Ethereum is not a cryptocurrency, and that is one of the earnest reasons to invest in it. Does it sound silly to you? In order to set things straight, let’s define what Ethereum is, the future of it and gather all the facts that will help you decide whether it is better to invest in Ethereum or not. First of all, let’s draw a short analogy with the King of cryptocurrency — Bitcoin.
The distinction between Bitcoin and Ethereum
Initially, Bitcoin was considered as a peer-to-peer network for providing transactions without relying on any third party. With the appearance of other suchlike ‘networks,’ the whole concept was called cryptocurrency. Today, Bitcoin is the pioneer of cryptocurrency and the foremost among thousands of Altcoins. Ethereum is just behind Bitcoin according to both popularity and market capitalization, whereas it’s not cryptocurrency, by fact. What’s that then?
Ethereum is a decentralized network that runs programs, which are called smart contracts while Ether is a cryptocurrency token spread within the network of Ethereum. So, when you put orders with ETH/USD, ETH/EUR, ETH/GBP, or other pairs — you actually buy/sell Ether tokens, not Ethereum.
What are smart contracts?
A smart contract is an automated set of instructions executed on the blockchain of Ethereum. You can think of it as a cloud-based program, but it’s important to remember that it’s all on Ethereum. Basically, a common cloud-based program is located on some physical servers, which means in one place. In contrast, smart contract program is ALLOCATED… on the blockchain of Ethereum, which is the main advantage of it. It cannot be broken, hacked or have its servers non-operational due to any reason.
Ethereum is beating Bitcoin
It’s not just a catchy phrase aiming to strike your eyes. It’s a real fact that for many traders and investors is the number one reason to invest in Ethereum.
Over the last year, Bitcoin has risen by 2000%, Ethereum — 10000%
2017 was a great year. The skyrocketing results of the most popular cryptocurrencies have attracted an astonishing amount of attention to the sphere. Just imagine, Bitcoin was about $800 and now it is well over $16,000. This amazing fact has engaged a great number of newcomers in Bitcoin investing. Meanwhile, Ether, not so popular, took the cake surpassing Bitcoin by means of the growth rate. The price of one Ether token was about $7 a year ago, and now it’s somewhere between $700 and $750. Eventually, it has outplayed Bitcoin fivefold.
Ethereum processes the largest amount of transactions
You will be surprised to know that it’s not Bitcoin network where most of cryptocurrency transactions occur. According to the latest statistics, Ethereum is liable for more than 50% of transactions made by cryptocurrency enthusiasts, while Bitcoin holds a quarter. The thing is that Ethereum is a more flexible instrument for providing transactions, rather than Bitcoin. Let’s make a short and plain performance comparison and you’ll see it for yourself:
- Transactions per second. Bitcoin: 3-7; Ethereum: 20.
- Median transaction fee at its latest highs. Bitcoin: $16; Ethereum: $0.6. NOTE: Although the difference is howling, it is important to know that Bitcoin’s average transaction value is far greater than that of Ethereum. So, it partly explains such a vast gap between the fees of the two leading cryptocurrencies.
Why Ethereum has a great future?
Now, that we’ve compared some statistical data, we can move to a more of a holistic concern — the future of Ethereum and why it is expected to be colossal. Let’s work it in a roundabout approach:
- Decentralization is the concept;
- Blockchain is a revolutionary decentralized technology;
- Ethereum is the leading platform that specializes in blockchain-based programs.
No panic, you’ll get it in a minute!
Blockchain technology is the future of software development
Blockchain is a brand-new technology that has opened decentralization to the world. It’s not just some database modification, or a new ‘money-service’ system. Blockchain provides the solution for companies, services or any business operators to have their working processes be as much self-sustainable as never before. It is a technology that can and will be implemented in all spheres: banking, medical, financial and any other.
As to the software development part, programmers are just at the very beginning of exploring the technology in its full scale. Once Blockchain emerged, it has drawn so much attention in a short lapse of time that it has already become a trend; however, it is not yet ready to be used to its full extent. This is a fair shot for the people who wish to invest in Blockchain today, at the very inception of its evolvement.
The role of Ethereum in the blockchain revolution
Only facts remember? And so, for today and, as experts predict, for a perceivable future, Ethereum is and will be the ultimate blockchain tool and investment. So, its intention is much broader than just being a cryptocurrency network. Ethereum is the network that provides the basis for blockchain-based applications while Ether is the internal token that serves as a fuel for the network. For that reason, buying ETH token, you not only invest in the cryptocurrency of Ether, but into Ethereum — the network that runs thousands of decentralized applications. As globally as it is, Ethereum is the leading platform of such kind, so money invested in it is basically the money that aims for the development of the Blockchain sphere itself.
As it was said at the very beginning of the article, Ethereum is not a cryptocurrency, and it is the reason to invest in it. Now you get the message.