, or run along code using additional computational resources.
You can even run miners using this computational resource and mine cryptocurrencies.
It opens the possibility of an economy which shares computing power wherever unused.
Through this, anyone can make money ‘renting’ personal computers.
Brass Golem, presented by Golem, is the first practical application which makes computer graphics computation a lot faster.
Slock.it (Blockchain + IoTs)
The Universal Sharing Network: Rent, sell or share anything.
66% of the world is willing to share their assets for financial gain.
Slock.it is developing a shared economy through its trademark products, which makes all underused things available for renting purposes.
It makes the interaction of physical objects such as apartments, vehicles, offices, etc. possible with smart products programmed on the Ethereum blockchain.
Let’s take something like Airbnb: Accommodations could become entirely automated using smart objects (such as smart lockers) which are programmable on Ethereum and would work with one click of a smartphone.
uPort is an open-source, user-friendly system to establish a global, unified, and sovereign identity system for people, businesses, organizations, devices, and bots.
Imagine a use-case where you are receiving your parcel from a DHL or FedEx drone which is built on an Ethereum smart contract.
It will hand over the package at your specified time and will verify your identity with the uPort’s blockchain.
What an incredible application that would be.
SingularDTV is the world’s first decentralized television series and royalty management platform.
In this system, entertainment rights and funds are distributed among the creators, writers, investors, crew, and actors without any fraud.
As this has no centralized party, the funds of any contributor cannot be confiscated. All get paid as the execution and delivery of funds are coded into the smart contracts, and most importantly, there are no third parties involved.
The ecosystem is based on the Ethereum blockchain, and users use crypto tokens (known as Singles) to drive the DTV ecosystem.
This is a microblogging service running on the Ethereum blockchain.
It is a microblogging site like Twitter (which also allows up to 160 characters), but it is entirely decentralized, running on the Ethereum blockchain.
Content is shared, created, and removed without any censorship as it simply runs off of the blockchain. Publishers can earn Ether if their content is upvoted.
Bitcoin vs. Ethereum
Bitcoin is a peer-to-peer electronic cash system.
Bitcoin is digital money. The Bitcoin blockchain only stores and handles all past transactions since the very start of its network.
This ensures easy accounting and transfer of value (i.e. money).
But the Ethereum blockchain, apart from handling accounts and transactions, also stores programming logic.
Here’s an example:
And these types of codes, once executed, are stored historically on the Ethereum blockchain forever. This helps to understand future decision-making processes.
Ethereum is different from Bitcoin mostly because with Ethereum, you can not only transfer money (i.e. Ether), you can execute smart contracts.
There are a lot of real-world scenarios where we trust third parties, middlemen, and escrow agents to enforce the transaction. In this way, they all earn their cut. With Ethereum, such parties will become useless as the technology matures. Some of these are Uber (which I explained during the introduction of this article), freelancing platforms like Upwork, Insurance Agents, Escrow agents, eBay, and Airbnb (to name a few).
If a replica of these above applications is made on the decentralized Ethereum platform, it will result in the following advantages and a positive disruption of each industry:
And while Ethereum is fundamentally different from Bitcoin, Ethereum and Bitcoin are not competitors. They coexist and solve different types of problems in the real world and both open up a possibility for a new future.
Future of Ethereum: More Than Money
The future of Ethereum is not only bright as a digital currency, but also as a platform to run smart contracts and DApps.
It is accelerating the migration from a centralized economy to a decentralized, borderless, and permissionless global economy.
Decentralized applications would positively disrupt and change industries such as finance, entertainment, real estate, academia, insurance, healthcare, the public sector, and social media.
Just as the inventors of the internet had no idea that in a couple of decades social media and cloud computing applications would emerge, we don’t have any clue what sort of applications will eventually emerge out of the Ethereum blockchain.
After the DAO hack, the future looks promising for Ethereum. In terms of volume, Ethereum has already become the most traded cryptocurrency of 2020.
Shortly, the prices of Ethereum will probably rise.
Until that time, stay connected and keep learning about the cryptocurrency revolution with CoinSutra.
Ethereum is constantly growing and innovating. Whatever I have shared with you is only the tip of the iceberg.
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A team of Blockchain and Cryptocurrency experts lead by Harsh Agrawal. Trusted by over 1.1 million readers worldwide.
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