Should We Invest In Ethereum?
Which cryptocurrencies will be Google, Facebook, Apple, Amazon and Nasdaq of the crypto world? Because of the depth and complexity of the crypto world, it is not easy to answer this question. In addition to the investment objective, I am looking for the answer to this question to get to know the blockchain universe and satisfy my intellectual curiosity. To answer such a question, it would be the best way to study the significant cryptocurrencies one by one.
I tried to evaluate Bitcoin comprehensively in my previous post. You can reach the post containing my reviews on Bitcoin from here.
I would like to analyse Ethereum, the second most valuable cryptocurrency in my article today. Ether is the name of the crypto money of the Ethereum ecosystem. However, since crypto is listed as "Ethereum" in the exchanges, I used the name "Ethereum" in order not to create confusion.
Ethereum is an open-source, blockchain-based operating system designed to create smart contracts.
Ethereum was introduced by cryptocurrency researcher and programmer Vitalik Buterin at the end of 2013. The system was launched on 30 July 2015 with the sale of 11.5 million coins.
As a result of security problems in 2016, Ethereum blockchain was divided into two. The original Ethereum blockchain is called Ethereum Classic. Ethereum is still the 2nd most valuable crypto and Ethereum Classic is the 18th most valuable crypto.
It is an interesting choice to give the name of ether, a volatile gas for a Crypto money, on a monetary issue where trust is essential. Buterin said that he chose this name because the environment in which light is moving is called as "ether" and because it sounds pleasant.
In March 2017, the Enterprise Ethereum Alliance (EEA) was established with the participation of various blockchain startups, research groups and companies. By July 2017, the Union had more than 150 members.
There are 100,88 million Ethereum coins in the market. Ethereum's total market value as of today is $ 46.42 billion. This represents 16% of the total cryptocurrency volume, which is 288.4 billion dollars.
Comparison of Bitcoin
- 240.393 transactions were made with Bitcoin in the last 24 hours, 80.751 transactions were made in Ethereum.
- Average transaction amounts with Bitcoin are approximately 100 times higher than Ethereum.
- A block is created every 8 minutes in Bitcoin, and a block is created every 15 seconds in Ethereum.
- Transaction fees are determined according to the amount of calculation required by the transaction, bandwidth usage and storage requirements in Ethereum, and Bitcoin transactions are determined according to the transaction size in bytes.
If we consider the blockchain as a new Internet, Bitcoin and the other cryptocurrencies with the purpose of money transfer can be compared with e-mail. Ethereum is a platform to develop features for different purposes on the blockchain. Developing applications on a blockchain without Ethereum-like platforms requires intense coding, cryptography knowledge. Thanks Ethereum, from electronic voting to digitally recorded intellectual property, from legal obligations to trading transactions, many applications are implemented.
Besides being a subject of trade, such as other cryptos, Ethereum is used to pay the fees for transactions made by application developers on the Ethereum network.
What Is A Smart Contract?
Smart contract is an expression used to describe the computer code that facilitates the exchange of money, content, property, shares, or other valuable assets. A smart contract running on a blockchain is a self-running computer program that automatically runs when certain conditions are met. Because smart contracts operate on the blockchain, they can work without the possibility of censorship, interruption, fraud or third-party intervention.
Ethereum allows developers to create the set of operations they want, instead of giving them a limited set of operations. This means that developers can develop thousands of new applications on the Ethereum blockchain that have not been thought of before. Vitalik Buterin said Etherium is a kind of Swiss knife that developers can use for different purposes.
Investing In Ethereum?
Could Ethereum be Google, Facebook, Apple of crypto World? I don't know the world of crypto well enough to answer this question, but my research shows that it is one of the most serious candidates. Someone can argue that it already has been.
Being the first in the world of technology does not always provide lasting success. Google was not the first search engine; Facebook was not the first social media platform, Apple was not the first company to produce personal computers. Followers have the advantage of learning from the difficulties experienced by the early developers of technology.
The following table shows the development of Ethereum prices over the years compared to Bitcoin.
Other than the first year of release, we see that Ethereum is always performing better than Bitcoin. Time will show if this relative performance advantage will continue.
Is the current Ethereum price eligible to invest? To answer this question, I demonstrated daily prices on a chart from 7 August 2015, the day Ethereum was traded first, to yesterday, and I added a trend line to the chart on the Excel.
The average of the value over time can give us an idea of the "real" value of an asset. In this context, when I examine the chart and the trend line I created on it, I have predicted that the "expected" price of Ethereum is for yesterday was USD 608 and "expected" price for the year-end is USD 726. The R-square value, which shows the explanatory of the linear trend line, is 0.6223, indicating that we have to be cautious about these price forecasts.
When we try to explain the same set of data with a polynomial equation, we get a better R-square value, such as 0.72. According to the formula, the "expected" price of Ethereum today is 855 USD and the expected price for the end of the year is 1197 USD.
Conclusion
When the statistics on the site http://etherscan.io/charts are examined, it is seen that things are going well on Ethereum.
