With my previous review of VERGE, I enjoyed writing the article and researching about that coin. This time, I am choosing to discuss Ethereum, simply because it would be a good rundown. I know it could help someone in my Facebook group (Altcoin investing) to understand ETH better.
Ethereum’s website states that “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third party interference.” For clarity, think of Ethereum like a space shuttle launching platform, and smart contracts as the actual space shuttle. You might be wondering why I specifically chose space shuttles. That is because the cryptocurrency community is familiar with terms such as “mooning”, “HODL”, and “to the moon!”
In this example, we have a space shuttle launching platform (Ethereum), that no one owns (decentralized), but can use. In order to launch, you will need a space shuttle (smart contract). If you have a space shuttle (smart contract), then you can use the platform (Ethereum) to launch your shuttle (smart contract).
Let us start connecting the dots: if you decide to create a project that needs crowdfunding (raise money), by using Ethereum (the platform) you could create a smart contract (shuttle) that allows people, who believe in the project that you are building, to invest in your project by sending you Ethereum. In return, they will receive your projects token in the hopes of your project getting on the market. For example, you invest in my company by giving me 1 ETHEREUM, and in return I will give you 10,000 stocks (tokens) of my company. Once my company goes on the market (such as bittrex or binance), if one piece of my company (token) is trading for $1.00, then the 10,000 tokens of my company that you hold will now be equivalent to $10,000. This process is called an Initial Coin Offering (ICO).
This is a simple use-case of what Ethereum can be used for, as well as the smart contract. In relevance to the platform and space shuttle, the space shuttle is the project and the investors are the passengers getting into the shuttle. The shuttle launches on the Ethereum platform and has the potential of reaching “the moon”. If the shuttle experiences heavy turbulence on the way to the moon, it is encouraged to HOLD ON tightly (HODL). HODL is short for HOLD ON FOR DEAR LAMBO. The context behind HODL is to HOLD.
To summarize Ethereum, it is a decentralized platform that allows the use of smart contracts ( a piece of code that allows instantaneous action based on what you tell it to do once the criteria’s that you set are met). Once someone fully understands what you can do with a smart contract and the endless possibilities that are available, you can be sure to see why Ethereum will be around for decades to come.
The question then comes, is Ethereum a wise investment? Looking at Coinmarketcaps historical snap shots of ETH, it is an absolute must to have it as a long term investment in your portfolio:
January 3, 2016:
Price - $0.95
Market Cap - $72.41M
Source - https://coinmarketcap.com/historical/20160103/
January 1, 2017:
Price - $8.26
Market Cap - $722.83M
January 7, 2018:
Price - $1, 097.62
Market Cap - $106.28B
Disclaimer: The opinions presented here are of the Author’s. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. CoinScenario.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.