Chances are you’ve heard of Ethereum, which many deem as the next bitcoin, and the next big thing in the cryptocurrency space. Is it real or just another boom set for bust. Let’s look at it in more details, all while comparing it to bitcoin. Let’s roll…
1. Better blockchain
Compared to the bitcoin blockchain, the one “running” Ethereum has more capabilities. Instead of being used only for transferring financial value from one place to the other, Ethereum has a more-general platform to write and execute contracts, money transfers included. This in turn could potentially make Ethereum well-suited for other applications in the future.
2. More money
The Ethereum blockchain is set in such a manner to release the same amount of ether each successive year; in contrast, the bitcoin blockchain halves the quantity of bitcoins released into the network on a four year succession basis. This in turn makes sure bitcoin is worth more in the long run due to the scarcity factor. However, the fact that at some point there will be more ether could make it better suited for everyday transactions, thus again increasing its value.
3. Different technology
Mining for ether and bitcoin uses different technology, with Ethereum taking about 14 seconds to confirm transactions; in contrast, it takes about 10 minutes for bitcoin transactions to be confirmed. Also, the Ethereum reward system is designed to promote individual miners to collectively mine as individual entities, rewarding stale work along the way. In contrast, the Bitcoin network only rewards proof of work and promotes pool mining to encompass computational speed from the whole pool collectively. It takes more computational power to mine bitcoins than ether.
4. Volatility
All cryptocurrencies tend to change prices a lot, and ether is not an exception. Bitcoin has been on the market for the longest period of time and can thus better “respond” to the ever changing world. For the time being, we expect ether to be more volatile than bitcoin, presenting a good opportunity for both speculators as well as investors who could grab it while it’s down.
5. Ethereum growth
It was in the mid-May 2017 when ether was worth around $88; as of July 4th — it’s worth north of $250. During that time, mining and servers processing Ethereum transactions were firing at all cylinders, consuming more electricity than the country of Cyprus (as of the end of June). It is hard to tell where Ethereum will go from here, but it is definitely emerging as a serious second “player” in the cryptocurrency market, with bitcoin continuing to lead the way in the foreseeable future.
Is Ethereum here to stay?
I would say YES, because of its sheer utility and market capitalization. Like any investment, this one too comes with a risk, and we must add that this article shouldn’t be considered as an investment advice, and we expressly disclaim any liability, including in respect of direct, indirect or consequential loss or damage.
That being said, you should know that Ethereum will continue to promise disproportionate rewards which always come with extraordinary risk. That’s just life. But with people fighting their way to enter the cryptocurrency market out of fear of missing out (and other factors), the demand will remain solid, further helping ether and some other cryptocurrencies increase their value.
In order to get started with Ethereum — i.e. buy some ether — you should go to the trusted places, those that have been around for a few years… Good luck!