I can't say that Ethereum is the "best" crypto to invest in, but it seems to be a good investment alternative.
Despite a relatively low R-square, I find the prices shown by the linear trend in the graphs above more reasonable. Because the more complex the model is, the more likely it is to reveal the past data, over-fitting is a trap. As I mentioned above, we need to be very cautious about these predictions, as the crypto market is very volatile. Like most other cryptocurrencies, Ethereum seems attractive concerning investment at the current price.
I'm neither an investment nor a crypto expert, so the information I share here should not be considered as investment advice.
If you like this article, you may also be interested in the following article.
15 Tips for Successful Long Term Investing
Thanks for reading.
Sources:
https://giphy.com/
https://pixabay.com/
https://en.wikipedia.org/
https://coinmarketcap.com
https://coinranking.com/
go for adbank and steem dear friends and wanchain
If you use erc20 tokens you need Ethereum for the transaction payments.
Just my opinion that eth because of its smart contract has made it second to only bitcoin. Yet the crypto space is ever evolving. So if eth doesn't continue with its upgrades and follow through it's roadmap then it may stall and fall in price. We can see that in neo.
I leave it where I am a fan of eth. Rooting for it to continue rise. Thanks.
yea what is really going on with NEO? they've really stalled out
I like neo because it has the potential to be like eth. The issues I am guessing is because china has stopped ico and the Chinese government not supporting crypto as other financial investments.
I believe neo right now is being pushed down so big institutions can buy them. Neo has the potential to exceed eth due to limited supply and when Chinese government shows greater support toward crypto neo will moon. Note I said when and not if the Chinese government will accept it. Reason is there is no reason crypto should be banned as it has more benefits than fiat.
If we will compare both btc at eth, eth demand and transactions were higher compared to btc and this somehow gives us a hint that many were using eth than btc. Either used by companies, businesses or those individuals like us who invest or trade in eth or simply were using eth to buy other altcoins. For us to side in the win-win situation, better to have both since this 2 coins have identical volatility (its rise and fall in the market)
@elizahfhaye can you predict about bitcoin price for this year?
As the "expert's" said, btc will spike before 2018 ends and also John McAfee predicts in his twitter account that there will be a bull market soon - and a day after that the btc spike from 6.5K+ to 7.5k+ and then now it already reaches 8k+. I hope this will continue throughout the year, hopefuly...
Completely agree dear with you.
Nobody can predict the price, Just buy low and wait with stop loss order in place so you loose only that which you can afford to loose, and keep trailing your stoploss. Keep up with the news , and other social media, buy when there is FEAR and sell when there is GREED in the market.
lol that voting meme thing is the best lol!!!!! haha it awesome!!
Really great info! For some more short term info on market directionality, check out our daily predictions: https://www.predictcrypto.net/predictions/
maybe, you should have done some research about "Ethereum". It is not called "Etherium".
You didn't miss the chance of making fun. I fixed it.
sadly the permalink still has the typo -- good catch
I rather invest in EOS.
ETH and NEO!!
Even though Ethereum is a good platform, until they don't resolve the scalability issue it won't go mainstream. Moreover, the fact you need to pay for every transaction on the network is a pain in the ass for many users, although there's a proposal to let the smart contract pay for user's fees, which is the way to go in my opinion.
As other mentioned, EOS is the one to look at. It has been designed from scratch to scale, it doesn't have transaction fees and it is damn fast (0.5 sec/block). Block.one is currently working on an iOS app (Android coming later hopefully :D) that you can use to securely hold your keys in your device and moreover, to be able to actually use EOS tokens. No more that bullshit of storing tokens and digging them on the ground but actually using them! In my opinion is the project that seems more likely to take blockchain mainstream to this date. EOS.io is designed in such way that it will allow dapps such as Steemit to run on it. User-friendly usernames like on steemit and more, it's really rich in features!
Cardano looks very promising as well, let's see!
Nice analysis. I think it's important to keep in mind how young this industry is. Ten years from now there will be thousands of new tokens used to incentivize participation in myriad social networks. My own sense is that Ethereum will remain an important utility platform and Bitcoin will be the primary store of value for the crypto ecosystem so both are safe bets.
Hash power security, decentralization and adoption are important first mover advantages that will keep both Bitcoin and Ethereum at the center of the ecosystem. Incredible to be part of this transformative industry.
It may just be me, but I don't much like Ethereum. It doesn't scale, Vitalik is too proud to use DPOS, and he has not proven that he will succeed in his Proof of Stake algorithm.
All the while, EOS, Cardano and NEO threaten to overtake Ethereum, and as a Dan Larimer fan, I wouldn't bet against EOS.
Noone really knows which smart contract platform will ultimately sit on the iron throne, so it seems to me, the lower market cap alternatives have greater growth prospects.
Just an opinion. :)
Hi @rodneysreviews
I really like your opinions & perspective about the blogs posted here...
really hope Cardano can reach Ethereum levels tbh ... that would be a lovely day!!