Investing in the right cryptocurrency is what you should always keep in mind whenever you decide to start a journey in the crypto world. You should also be aware of the associated risks of the certain crypto you decide to go with.
One of the common risks that cryptocurrencies share is their high volatility.
To those new to trading with and investing in crypto, one of the top-performing cryptocurrencies in the market today is Ethereum. There are many reasons why many investors opt to invest in Ethereum instead of other crypto’s. So, in this article, we will show some of the benefits you could squeeze out of Ethereum, as well as the associated risks.
You might be confused once you find out that Ethereum and Ether – the cryptocurrency isn’t the same thing despite their frequent interchanging use. To clearly distinguish the difference, Ethereum is a network for computers that runs different applications, and Ether is the cryptocurrency that is used as a sort of “fuel” for the applications. Since both are associated with cryptocurrency, both are decentralised.
Here’s the thing about Ethereum and Ether, the entire blockchain built similar to what Bitcoin offers is programmable. So what does that mean? Well, since Ether is programmable, you can use it for other digital assets to secure yourself even more crypto altcoins, maybe even Bitcoin.
Using Ethereum as an application developing software, it’s often used to create other apps of the same kind – something that’s always related to cryptocurrency. This is all possible with the help of smart contracts, which is a program that just runs on its own on the Ethereum blockchain. Smart contracts can perform the tasks that would generally require the third party to perform, so it’s less work and more saving up for the developers.
What Makes It Interesting?
Well, unlike what you see Bitcoin does – you know, the whole digital gold thing, Ethereum gives digital money and incentives for the miners to work quicker on the blockchain. This means that it’s essentially a virtual machine that is powered by blockchains.
This gives the user more than just one option of interacting with Ethereum – not only are they dealing and exchanging with the ether cryptocurrency, they can also contribute to the development of the software and applications that Ethereum has to offer. However, those are mainly targeted at the developers.
What Are The Uses Of Ethereum
You’re probably already up to speed about how Ethereum is a form of decentralised and utterly digital currency, meaning everyone who has access to the internet also has access to Ethereum and the currency that it has to offer.
Since Ethereum also has decentralised software that developers can use, they have these things called smart contracts, allowing developers and creators to build decentralised applications that would then have their unique purpose. For example, some can be financial tools to aid you in securing more cryptocurrency, while others can be data services.
Another exciting thing that Ethereum has to offer is that they have several categories of dapps that could even be used to barter some digital goods for more cryptocurrency. For example, you can use these applications to sell different items like digital artworks, indie games, or even tools for developing different applications in exchange for crypto coins. You could even play the games to earn small amounts of it.
It’s great to know more about a particular type of cryptocurrency in a little bit more detail before you go ahead and spend it, right? Knowing a little bit more about what you’re investing in makes it feel so much more worth it since it’s something that you’ve dug deep about, which adds just a little touch of reliability too.
One of the aspects that could help you decide which cryptocurrency to invest in is by looking at its purpose. Since there are already tons of cryptos you can invest in the market, all of them serve a different purpose. If you carefully analyse the cryptos, you will be able to choose which one works best for you.