Cryptocurrencies

Benefits and limitations of Ethereum (ETH)

Since the creation of Bitcoin in 2009, other cryptocurrencies have emerged. Individuals, financial institutions and even some states no longer hesitate to join in by offering their own cryptocurrency. In this batch, some have peculiarities that have allowed them to rise as leaders in the market. Among the latter, we find in second position Ether, a cryptocurrency associated with the Ethereum blockchain, a versatile blockchain. This currency is known for its blockchain which allows the creation of decentralized applications and smart contracts. But what does this mode of operation consist of? Is it a real revolution? Here we present our observations and our opinion on Ethereum (ETH).


How to define your investment strategy with Ethereum?

If you are planning to invest in the Ethereum platform, you need to have some basic information. So let’s take a look at the definition and operation of Ethereum.

What is Ethereum?

What exactly is Ethereum?

By analogy with your personal computer, we can define theEthereum like a free world computer on which any programmer can create and run a program, so it doesn’t belong to anyone. It is indeed a kind of decentralized network of computers interconnected via a blockchain). This blockchain has the particularity of allowing creation of decentralized applications and the execution of smart contracts. To better understand these two concepts, we invite you to read our definition of Dapps as well as our article on smart contracts.

Did you know ? Ethereum was the first platform to use smart contracts and decentralized applications.

What is the main goal of Ethereum?

Ethereum is the result of the research of a young programmer named Vitalik Buterin. After studying Bitcoin for a long time, he realized the limits of the latter. Bitcoin has only one goal: to allow the settlement of financial transactions online through a virtual currency system decentralized. The creator of Ethereum thus wanted to wear the scope good cryptocurrencies beyond. He then proposes in 2013 a blockchain platform with more features. Buterin thus introduced the notion of smart contract which allows any type of application to run automatically when certain conditions are met. This is what brought the Turing-Complete, a computer language that facilitates the development of such applications.

Ethereum's blockchain is the one that initiated the principle of smart contracts

In short, Ethereum’s main objective is to make a blockchain platform available to as many people as possible. creation and execution of smart contracts through decentralized applications. These features go far beyond simple online payment and cover many other areas such as insurance, the content storage, the entertainment, theart, etc. Ethereum thus makes it possible to remove intermediation and make transactions more secure with well-developed smart contracts, while making operations more transparent.

Did you know ? Pioneer in the development of decentralized applications, Ethereum dominated the DApps market in 2019. According to the Dapp Review, Ethereum continued to lead the DApp market with 2,146 DApps created.

How to invest in Ethereum?

The cryptocurrency generated by the Ethereum blockchain has been named Ether (ETH). After a tentative increase following its creation, the price of Ether skyrocketed in 2017. The currency is experiencing a real craze, making it the second cryptocurrency behind Bitcoin in terms of capitalization. There are several ways to earn ETH.

As developer, you have the possibility of being rewarded with ETH tokens in exchange for the application development decentralized for the Ethereum blockchain. Thus, several thousand decentralized applications allow their users to earn ETH. You can also use cryptocurrency as means of payment for services offered in the applications.

For a simple user who wants to invest in cryptocurrency, the simplest option is to buy and sell ETH in a dedicated market like Binance, eToro, etc. This online trading method remains very profitable if you master it. However, it presents risks that should not be underestimated. It is therefore important to take some basic precautions. This involves choosing the right platform to buy your Ethers.

Pub

Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Buying your Ethers on a platform is the easiest way to have them

What strategy to adopt when investing in Ethereum?

To get started, register on the trading platform of your choice. For this, it is important to have a electronic wallet for the storage and security of your Ethers. You can then fund your account and start trading.

Make your choice of wallet according to what you do with your Ethers

Since trading is a risky investment, it is important to know when to stop and only invest what you can afford to lose. But with the good strategy, you will be able to make profit. You just have to follow the course of Ether closely, buy when it drops and sell when he goes up.

You should also take into account that the value of the currency fluctuates constantly and demands thus to constantly update on the cryptocurrency.

What are the advantages and limitations of Ethereum?

Before giving you our review on Ethereum, it may be interesting to see the strengths and weaknesses of cryptocurrency.

The advantages of Ethereum

How can investing in Ethereum be beneficial?

The attractiveness of Ethereum is the result of the many advantages it offers:

  • The ability to create various types of decentralized applications. He is also the first to propose the decentralized applications and smart contracts. This extends blockchain technology to all parts of the economy.
  • The number one platform in terms of the number of applications available. More than 2000 applications available in all fields like finance, games, entertainment, art, etc.
  • Very remarkable position of the Aether. It is the second currency after the Bitcoin, which gives it good visibility on the market.
  • Recognized blockchain that has contributed to big projects as Axa or the Commonwealth Bank Of Australia.

The limits of Ethereum

Ethereum nevertheless has some disadvantages

Ethereum has its limits, of course: REWRITE

  • We deplore some security failures which hopefully will be fixed in future blockchain updates.
  • A few scalability issues which persist despite the efforts made to make the network more fluid.

Did you know ? The Ethereum platform faced an attack in 2016. This same attack led blockchain developers to make a major protocol change (hard fork) who gave birth to Ethereum Classic (ETC), a cryptocurrency independent of Ethereum (ETH). If you want to learn more about Ethereum Classic, click here.

What is our take on Ethereum?

Ethereum remains unquestionably one of the best blockchains at the time of writing. Although some projects aim to compete with it by also offering decentralized applications and a smart contract system, Ethereum is for the moment far too anchored in the memory of Internet users to be surpassed. Its electronic money, Ether, remains one of the most profitable for investment with a capitalization that places it second behind Bitcoin in the ranking of cryptocurrencies. While it is true that its execution speed remains low and causes some scalability issues, the next updates network should resolve a few of these issues.

Pub

Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Ethereum is a trusted network for all investors. Ether is still a good investment if you have the right strategy. Keep in mind the risks of investing, however, and don’t invest your limit any further.

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