I wondered: should I buy Ethereum?
Is Ethereum a good investment? I had many questions the first time I heard of Ethereum. So I decided to create this post to help new people entering into the cryptocurrency space.
This is not financial advice
I remember exactly when I first heard of Ethereum.
It was at a birthday party of a friends house. This was at the beginning of 2017. I think it was march or April.
He was talking about the innovations that Ethereum had done. So when I got home I started researching a lot more about Ethereum. I was wondering whether or not it would be a good investment to buy some Ethereum.
The day afterwards I pulled the trigger and bought a few Ethereum. The price was pretty low then somewhere between 100 and 150 $ a piece.
The price is back at 150 $… luckily I decided to buy a 49 inch wide screen curved monitor in january when ethereum was at 900$. But that is for another story.
Even though a few years have passed. I have learnt a lot about the whole cryptocurrency space.
That is why, in this article I will cover:
- why I believe Ethereum is a valuable investment
- whether or not Ethereum is worth buying
- when is the best time to buy Ethereum
- whether you should invest in Ethereum now or if it is already too late to jump in.
Please remember this is not financial advice, i’m not responsible if you decide to put your entire life savings into this and end up living under a bridge.
Alright let’s get started.
A Super Short Introduction to Ethereum: What is Ethereum?
Ethereum can be compared to a computer that doesn’t need human interaction.
Basically a smart computer. These computers can communicate with other computers, send data and transactions by using smart contracts.
A smart contract is a computer protocol that allows to digitally verify, or enforce a transaction or transmission of data. I made a video on smart contracts here.
The reason they are called smart contracts, is because they do not need another person, a third party, to make sure that the contract is enforced.
The biggest problem with normal contracts is when one party decides they do not want to respect the contract, they need to hire a lawyer or a third party to make sure that the contract gets enforced.
This is not necessary with smart contracts as everything needed is programmed into the code.
Since these smart contracts are then deployed on the blockchain technology, they are trackable and immutable.
This opens up a new era of computer programming, digital ownership, and a new form of currency. All thanks to the smart contract capabilities of the Ethereum blockchain.
As you might see already, Ethereum is shaping the future of many industries.
Let me give you an example of a possible smart contract use case:
I believe that a travel insurance is a good example.
Let’s say 100 people decide to book the same flight from Zurich to New york. All the ticket prices are the same. Each person pays a small additional amount as a form of insurance to a predefined smart contract.
This might be 2% of the cost of the flight.
Now you have a pot of money that can be used to reimburse those people who have missed their flight for whatever reason. If no one misses their flight, you could program the smart contract to give the fee back automatically.
As you can see with this example.
A smart contract can replace an insurance company.
Very often insurance companies are stubborn when it comes to paying customers back for missed flights and so on. That is why a contract that cannot be changed for whatever reason is a better solution than a third party making these decisions for you.
This is only one example, but hopefully you see the potential of smart contracts and you can see how they can easily be applied to other fields.
Let’s continue with figuring out if Ethereum is a good investment. Here are 7 Reasons why Ethereum is a good investment.