Ethereum has been one of the trendiest digital currencies to have in one’s investment portfolio over the last couple of years because it’s an interesting project with several utilities that promise to deliver increased profit.
However, the crypto market is widely known for being unstable and volatile, so not even a popular asset like Ethereum could be considered a reliable investment. Data shows that Ethereum is trending among the digital currencies people purchase when they first join the crypto sector.
But if you want to invest in ETH, you must check the current ethereum price usd and familiarize yourself with it and the market to understand how the blockchain changes as technology evolves.
This article is dedicated to determining whether Ethereum is a good investment. It takes extensive research to conclude, but we’ll try to figure it out.
How Ethereum Was Introduced On The Market
Ethereum was created by Vitalik Buterin, a Canadian developer, in 2013 and was introduced on the market two years later after raising funds to power the project. After the hackers stole $50 million from DAO, a well-known decentralized autonomous organization, Buterin decided to take measures and directly change the blockchain to prevent cybercrime. After his intervention, the old chain was known under the name Ethereum Classic (ETC), and the new one was Ethereum (ETH).
Ethereum Has Several Use Cases
Aside from Bitcoin, Ethereum is the largest blockchain in the sector, so its popularity is motivated. It boasts a high degree of decentralization, which could only make it look more reliable for investors because no one can control the network, alter the project in any way or turn off the blockchain.
Ethereum has numerous use cases, but let’s focus on the most popular ones.
Ethereum and DeFi—DeFi is an alternative to the traditional finance system because it’s available globally and highly decentralized. The majority of DeFi projects reside on the Ethereum blockchain, which has become the main option for developers searching for a platform to host their decentralized protocols or services.
Ethereum and non-fungible tokens – Ethereum is also a promising platform for the development of NFTs, which have been in continuous growth since 2020 when they have started to gain ground. Non-fungible tokens have evolved from the abstract JPG images they once were to becoming full-fledged decentralized software stored in a wallet.
Crypto enthusiasts believe that non-fungible tokens are vital for the global acceptance of asset tokenization and have a positive impact on Ethereum’s value. NFTs are widely used nowadays, and the gaming sector makes great use of them to improve users’ experience.
Ethereum and payments – Ethereum has become a leading actor in the social trading scene and directly competes with Bitcoin because the majority of online providers accept it as a means of payment. Its decentralization, network reliability, availability on cryptocurrency exchanges, and support for hot wallets have made it easier for organizations to recognize its value in payment processing.
How Can You Make Money With Ethereum?
You can use different tools and strategies to earn money from Ethereum.
You can mine Ethereum – Ether is produced through the mining process, which requires miners to solve computational problems and confirm new blocks for the network. Ethereum maintains its decentralization when miners add blocks to the network constantly, and mining is considered the backbone of the blockchain because it makes the creation of new coins possible. The process of mining usually requires the use of a high amount of energy, but Ethereum switched to the proof-of-stake algorithm, which allowed it to drop its use of energy to a minimum.
You can trade Ethereum – Trading crypto is a popular method to make a profit because it implies purchasing ETH at a low price and selling it when the value increases. Trading digital currencies is similar to trading traditional assets like stocks or shares. The process doesn’t require much; you open an account on a crypto exchange, purchase ETH with fiat money, and convert it to traditional currencies or other digital currencies when its price spikes. Ethereum is quite volatile, so trading is an exceptional strategy to make money as long as you have knowledge of the market. You can opt for a short or long-term approach depending on your availability and desire for profit.
You can stake Ethereum – Staking Ethereum has also gained ground as a method of making a profit from investing in crypto. The process implies depositing your ETH as collateral in the network to support its transactions and operations. You can choose between staking ETH via a mining pool or on your own. The network will reward you with ETH tokens for your contribution because you are actively securing the blockchain. Ethereum transactions are completed only after they are recorded on the network. The proof-of-stake algorithm plays an important role in the process because it verifies the transactions. If you become a validator, you will process transactions, store data, and add new blocks to the network. However, according to the new algorithm, you must own Ether because you must use it as collateral.
You can use the HODL strategy – The HODLing practice is also widely used because it allows you to keep the assets in your wallet for a longer time and wait until you find it suitable to sell them. The term originates from a misspelled forum post in 2013, where someone shared how they hold their Bitcoin despite the market fluctuations.
This strategy is meant to provide you with a profit in the long run and prevent you from selling due to FOMO. You must trust that Ethereum’s value will increase in time and you will make a return on your investment. This is the most popular long-term approach because it only requires you to keep an eye on the market after adding Ethereum to your wallet.
What’s More To Say?
Ethereum sits at the forefront of decentralized technology, and it makes a great investment for investors looking for tools to diversify their portfolios and dedicate their time to exploring strategies that could turn lucrative for them.
