What should an investor know before buying ether, the Ethereum cryptocurrency?

OroyFinanzas.com) - The increasing relevance of blockchain technology seems, at this point, unquestionable. Bitcoin has been the investment that has attracted the most interest in this area. But the blockchain technology of Ethereum is arousing great interest in recent months. With a successful active crowdfunding campaign until May 28, in which interested investors can get tokens DAOs, in exchange for Ether, and that has so far collected 143 million dollars denominated in Ether, it seems important that the possible Investors, understand beforehand some important issues about Ethereum, in order to assess the benefits and risks of adding Ether to your investment portfolios.

To understand what Ethereum is, we recommend the initial reading of our reference article. What is the blockchain technology of Ethereum ?.

In summary, Ethereum is a platform for decentralized applications created by Vitalik Buterin in 2014. The beta version of Ethereum was launched in July 2015. When we talk about Ethereum we refer to a protocol, a platform, a programming language and a cryptocurrency ( Ether) born with the aim of allowing the creation of decentralized applications that run on blockchain technology to achieve a decentralized global computer: that is, a network of programmable computers around the world that anyone can upload and run programs under strong shared consensus rules. This is possible thanks to smart contracts and since the Ethereum programming language is "complete Turing", it means that it is completely apt to program whatever you want. All this works with a cryptocurrency, or token, which has the function of being the gasoline network: ether. Unlike bitcoin, ethers have not been created to become a decentralized global digital currency, but to pay for the actions that are developed in the Ethereum network applications. Although from the point of view of OroyFinanzas.com that applies to Bitcoin also although it was created with a monetary intention we consider it a commodity.

How does the ether market work?
Currently the ether market is facilitated by many of the same exchanges and infrastructure created around the Bitcoin network. And currently, for example, Kraken and Bitfinex, two of the most important exchanges of the Bitcoin ecosystem, offer the possibility of buying and selling ethers to their users.

But the ether market is not the same as the Bitcoin market on many issues. The initial difference is found in its origins. In the Bitcoin network, the delivery speed is more consistent. Due to the non-modifiable rules in the software there will be only 21 million bitcoins, and the speed at which the new coins are produced is currently 25 BTC every ten minutes or so, although in a few months it will be 12.5 BTC. Currently there are 15.5 million bitcoins in circulation.

Ethereum, however, created a pre-sale of its tokens in 2014 in a crowdfunding campaign, with which it raised $ 18 million. The donations collected for this presale were the driving factor of the initial offer of 72 million ethers (ETH) and the ethers emission rate that exists later. In addition, the Ethereum protocol allows the creation of 5 ETH for each resolved block. In any case, the creation of new ethers is limited to 18 million more ETH each year until 2017, at which time it is estimated that a new consensus algorithm will be operational in the Ethereum network, and that, although it is still under development and the generation of new ether that is implicit is not known, it is expected that it will never exceed this annual amount and that it will even be much lower. Currently there are about 80 million ether.